The world of business is becoming increasingly more competitive than it ever has been before, especially in the digital world. More businesses were set up last year than in any other year on record and because the internet has made being a business owner so accessible, just about anyone with an acorn of an idea can go ahead and start their own company.
Because of this level of competition it is vital that online businesses spend a great dal of time focussing on their balance sheet and whilst profit and growth are key components to a successful business, reducing unnecessary costs is equally as important. There are many costs within a business that can be reduced or eradicated and today we are going to take a look at some areas of doing business which could be costing your online business to leak money where it shouldn’t.
Because of the nature of many online businesses and digital service providers, customers and buyers can fraudulently claim chargeback from the merchant, this can hit your business hard in the pocket and you should pay particular attention to this cost. The chargeback ratios between the cost of a product and the cost of the chargeback to the business are staggeringly high and some suggest that for every $100 of chargeback, it could incur costs of up to $308 to the business. This cost is thanks to the time spent on dealing with the chargeback, lost revenue and profit from products as well as potential penalties which can be given out. You should be contesting any chargebacks when they hit and ensuring that you have a strict receipt process and log details of customers in an efficient manner in order to prevent chargebacks.
Businesses are regularly offered free trials and subscriptions to magazines, software and online solutions and many of them will automatically subscribe you once the free trial is finished. Business moves at great speed and spotting these all subscriptions is not always easy but after time they can cost your business a great deal of unnecessary money. You may think that a few dollars each month is not a lot but multiply this by many different subscriptions and then the amount of time that it may take to notice them and all of a sudden you will see a large chunk of change heading out of your company for something which you simply do not use.
Poor Customer Service
Online businesses live and die by their reviews and if you have a team or individuals who are given poor customer service then this could be costing your company vast amounts of money. When you train your staff, you are investing money into them, the ROI of which will be happy customers and if they are not performing to what is expected of them then you will have wasted the investment and you will be losing money each day by way of sales and negative press. Customers are key to every business on the planet and if your business is not treating them right then you will be losing money hand over fist, ensure that your customer service is on point and that your recruitment and training process is of a high level.
It is worth reviewing your spends each quarter of the financial year to ensure that your business is saving money where it can and avoiding the spending of unnecessary dollars which cost your business revenue and wasteful dollars, the profits are important but so to are the spends.