But there’s more you need to do! You need to start thinking about how your business will change (for the better) in 2015 and what steps you’ll need to take once things slow down a bit in the new year.
Keep reading to learn more.
Is Your Business Going to Scale?
Before reading any further, take a few minutes, and ask yourself, “What would it take for me to double my profits?”
If your answer requires you to do twice as much work as you’re doing right now, you need to think more about how your business can scale efficiently. Just think about it. If you’re putting in long hours in Q4 2014, imagine Q4 2015 where you’re putting in twice as many hours. Are there even that many hours in a day?
Profits vs. Sales
If you’ve been reading closely, you noticed that I said, “double my profits“, not “double my sales.” I want Amazon sellers like you to think more about their businesses in terms of profits as opposed to top line sales numbers.
Doubling sales definitely does not equate to doubling profits. Some costs are variable and increase exponentially as sales grow linearly. One example might be warehouse space, or vehicle costs to transport twice as much inventory. Or the cost of your/ your employees time to find twice as many items. This can mean you’re actually losing money as you sell more.
If there’s one change you make to your business in 2015, it should be to start looking at profitability. And focus on growing that number.
Growing Profits in a Scalable Way
What does it take to increase your profit? It’s a simple question, but the answer can be incredibly complex. If it was a simple question, nobody would ever go out of business!
A few possibilities include:
- Sell more of the same items at the same prices.
- Sell more of the same items at higher prices.
- Sell a lot more of the same items at lower prices.
- Start selling new items at a profitable price.
- Reduce your product costs.
- Reduce your business costs.
And of course, they’re all easier said than done. And they all require work on your part. But that’s part of the formula for success. Invest your time early in the year, so your business is prepared to succeed in the future. There are lots of ways to do this. Some include:
- Growing the wholesale side of your business – A great way to lower product costs and maintain a steady stream of inventory.
- Branching out into new product categories – Get approved for grocery, for example.
- Hiring new employees – Adding new employees can have a high up-front cost, but can free up your time to focus on other aspects of growing your business.
Get Set to Experiment
And of course, adjusting prices to find (and maintain) your desired balance between fast inventory turnover and maximum selling price is probably the biggest key to growing profits. Systematically adjusting prices based on your competition (or lack of competition) helps you to spend more time in the Buy Box and helps you to maximize the value of each sale. You’ll also find that this is something that software makes much easier.
That’s why we created Sellery, the most flexible and powerful repricing software available today. Ask us questions about repricing, we’re here to help. Try emailing us, or leave a question here in the comments.