Supply chain issues are improving, but they are still a drain on ecommerce businesses, large and small. Unfortunately, customers aren’t always willing to wait around for products to get back in stock.
According to Shopify’s Future of Commerce report, “32% percent of customers abandoned their online shopping carts carts in 2021 if the estimated shipping time was too long. And 23% ditched their purchase when there was no guaranteed delivery date”.
You may not be able to do much about your supply chain, but you can get on top of your revenue with some adjustments. From selling more digital products to changing up your business model, here’s what to do next.
Focus on Selling Digital Products
Digital products are a mainstream option for retailers of all sizes. There are ways to switch things up to a more digital-friendly environment, from memberships to printables. Make sure it still pairs with your overall theme and the customer base you already serve.
If you sell activewear, consider a membership to specialized fitness videos and exercise plans—a meal plan site pairs well with healthy recipes and cookbooks for digital download. Or you can offer digital printables for daily planners when running a stationery business.
Look Into Print-On-Demand
Print-On-Demand (POD) alleviates the need to hold onto inventory and can reduce your overhead simultaneously. You won’t earn the same profit margin, but you also don’t need as much of a budget for storage or fulfillment. It’s also possible to scale faster and sell more, which could offset your costs.
Choose a reputable print-on-demand company that will apply your designs to a wide variety of products. Some companies have no minimum orders and will fulfill and ship out your product as if they’re an arm of your company. Large POD companies also have warehouses of inventory and large volume partnerships with suppliers, making it more likely they’ll have what you need when you need it.
Source Products Locally
Instead of relying on cross-country or global suppliers, focus on sourcing items locally. You’ll help out small businesses and have a better idea of supply chain gaps before they spiral. The goal is to create productive relationships with vendors who keep you updated on their own inventory and production.
Remember, supply chain issues aren’t just about a lack of inventory. It’s also about a lack of labor. Relying on suppliers who need to ship your products from the other side of the country is bound to create unpredictable delays.
Fold In More Evergreen Products
An online store needs to narrow its focus and specialize to compete in a saturated marketplace. But when it comes to supply chain issues, adding more diversity and evergreen products can boost your revenue without compromising the vibe of your online store.
The idea is to keep your signature style but focus on more evergreen best-sellers. For example, if you sell bespoke fashion, add some belts, jewelry, and accessories that are easy to source and sell again and again.
Drop shipping is an order fulfillment method where your business doesn’t need to keep products in stock. Instead, a buyer purchases a product sent to a wholesaler or manufacturer to fulfill the orders.
In the old days, drop shipping was a little clunky, and it was challenging to move along your orders to suppliers. Today, it’s usually an automated process. Drop shipping does come with smaller margins and changing inventory, but you can sell a wider variety of items and scale faster.
Incorporate Flash Sales and Impulse Buys
Supply chain issues are frustrating beyond waiting around and keeping customers happy. It also slows down your earnings and impacts your revenue potential and sales forecasting.
You can also get creative if you can’t get a handle on your inventory and supply chain issues. Curate and source items that align with your overall brand and that your audience will likely buy. Next, run more flash sales and impulse buys to keep your inventory moving and revenue high.
Market the sales to your audience as limited-time FOMO purchases they won’t see again soon. You’ll do more work listing new items to sell again and again, but you’ve also created an expectation to pounce and buy with your customers.
If you’re approaching a busy sales season, the time to prepare is yesterday. Although you don’t want to store excessive inventory and tie up your cash flow, you also need to anticipate shortages as your competitors flood your vendors with orders. Start by looking through your conversions and online traffic from the same time last year to get an idea of what to expect.
Of course, planning doesn’t need to include buying and storing any extra inventory. If it’s going to tank your cash flow, tread lightly. Instead, prepare by getting back-ups and solutions in place. Whether you want to sell more digital products or try POD, your new systems and processes should already work seamlessly when the busy season hits.
Combatting supply chain issues is also about keeping in touch with your customers and staying transparent. They may feel frustrated, but they live in a world with inventory and shipping delays. Keeping them updated offers more peace of mind, sets appropriate expectations, and reduces cancellations.
You don’t need to wait until a customer places an order. Keep your list updated from time to time about any significant inventory delays and turn it into a sense of urgency. “We have a few weekender totes left and won’t get new ones in stock for a few weeks. Buy now before they’re gone.”
There’s no way around it; supply chain issues are challenging. The good news is you do have control over how you respond to the problem, find creative solutions for your buyers, and give your store a reboot. Pick a few strategies and test them to see which works best for your business.
Once you control your supply chain strategy, it’s time to start optimizing your website and getting a handle on your SEO. Ready to take the next steps? Book a call with us!