Fifty Shades of Green
Is a sustainable ecommerce business for you?
One week after Earth Day, much of its symbolism may be lost among the general public. But increasingly, consumers are listening to the growing wave of concern with respect to sustainability, climate control, and all red flags pointing to a devastating forecast for the planet’s well-being.
Whether or not you are personally committed to the cause, incorporating its elements into your business is not an unwise move. Following an unusual drop in interest in environmental conditions, Americans have expressed a sharp increase in concern for the planet’s health over the last decade. Many direct that concern beyond their personal habits and straight into purchasing decisions. This also holds for many European countries.
Meet their challenge in your ecommerce business by evaluating your operations from the ground up. Visible efforts range from sustainable packaging and shipping materials. Often resellers hone in on actual products that represent a respect for the environment. Beyond that, proactive messaging can express an honest concern even if an immediate switch to sustainability may be a fiscal nightmare in the short term.
The gradual move to online shopping, which accelerated in the pandemic year of 2020, made cardboard boxes a household staple. To many, that opened eyes and raised concerns.
Real life stories
High-profile shoe retailer TOMS went all in with a comprehensive focus on environmental advocacy reflected in its packaging (made of mostly recycled waste material and printed using soy ink). TOMS shoe products incorporate sustainable materials including natural hemp, organic cotton, and recycled polyester as an alternative. Other fashion and home-related sellers followed suit, realizing not only the PR benefits, but the ability to recruit excellent employees, and to minimize expenditures on graphic design that typically target high-end art with a range of vibrant colors. As it turns out, the fave shades of the day are brown and green.
Followed by a litany of fellow merchants, the TOMS approach demonstrates the power sellers still hold in making marketing decisions. Consumers who are on the fence about spending a bit more than planned may be convinced if a business has an honest and enduring commitment to sustainability. On the flip side, those not necessarily passionate about conservation are also not offended by green-friendly packaging. It’s a win on both counts.
So where do you start? First, you are the best judge of how much you can afford to devote to running an eco-friendly ecommerce business. Newcomers or low-margin stores may not realistically sustain sustainability, but words count. Formulate a message and make it clear in your marketing, on your page, and in personal messages to customers.
Adopting environmental-friendly business operations is a goal within reach to merchants with a solid customer base and decent revenue stream. If so moved, consider the following to begin putting your passion into practice:
It’s no secret that consumerism mirrors culture, and vice-versa. Proudly focusing on an honest desire to contribute toward a healthy planet will be more than just personally fulfilling. It will be a show of integrity that will at very least impress potential customers, and at most will earn a loyal base.
Working out the kinks in a new online store, or fine-tuning an existing one, requires a commitment of time, energy, and knowledge. Your business is your baby, but it’s also likely to be your bread and butter. Among the myriad factors to focus on is Average Order Value, or AOV. Getting up to speed with familiarity of that term and its indicators may make a difference between a boom or a bust.
Average Order Value is a metric that measures an average total of each order placed with a merchant over a set period of time. With this gauge in hand, you can map out strategies from web store layout, pricing, and how much to devote to advertising. As a rookie, you have the advantage of beginning that measuring system early. But as you proceed through a host of sales, it becomes even more important.
Of course, every sale is a good sale. But to maximize profitability, it’s essential to make the most of each shopper’s experience. Determining who buys what, when, and how the buyer may be operating when making purchasing decisions, you are instantly ahead of the game.
Find your AOV
Here’s how to calculate your Average Order Value: Divide the number of orders by the total revenues. Sound easy? It is. AOV reflects sales per order, not sales per customer. Returning customers do count, but surprisingly, not as much as it may seem.
Don’t think in terms of gross profit or profit margins. Those are strict business indicators resulting from sales, and not a marker used in increasing sales. To understand this better, think of a home goods e-seller offering three lamps priced at $24, $39, and $88, with an average AOV of $37. This figure presents two storefront trends: first, customers are not buying multiple items; and second, their sales are most often represented by the lowest-price item.
Now you’re armed with overall stats that can drive your marketing and advertising decisions and your product selection. Attracting high-volume buyers is a lofty goal, but keeping it simple and tied to proximate reality allows you to use real-time data to not reinvent the wheel.
The economies of scale prove that mid-sized and large ecommerce stores realize a much higher profitability level with sales at just a few cents per unit. Smaller entities must show a greater volume to make a difference.
Sell up and Upsell
The old-fashioned concept of romancing clients works well here. Convince customers that they should consider expanding their purchase habits by trying similar or new products. Use app features to “recommend” other products as they are both viewing and purchasing their targeted choices. Employ friendly and persuasive text, short in nature, to persuade them. Don’t be afraid to use their previous buys to suggest new purchases.
If you’ve spent time as a shopper on Amazon, you’ll understand how effective this can be. That mega-platform has a robust, built-in mechanism for displaying high volumes of similar products, even including purchases others have made after they either bought or glanced at similar items.
The more you personalize the customer experience without having to manually reach out, the faster your profitability will grow. Approached carefully, you will earn the loyalty and trust of longtime customers who get that you get them. And that goes a long way in the chaotic world of online selling. For more excellent advice, see Shopify’s tutorial.
Even rookie ecommerce merchants are keenly aware of the concept of seasonal sales. Constant reminders urge readying for the Christmas holiday, with mentions popping up earlier and earlier each year. But successful retailers and wholesalers understand that there are four seasons to every year, and a customer base that has its eye on each one.
Inventory and acquisition strategies are set in stone for big box and prolific sellers. Smaller entities operating solely online enjoy more flexibility in adjusting their plans for accommodating demands. Whether you’re a drop-shipper, a base retailer, or a customizing artist, you should develop a solid annual plan for supplying customers with products to fit the season.
Seasons are relative to a particular industry, for the most part. If your product line is limited to ski supplies or apparel, for example, you know that off-season sales are important, but incorporating warm-weather goods is probably not a priority. That said, there are ways to harness the power of customer demands based on a close following; to offer products tailored to their beloved activity.
Code Red for Ecommerce: Using Universal Product Codes for International Shipping
E-commerce hits on a dynamic set of options when considered a global entity. US-based sellers enjoy a large market due to its simple population figures, but what happens when you want to expand your horizons and sales, and ship internationally?
There are factors at play, and each should be explored. Besides shipping costs and difficulties in communications at times, a major element relates to trade customs and duties. Thankfully, there is a universal code assignment system to ease the pain of having to formulate your own procedure.
Classifying products goes to the heart of custom and duty requirements, or taxes paid to governments in the course of trade. Tracking the type of goods being imported and exported is a primary function of all governments, and not every category is equal. If you endeavor to spread your sales territory across borders, get up to speed on the concept of clarifying the type of sale you’re making, and stay within the compliance expectations of various purchasers to maintain good relations. Even though the importer (seller) is technically responsible for paying customs and duty fees, purposely mischaracterizing the goods category can land you and/or your buyer in hot water. At best, it may cost your buyer more in customs and duty fees.