Strategic Operations For Ecommerce Business – Operational Strategies
Operational strategies for ecommerce business refers to the methods companies use to reach their objectives. By developing operational strategies, a company can examine and implement effective and efficient systems for using resources, personnel and the work process in order to achieve the goals.
Top 5 operational strategies for ecommerce business:
Operations strategy provides a plan for the operations function so that it can make the best use of its resources. Operations strategy specifies the policies and plans for using the organization’s resources to support its long-term competitive strategy and helps the business to grow.
1. Mapping Your Growth
Growth in ecommerce is often considered in terms of revenue generated by marketing and sales. However, growth in products is an area that needs to be addressed. You will have to figure out how you will introduce new, exciting products to your customers? Why would they buy from you rather than a larger reseller? Can you get them to come back and buy other merchandise after the first is purchased or can you retarget them?
Well established ecommerce sites can overtake the market leaving precious little for smaller sites. To give a consumer a reason to choose, you require a combination of better service, better pricing, and unique products that tie effectively with other products you’re selling but getting to that point requires being able to work with suppliers seamlessly.
2. Working with Suppliers
Increasing the number of quality suppliers, particularly in a global space, can be an enormous undertaking for smaller startups and mid-sized ecommerce companies. The natural inclination is to limit supplier relationships so they can be managed properly for better operations. But the only way to gain access to more diverse products and build a following is to expand the net as possible.
Scaling the supplier population requires a streamlined onboarding and management system. There needs to be a clear process for making a supplier payable in the system, including gathering payment details, accepting invoices, performing compliance checks. Payment methods, particularly for global suppliers, are very much important as not every payment method is optimized for a specific country and amount.
Many times, procurement teams hand off these processes with little support for AP which breaks the process which causes additional friction between the suppliers.
You need to figure out the areas that must be addressed and can be addressed through more automated ways such that it will free the time of the executive to be more creative around solving more complex problems.
3. Minimizing Risk
As the “coordinator” between consumers and suppliers, the risks in ecommerce lies where things can go wrong such as, inventory not arriving or getting the wrong products, so orders can’t be fulfilled and hurt the customer relationship, returns and chargebacks affect revenue. Matching supplier shipments with payments depends on a certain amount of diligence to data and the ability to flexibly adjust payments. There are the basic financial controls that help to eliminate internal and external fraud.
4. Creating a Culture of Improvement
The only measure for improvement as an e-ommerce company needs to focus on is productivity as almost every other area of growth can be addressed with more investment. For example, you can always spend more on ads to generate more traffic and engage more customers and ultimately more sales. Also, you can always rent out more warehouse space to store more goods. You can always reduce the profit margin to compete with another seller, but when it comes to improving those areas, it’s not scalable.
Instead, look at what amount of improvement per dollar spent can generate revenue. You find solutions that handle 10 to 100 times what it would take a full-time employee to handle and those solutions will raise the operational best practices for the organization. Those factors will increase your operational capacity as well as execution excellence, which adds greatly to the culture of improvement.
5. Optimize your business
Ecommerce optimization is an integral approach to improving your website and allowing visitors to easily convert into customers. From navigation and design to content and product descriptions, everything on your website should be intentionally leading users to the end goal. We provide effective digital marketing techniques for e-commerce including: