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Selling Online: Ensuring Your Costs Don’t Ruin Profitability

By 3rd August 2012No Comments

Mark Stevens

Posted by: Mark Stevens

One of the interesting items at today’s UKTI ICT summit was that according to BT’s CEO Ian Livingston one third of all UK SMEs sell online, the highest proportion in Europe.

Of course, selling online presents a massive sales opportunity, but one of the associated challenges that businesses also face is increased cost complexity to meet customer expectations of seamless sales and customer support processes.  The major costs areas of merchant card fees, transportation, ICT infrastructure and customer support infrastructure are each subject to complex tariffs which can increase the Total Cost of Purchase if not managed correctly.

Understanding your cost base in detail is the key to ensuring you are achieving optimum profitability, but it’s not for the faint hearted. If you are struggling to increase profitability from online sales you may wish to consider for yourself the answers to some of the questions I’ve recently discussed with clients which have resulted in changes to suppliers and tariffs and improved their profitability:

– what is the spending profile of each credit and debit card type I process on my site?  Are current suppliers’ tariffs optimised for my profile?

– am I using appropriate delivery periods to meet my customers’ needs? are any fuel surcharges on courier and transportation costs fair and changing in line with costs?

– am I able to evolve my ICT infrastructure without facing high termination and change fees?  How are my inbound call costs affecting the profitability of my sales?

Feel free to contact me on 01932 345460 or at mark.stevens@auditel.co.uk to arrange an Auditel Business Health Check and we can help answer the questions for you, with a view to reducing your Total Cost of Purchase.