10 Ideas to Grow Ecommerce Profits in 2012

The 2011 holiday season was record breaking for online commerce. Sales hit a new high of $37 billion, according to comScore, the research firm. With the New Year, it is time to examine the key factors that have made your online store successful, and how to further grow your profits. Below are ten suggestions to help you jumpstart this process.

1. Enhance Your Product Assortment

There are several ways to enhance the product assortment offered on your site. You can analyze what sold well over the holiday season and introduce similar products. Also, you can review the products that both sell well throughout the year and generate good margins — and then add to these type of products. You could also enhance the assortment by introducing unique products that set your store apart from the competition. Consider surveying your customers to identify the new products that they want to purchase.

2. Expand into Foreign Markets

Expansion into foreign markets can help generate addition profits with little investment. If currently you only take orders from U.S.-based consumers, start selling your products internationally. You can target specific countries by creating localized marketing material for your product offerings. Companies like Bongo International can ease the process of international shipping by giving you a domestic U.S. address to ship to and then they forward the shipment to the international destination of the customer.

For an investment, you can localize your site for specific markets by supporting the local language and currency depending on the customer’s locale. Though, in my experience, to start selling internationally this localization is not required.

3. Implement Subscription Ordering

Subscription ordering typically results in increased revenue. Many retailers have implemented this for products that not previously sold via subscription, such as shoes, jewelry, and cosmetics.

Vitacost, a nutritional supplement company, offers subscriptions to sell its products.

Vitacost, a nutritional supplement company, offers subscriptions to sell its products.

As a retailer, you need to assess if your products can be sold via subscription and if your customer base has the appetite for this model. You will also need to make sure that your sourcing or manufacturing costs are mostly static so you can keep the subscription amount constant.

4. Improve Customer Experience

It is difficult to quantify the value of a great customer experience. But it can make or break your business. Run a customer survey or hire a usability consultant to assess the current customer-experience challenges on your site. Small usability tweaks can go a long way in improving the overall customer experience, and increasing revenue.

As an example, an ecommerce site I recently reviewed — in my work as a consultant to large online retailers — did not allow its users to add products to the cart from the search results page. Users could find the products they were looking for, but most of them abandoned the site without going through the checkout process. A simple tweak — to allow users to add products directly to the cart from the search results page — resulted in revenue increasing by more than 40 percent in six months.

5. Launch New Sales Channels

One reason for the brisk growth of online commerce is the introduction of multiple ways to sell products. If your site does not support a checkout using a mobile device, then enabling that will result in incremental revenue. This will require a little investment. But given the pace at which mobile commerce is growing, you should receive a return on that investment quickly.

Business-to-business sales are another channel that you can launch. This will require offering new features like (a) product part number search and upload, (b) quoting, and (c) integrating with procurement systems — like Ariba.

Lastly, consider selling on eBay. It’s easy to enable, and you can generate more profits by doing so.

6. Collaborate with Another Site

Your site can generate additional revenue by collaborating with another retailer, to cross-sell each other’s products. For example, if you sell home furniture, then collaborate with a home decor retailer by offering those products, too. It will lead to increased sales for the home decor retailer and earn you increased profits by receiving a commission from those sales. Moreover, the home decor retailer can offer your home furniture products on its site, to further grow your sales.

Walmart recently launched Get on the Shelf, which allows retailers to submit their products for sale on The submitted products are voted by the site visitors and the top three will be sold on This could be an opportunity to give your products more visibility and, potentially, collaborating with to sell them.

Walmart's "GetOnTheShelf" portal.

Walmart’s “GetOnTheShelf” portal.

7. Increase Prices

To be sure, you should increase prices infrequently. But it’s the easiest way to make more money. Compare prices with your competition to determine if you can increase them. Then, check the tolerance level of your customers by informing them in advance. Even a minor increase — a few cents, perhaps — across your entire product catalog can add up to a lot of additional revenue. If prices change frequently on your site or if you sell one-of-a-kind products, you can likely increase prices with little resistance from your customers.

8. Improve Your Marketing

You can always improve your marketing efforts, both for your site and your products. To start, review your paid search marketing strategy to determine if you are receiving an adequate return on your investment. If not, look at investing in alternative keywords or use other means to market your site, such as improving the natural search rankings. We’ve addressed strategies for increasing organic search rankings, most recently in “Optimizing a Page for Search Engines,” a three-part series.

Other ideas for improving your marketing efforts include the following.

  • Loyalty programs. Reward longstanding customers with special offers.
  • Lapsed customer offers. Send email campaigns to customers who have not visited your site in a while, offering discounts to them.
  • Facebook. With a user base that will likely hit a billion this year, Facebook represents many marketing and engagement opportunities. I addressed some of these in “5 Pointers for Using Facebook for Your Ecommerce Business,” a previous article.
  • Free samples. The old marketing technique of including samples in customer shipments still works.

9. Address Security and Performance Concerns

Security concerns by your shoppers can cause them to not use their credit cards online, or even visit your site. Using an SSL certificate and displaying the logo from the SSL provider prominently can help address these security concerns, resulting in more checkouts and greater revenue.

Slow performance can also deter customers from coming back to your site. If your site experienced performance issues during the 2011 holiday season, it is important that you improve it. This could require investments in bigger servers, and tweaking specific areas of the site that had performance problems. Consider the growth rate of your site while working on improving its performance and scalability.

10. Operate More Efficiently

Reducing costs will increase profits. The start of the year is a good time to review your fixed and variable costs. Consider (a) re-negotiating with your suppliers, (b) discontinuing products with low margins or low inventory turns, and (c) identifying alternative shippers and carriers. Check your accounting systems by making sure your pricing and invoicing processes are accurate. Lastly, consider outsourcing non-critical functions, to focus on higher value activities.


Gagan Mehra
Gagan Mehra
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