CAll Us: +1 888-999-8231 Submit Ticket

How To Deal with Inflation: A Guide for Ecommerce Businesses

The U.S. inflation rate is four times higher than before the pandemic. According to the Bureau of Labor Statistics, the Consumer Price Index (CPI) increased by 8.5% (data for March 2022). From gas to gadgets, everything’s more expensive.

As an ecommerce business, you’ll likely see your margins shrink. Suppliers might raise prices, you’ll pay more for shipping your products, and your employees will ask for a raise.

The government has put the wheels in motion to bring inflation under with the tools at its disposal. The high inflation period won’t stay around forever, but it will be a while before things go back to normal. In the meantime, you’ll need to come up with a strategy to combat inflation.

Here are some ways to deal with inflation:

1. Raise Your Prices

Raising prices is the quickest answer to the effects of inflation.

If you’re not comfortable raising the prices, you can negotiate a better deal with suppliers. Just note that suppliers won’t agree to a lower price in most cases because they, just like you, need to preserve their margins.

Most ecommerce owners feel at least some reluctance about raising prices because it can drive down demand.

One of the biggest ecommerce business issues is owners tend to overestimate the customer’s sensitivity to price changes. But customers also focus on your product’s quality. As long as your product is of good quality, you probably won’t see a significant reduction in demand.

Not raising prices can reduce your overall profitability and purchasing power.

Suppose you sell a kilo of tea for $10, with a $2 gross profit margin, and the supplier raises the price by $0.50. If you continue selling at the same volume, say 1,000 kilos, your gross income will decrease by $500.

But that’s not it. Even if your gross income is $1,500 ($1.5 x 1,000 kilos), it’s less valuable because of inflation.

For example, last year, you may have spent $1,500 on 550 gallons of gas. With prices up by 48%, you’ll only be able to buy roughly 372 gallons of gas for the same amount.

2. Find Other Suppliers

Changing suppliers isn’t as easy as it may sound to some. You’ve worked hard to find your current suppliers and build a relationship with them. Finding new suppliers means you’ll need to start from scratch.

But with economists saying inflation will take years to normalize and that it will have a lasting impact even once it does normalize, finding new suppliers may be worthwhile. You don’t want to source low-quality products in an attempt to improve gross margins. Stick with the current quality and look for suppliers willing to offer better pricing and payment terms.

Remember that you don’t only pay for the price of a product. You also pay for shipping. Finding suppliers that are closer can trim a considerable amount from the product’s price.

3. Manage Cash Flow Well

A cash-starved business is destined to fail. Cash flow management is a key part of your ecommerce business’s financial planning, even more so when in an inflationary environment.

Higher prices mean you’ll need more cash to pay suppliers for each order, but there’s more to consider. Ecommerce inflation doesn’t just impact your product’s cost. It will also affect your utility bills, salaries, and other operational and administrative expenses.

Price increases across the board mean you’ll need more cash on hand. After all, if you run out of cash, you might have to halt your business’s operations.

There are several ways to manage cash flow when trying to navigate inflation:

  • Negotiate longer payment cycles: Ask your suppliers for longer payment cycles so you can hold more cash for longer.
  • Manage inventory well: Keep your inventory lean, but always have safety stock. This way, you can continue deliveries even if your supplier delays the delivery because of shortages or supply chain disruption.
  • Cut back on expenses: Overspending is a common ecommerce business issue. For example, if you sell fashion products, it’s great to have fashion magazine subscriptions for your employees to keep up with trends. But when you’re trying to preserve cash, you can opt for free resources and cut back on expenses wherever possible.
  • Get a business credit card: A credit card will ensure you always have access to money in an emergency. Sure, you can get a short-term loan, but you don’t pay interest on a credit card if you pay the amount back within a month. Note that it’s best to use your credit card as an emergency fund and pay it back in time. Credit cards charge higher interest rates and can cost you a lot of money.

When discussing how to deal with inflation, cash flow is key. It can play a big role in helping you sustain your profitability and fueling growth.

Why Learning To Deal With Inflation Is a Must

Milton Friedman, a Nobel Laureate, suggested that inflation can be thought of as a hidden tax. You don’t pay it explicitly, but it takes money out of your pocket year after year. It does so implicitly by reducing your purchasing power.

Inflation requires careful consideration for planning both business and personal finances. You might be happy about a 5% increase in revenue, but you’ve lost money if the inflation is 8%.

Similarly, investing in savings accounts also makes little sense during high inflation. If you’re holding emergency cash for your ecommerce business in any account that offers a rate lower than the prevailing rate of inflation, you’re losing money.

The effect of ecommerce inflation will also carry through into your growth strategy. As assets become more expensive and your current funds continue losing value, you’ll need to bring in more profits for capital expenditure.

Most importantly, you’ll need to reassess your cash flows. Your cash outflows will increase during an inflationary period. Running out of cash can threaten business continuity, and that’s why you need to deal with inflation.

