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Cash Flow Forecasting: Pros & Cons You Should Be Aware Of
BusinessCash Flow Forecasting: Pros & Cons You Should Be Aware OfCash flow forecasting allows your business to plan for future cash needs by anticipating future cash inflows and outflows within a specific timeframe. Although this can enable you to be prepared and adjust to changing circumstances, cash flow forecasting still has drawbacks. Below, we dive into the pros and potential pitfalls of cash flow forecasting to help you optimize your use of the process. 6 Key Pros of Cash Flow Forecasting 1. Equips Businesses With Predictability & Foresight As you create cash flow forecasting calculations, we recommend that you look at individual streams of revenue as well as liabilities from expenses. This information allows you to anticipate when there will be a cash surplus and when funding will be tight. You can then allocate that surplus when needed. You can also accurately predict other things, including market conditions or political influences, that might impact your cash flow and overall business growth. 2. Mitigates Cash Shortages & Enables Anticipation of Bottlenecks Cash flow forecasts can reveal potential cash flow shortages, helping you avoid insolvency or at least lessen its impact. For example, management could postpone investments, liquidate assets, lower cash withdrawals, or pay suppliers with credit to minimize cash flow shortages. 3. Enables More Informed Future Planning Cash flow prediction helps you decide if a significant purchase can be made without jeopardizing the company's financial health. It’s a way to see if your organization can handle introducing new products or when is the best time to retire executives. This shows top management when and how the company can achieve stability. » Discover the benefits and difficulties of conducting a revenue analysis when planning for the future 4. Helps Determine Whether or Not Spending is on Target No matter how big or small, we know that every business has monetary targets it aims to hit. By analyzing your company's cash flow prediction, you'll learn if and when your goals are within reach. Moreover, you get to look closely at your budgeting and individual line items, analyze any patterns, and create more accurate budgets in the future. » Follow these tips to keep track of your business expenses 5. Simplifies Keeping Track of Overdue Payments Small businesses often extend credit to customers, which we think can be a risky move. A cash flow forecast helps you keep tabs on outstanding payments and better prepare yourself for any expenses or liabilities that might come up. It's also a way to manage any credit you offer customers who frequently miss payment deadlines. 6. Streamlines Management of Surplus Cash It’s essential to know when a surplus will occur so that you can make sure the money is used in the most effective way possible. For example, use it for debt reduction or reinvestment into your business. A few months of surplus implies you can afford to make long-term investments such as new products or services or implement new processes. » Follow this beginner's guide to profit and loss statements to help manage cash flow 5 Fundamental Cons of Cash Flow Forecasting 1. Complicated to Account For Unforeseen Factors We want to stress that cash flow forecasting is not an exact science. Many uncontrollable factors can affect the forecasted numbers: environmental changes, changes in political leaders, inflation, and emergency repairs. 2. Always Involves Some Degree of Probability While doing calculations, you might assume that nothing unexpected will happen in the future—no promotions, no price increases or decreases, and so on. This is unrealistic and could spell bad news for your company if you use it as a basis for business decisions. 3. Provides a False Sense of Security When you’re laying out your plan, you tend to create it with a positive outlook. But in reality, there’s a wide range of variables that impact the cash flow of your company. If you don’t have money set aside for unexpected occurrences, you're forced to make budget concessions elsewhere. 4. Manual Errors & Miscalculation May Result in Debt There are several potential issues you can face if you manually compile your cash flow forecast in a program like Excel. Inaccurate computations result from a number of human errors, including sloppy data entry, imprecise formulas, and duplication. All of these can be very expensive mistakes. 5. Can Result in Ineffective & Uninformed Decision-Making If your cash flow forecast is poorly crafted, you'll make ineffective and ill-informed decisions. For example, your company makes a large investment in cutting-edge production machinery in anticipation of future growth, only you're caught off guard later by an unanticipated change. If your revenue projections are too optimistic, you're in danger of overspending. The wrong forecasts put your business at risk of bankruptcy or other financial crises. » Analyze your net, gross and operating profit margins to make sure you stay on track What's the Verdict on Cash Flow Forecasting? While a cash flow forecast is an excellent way to predict the future financial health of your business, you should be aware that it’s not always accurate. Since cash flow forecasts don't consider many external factors, it's up to you to monitor and adequately respond to what's happening. We recommend that you incorporate accountability in all areas and include periodic reviews of your projection to control your finances better.
