The "Summer Slowdown" in ecommerce sales can present an opportunity to reassess your operations and think strategically about your business. If you can save a few bucks a week, save a few hours a month, and strengthen your long-term prospects, it will be worth the effort. Sharpen your pencils and get out the paper or spreadsheets, here's your homework assignment for August: Strategic Planning.
"Strategic planning determines where an organization is going over the next year or more, how it's going to get there and how it'll know if it got there or not." http://www.managementhelp.org/plan_dec/str_plan/str_plan.htm
Good strategic planning should center on questions of, What are my mission and values? Where do I want to be in 1 year, 3 years, and 5 years? How can I achieve those goals? What issues and challenges am I facing?
It's always a good idea to try to picture yourself and your business 5 years into the future. Don't try to be too "realistic," you should reach for the stars with your vision. "I'll be the number one seller in my category," or, "I'll have a lifestyle where I can have more time for my children" are both acceptable visions. Once you have your vision, you can determine the steps you need to take to reach your goals.
In addition to putting on your thinking cap, this is a good time to examine the nitty-gritty of your business operations. How can you better organize yourself? What products, services or tools can you invest in that will pay off in a reasonable period of time? Maybe you are currently paying for a service that you aren't using; if so, cancel it! Here are some articles with tips on getting organized: http://digbig.com/4bkwd, and here are some more ideas on saving time and money.
Examine Shipping Costs
One place to explore savings for most online-auction businesses is shipping. There are shipping solutions for every size business. Look at companies like Endicia, Stamps.com, WindowBooks and u-Pic for electronic postage and shipping tools http://www.auctionbytes.com/cab/abu/y203/m05/abu0095/s03. You may want to test various strategies for determining shipping charges. Some sellers use a flat-rate shipping charge, some use the eBay shipping calculator where you can add in a handling charge that is not revealed to the customer.
If you use a company like UPS or FedEx, and are doing any consistent level of shipping - particularly if you have a daily pick-up service, you should make an appointment with your account rep to see if she can save you money. (Did you know UPS and other companies may give special discounts for those who have served in the military?)
FedEx has a program called Tech Awards. If you do over $100/day in shipping with FedEx, and commit to doing a certain volume of business to FedEx for a year, you may be eligible for the program. If you qualify, FedEx will give you cash to spend at a participating Tech Awards vendor. I learned that Zoovy http://www.zoovy.com/fedex and HP are two participants in the program, so if you think you may be eligible and do enough volume, you could conceivably get thousands of dollars in Zoovy services or HP hardware courtesy of FedEx.
Perhaps UPS has a similar plan. The lesson here is to talk to your account rep at those companies with whom you do significant, consistent business. Those reps may be able to save you money through discounts, or tell you about programs you may qualify for but don't know about. And don't be afraid to use those negotiating skills! UPS doesn't want you to go to FedEx and vice versa, so speak up!
Compare Phone and Internet Services
Another area to save money is with telephone services and Internet Service Providers. You may be groaning, it can feel worse than eighth-grade algebra trying to compare the various plans, but you can save some serious cash if you get a good plan. AuctionBytes is a home-based business and we have a telephone plan through AT&T for local and long-distance. It's a flat-rate plan for all domestic calls, so I can pick up the phone and talk for hours, and won't get charged an extra dime! And the rates to Canada and UK are outstanding.
Time-savings can also add up to dollars, even if indirectly. If you don't have a high-speed connection to the Internet, what are you waiting for? Maybe it's time to get an additional computer if you currently share yours. Investing in new equipment, like a faster computer, can be a good investment and is tax-deductible for anyone who files a Schedule C (ask your accountant about a Section 179 deduction). And if you have multiple computers, you can network them (try a wireless router, terrific if you have a laptop because you can use it anywhere in the house or office).
A Third Hand
Has your business grown to a point where you require some help? If you can hire someone part-time to take photos, list auctions and answer emails, and use those extra hours you have freed up to find better deals on inventory and market your business, it may be a worthwhile investment.
Even if you have cheap labor (like your children), it's worth investigating listing tools and order-management systems. AuctionBytes has a chart of services, from AuctionSubmit and eBay's Turbo Lister (both free) on up to sophisticated (and high-priced) multi-channel marketplace management systems: http://www.auctionbytes.com/cab/pages/ams. This article by Andy Geldman can help you figure out how to evaluate eBay selling tools: http://www.auctionbytes.com/cab/abu/y204/m05/abu0119/s02.
August is almost here, devote the month to organizing yourself and your business. Review your bills and see if there are places to save, and investigate tools that may help save you time and money. And make sure you know where your business is headed.
Class dismissed.