Final Thoughts — How To Deal With Inflation: A Guide for Ecommerce Businesses

Ecommerce inflation can impact your finances in more than one way. With inflation at a 40-year high, it’s time for ecommerce business owners to reevaluate their finances and create a roadmap to navigate inflation. Once you know how to deal with inflation, you’ll be better positioned to strategize your growth through an inflationary period.

Raising the prices of goods is a good starting point, but you’ll need to do more.

Look for suppliers that can offer better prices and look at other expenses you can trim. For instance, check out Hostdedi’ managed WooCommerce hosting for a reliable, pocket-friendly hosting plan.

Source link

Product Page SEO: 12 Tips for Product Page Optimization

Online shoppers can’t buy a product if they can’t find it, so your product page SEO strategy is critical.

Implementing the best search engine optimization for your product pages ensures your products don’t languish on the last page of search results. But getting to the top of the first page of results requires utilizing content and technical best practices. This post reviews why product page optimization helps sales and offers our 12 best tips for product page SEO.

How SEO for Ecommerce Product Pages Drives Sales

Most buying journeys begin on shoppers’ phones. Even if someone purchases something in a brick-and-mortar store, odds are they started shopping on Google or another search engine. The harder someone has to work to find your product, the more likely they are to give up and buy from a competitor.

Unless you have the most brand-loyal customers in the world, buyers will search for an item and click on one of the first few results. Search engine optimization makes your products easier to find and thus more likely to end up in customers’ carts.

12 Tips and Product Page Seo Best Practices

So how do you ensure your product pages are fully optimized for search engines? Follow these 12 tips to help your product pages climb the search rankings.

1. Start With Keyword Research

To optimize your product pages so buyers can find them, you need to know what search terms people use. Utilize a keyword research tool to identify the best keywords related to your product. Analyze your competitor’s product pages to see what keywords they’re using and which ones they rank for. Then build your strategy around trying to outrank your competitors and capitalizing on the keywords your competitors overlooked. To learn more about building a keyword strategy for product pages, check out our ecommerce SEO guide.

2. Include Important Details and Keywords in Your Titles and Meta Descriptions

The title and meta description are the first things buyers see. Search engines display those two elements on results pages. Don’t stuff them full of keywords. Instead, write natural-sounding phrases that give buyers everything they need to know about the product, including:

  • Product Name, Brand, and Model. Be as specific as possible to capture people searching for that exact item. For example, Jordan Zoom Separate by Nike. 
  • Basic Description. You also need a basic description for people who weren’t searching for Nike Jordans, but instead searched for shoes. Something like “light-weight low-top shoes.”
  • Unique Selling Points. Highlight why someone would want to buy that particular product.

3. Utilized Structured Data

Structured data can be a game-changer for product page SEO. Many websites fail to take advantage of this technique. Structured data tells search engines where to pull information from a website. You’ll add the markup to your product page code to denote information such as brand, categories, ratings, and reviews. lists all the possible structured data points you can add to product pages.

4. Use Readable URLs

Use natural language in your URLs. A URL with a setup like /product-category/product-name-here will rank better than /product?=102020e9040945. The URL is another place to include important product information or keywords.

5. Write Unique Content

Don’t just copy and paste the product descriptions from your distributors. Unique content performs better in search and helps your listing stand out from the competition. Also, distributors don’t always utilize SEO best practices. You’ll want to incorporate your own keyword strategy into each product description.

6. Enable Customer Product Reviews

Reviews boost search and conversion performance. The social proof provided by a review encourages shoppers to purchase an item. Search engines like reviews because they’re a form of user-generated content and are a great source of keywords.

7. Add Images and Videos to Product Pages

Buyers want to see a product before they buy it. Adding high-quality images and videos to your product pages increases conversions, but image and video content help search results too. With images, you can add keywords to the alt-text description. Search engines also prioritize engaging websites, so videos help boost your site by increasing visitors’ time on the page.

9. Include an FAQ Section

Like product reviews, FAQ sections are another great way to add keywords to your product pages. When doing your keyword research, look for any questions that appear as search terms, and be sure to answer them in your FAQ section.

10. Don’t Delete Out-of-Stock Products

Don’t delete out-of-stock products. Once a page ranks, you don’t want to undo all your product page SEO work. Give shoppers the option to get an email alert when the item is available again.

11. Develop a Linking Strategy

Backlinks and internal links help product pages too. Many people focus their linking strategies on their homepage and category pages, but these tried-and-true SEO techniques apply to product pages too. Consider using an ecommerce content strategy, like a blog, or the answers in your FAQ sections to link to related products to add internal links.

12. Ensure Your Site Loads Quickly

Site speed is a vital factor in search algorithms. Search engines rank faster loading sites higher than slow-loading ones. Also, if your site loads too slowly, shoppers will bounce and head to a competitor’s site. Remember, today’s shoppers are used to the one-click speed and convenience of buying on Amazon. Keep things moving quickly for search engine and conversion rate optimization.

Create a Faster Loading Product Pages with Hostdedi

Fast-loading product pages start with a quality web host. Hostdedi Managed WooCommerce hosting plans offer lightning-fast loading times and the convenience of automatic updates to ensure your plugins and core software are always up-to-date. Pick your plan and sign up today.

Source link