Imagine this: You are born in Vigo, you grow up, create an online shop and you end up having a monthly turnover of millions almost without workers or marketing budget. And all thanks to 7 simple tricks that any e-commerce could use but only a few know.
In the middle of 2015, my small team and I decided to monitor the prices and movements of our competitors manually. We clearly saw how we could increase our margins and sell more just focusing on some common facts. This made us get a €1,5M sales revenue at the end of the year.
After that, we created our own tool, Boardfy, where we were able to automate the complete process of those 7 steps and now we are selling it in www.boardfy.com.
This are the 7 strategies we followed
1. Raising margins
When we started monitoring the prices of our competitors we realised that we had the opportunity to raise the price of lots of products and we didn’t know it. For example, we were selling one product for €320 and the next competitor was selling it for €370. So we were losing the opportunity to earn €49,99.
2. Winning the best price battle
We looked over our whole catalogue and discovered that in over 650 of our products we had not the best price but the difference with the best competitor were less than an euro. We decided to decrease the prices in all those products where we could maintain a good operating margin.
3. Negative margin
I don’t want to sound harsh but the fact that you are selling tons of products and billing great amounts of money does not mean you are really winning money. It may boost your ego, as well as it happened to me, but because of our decreasing prices we discovered that it is not a good idea to always be part of a price war. You can lose money if your operating margin is negative. That’s why we also automated a process that detects every product in this situation so that we can deactivate them temporary or stop selling them.
4. Products nobody else was selling
Other of our best strategies was to look for products at Amazon and Google Shopping and discover that nobody was selling them there. There’s nothing as good as being the only seller of a product on those marketplaces.
5. Out of stock? I’ll handle it
We never used this strategy before the creation of Boardfy as our internal tool. We notify if any competitor is out of stock, which allows you to raise the price of that product or even to activate them. We got some extra money with this.
6. Amazon’s Buy Box and its trick
You have probably suffered this too: After applying all these strategies and having the best price we did not sell enough. To get Amazon’s Buy Box you need more than a good price, as other points like customer’s feedback or the delivery date. In our case, we monitor every product outside the Buy Box, change the price and announce it to get more sells and feedback.
7. The most important: automation
Maybe during the first years of e-commerce you could do all those processes manually, but right now there are over 2M sellers at Amazon and over 650K online shops, so that pricing is a process that needs to evolve. That’s why we created a tool that not only monitors the prices but also offers sale opportunities.