This year eCommerce companies are thriving. I am in the marketing industry and have seen so many new companies come into existence is insane. I have also seen a lot of companies not make the cut and end up burning through all their startup funds quickly. There are a lot of reasons for companies succeeding and failing, but there are some sound things that every company should follow and that is to buy their supplies at the best cost. Ecommerce is about success and if you are selling online then you already know that you have to ship those items to the customer. One way or another this is going to be a cost and you want to make sure it is not going to be a cost that will shut down your company. So learning to shop the best locations and getting the right products can be the difference between a competitive advantage and bankruptcy. So let’s go over a few things you may have not thought about before.
The thing we see the most is that people are generally more prone to going towards convenience instead of the best option. This means different things for many people too. For some companies, I have seen them buy all of their shipping supplies locally and then brag about this as a selling point. What we found is taht they supported local companies and that is something that we all liked. But the downfall is that they only had a small sampling of options available to them. They had to use the packages, tape, and cardboard boxes available to them within a 20-mile radius. What this turned out to be for the companies that did this was a plane looking shipping platform for a very high cost. I did see some custom work is done which looked amazing, but that ended up being 20% of the cost of the product that they were shipping. That means a 20% upcharge had to be given to the client for the looks of the packaging or a 20% margin loss on the seller’s end. Either way, their competition was not dealing with that cost and ended up putting them out of business.
The most common thing we saw were companies purchasing all of their goods on Amazon. Now if you are simply getting office supplies I would say this is an acceptable option. But people were buying thousands of cardboard boxes, rolls of tape, and bags on a platform that boasts good shipping. Well, they got their supplies within two days, but they did not get bulk discounts or any advice at all on the products they ordered. This was a major issue because the fact is these companies were generally not competitive on the shipping section and ended up losing out to the competition that was always cheaper or able to offer free shipping and low prices. This hurt the minds of many CEO’s but the fact is that they could not compete doing this because they were purchasing from the wrong locations.
There are large companies online that are packaging supplies stores that specialize in this area. Not only do they give advice on the products you are purchasing when you call in but can help with bulk discounts on the whole order. They always beat amazon and end up giving companies advice that lowers costs even further. So don’t lose out, thrive this year.
