How eCommerce Businesses Can Drive Profitability and End the Year Strong

1. Inventory Optimisation: Use data to categorise products (A/B/C/D) and prioritise high-margin SKUs for promotions, especially during holiday sales.
2. Focus on Contribution Profit: Avoid sitewide discounts; instead, discount seasonal or overstocked items to protect margins. Set contribution profit goals, not revenue targets.
3. Bundling and Upselling: Increase average order value (AOV) by bundling high-margin products or cross-selling relevant items.
4. Leverage Data-Driven Marketing: Align ad spend with products that have the shortest path to conversion and highest profitability, optimising paid campaigns for gross profit, not just revenue.
5. Real-Time Inventory Management: Use real-time data to keep popular products in stock and avoid marketing out-of-stock items, which wastes ad spend.
6. Personalised Retargeting: Retarget high-intent customers with relevant products, using data to serve personalised ads for items they previously viewed or added to their cart.
7. Premium Shipping Options: Offer premium or express shipping at a markup, especially during peak periods, to boost AOV without needing discounts.
8. Increase Free Shipping Thresholds: Raise the free shipping threshold slightly to encourage customers to add more to their cart, driving up AOV.
9. EDM Campaigns for High-Margin Products: Send weekly email campaigns focused on promoting high-margin items, bundled offers, or exclusive deals for loyal customers.
10. Dynamic Sales Strategies: Use customer insights to run dynamic, targeted promotions—focus on product categories with high demand and short sales cycles.

While the strategies outlined can significantly enhance profitability for many eCommerce businesses, they won’t necessarily apply to all. Each business has unique pain points, whether it’s high customer acquisition costs, inventory mismanagement, or low conversion rates. The key is to evaluate your specific challenges and selectively implement strategies that align with your goals.

For example, if your AOV is low, focus on bundling and upselling. If margins are being eroded by heavy discounting, prioritise contribution profit over revenue. Adapt and apply the strategies that will truly drive growth for your business.

By implementing these strategies, eCommerce businesses can optimise both sales and profitability, positioning themselves for a successful close to 2024.