Best 12 Product Return Management Software For Ecommerce
BusinessBest 12 Product Return Management Software For EcommerceDo you know, 80% of ecommerce customers believe that a lousy return experience can break their loyalty? That’s the reason why you should integrate with good return management software and streamline your return process. If you are looking for return management solutions, then you are at the right place. Here we have curated a list of the top 12 software that will assist you in managing your returns. So, let’s dive in and check out all the software: Helplama HelpdeskHappy Returns Loop Returns Return Logic Returnly AfterShip Orderhive Ordoro Return Rabbit Narvar Ship HafbackReturnGo Helplama Helpdesk Helplama Helpdesk provides 24X7 return management in your store which ensures that no malpractice occurs while returning the product. It even assists you with the entire order and return history of customers which helps you in reducing return abuse in your store. Features Empower your customers to create returns/exchanges with an automated self-service portal.Allows you to download return labels in just a click. Helplama provides proactive support by automatically identifying delays related to your customers’ orders which you can solve beforehand and scale up the customer experience. Pricing Free- 15 DaysStandard- $99/Month/3 usersPro- $199/Month/3 usersEnterprise- $399/Month/3 users Start 15-day Free Trial Happy Returns Happy Returns is one of the few software that provides three types of returns solutions - return to the store, return bars, and product exchange. It provides an automated custom process by automatically submitting an electronic commercial invoice on your behalf. Features You can write custom return reasons, which will help you analyze the reason for product return. Provides multilingual support in 6 different languages like Dutch, French, Spanish, and more. Pricing Plus- $500/MonthEnterprise- Custom pricing Visit Website Loop Returns Loop Returns can automatically enforce your return policies and approve, reject, or flag a product return, saving you time and manual labor. The software has inbuilt metrics that can bifurcate the number of returns, exchanges, shopping, and more. Features Allows you to solve the reason for the return by collecting customer reviews and converting them into a report. Comes with a logistic feature that allows you to decide where the product should be returned. Pricing They have not listed the pricing. Visit Website Return Logics This software allows your warehouse team to get a birds-eye view of all the returned inventory, shipments, and more that have taken place in your supply chain. It even allows your customer support team to automate manual tasks and cut down on email queries. Features Return Logic provides warranty return and ensures that the returned item reaches your location safely. Gives you a report on the most profitable shoppers. Pricing Essential- $299/MonthBusiness- $599/MonthEnterprise- Custom pricing Visit Website Also Read: Learn eCommerce With Digital Experts Returnly If you are a company working for a cause then Returnly’s green return can be beneficial for you. The green return allows your customers to keep the product with them if it can not be reused, for example, cosmetic products, skin care products, low-value products, and more. Features Has a tracking page that assists your customers to track returns and order delivery. Allows international and in-store product returns. Pricing You need to book a demo to get their pricing. Visit Website AfterShip AfterShip allows you to custom-build a tracking page and provide branded experience to your customers. Additionally, it can send notifications to your customers via Email, SMS, and Facebook and make them aware of the return process. Features It can drive sales with email marketing campaigns. You can capture leads with AfterShips’s pop-up form. Pricing Essential- $11/MonthPro- $119/MonthPremium- $179/MonthEnterprise- Custom pricing Visit Website Orderhive Orderhive is a B2B and D2C order and return management software. It provides accurate stock counts with integrated warehouse management that saves your time and reduces the chances of human error. Features You can categorize, improve, and prioritize fulfillment categories. Comes with advanced reporting. Pricing Essential- $125/MonthPro- $225/MonthPro Plus- $325/MonthEnterprise- $500/Month Visit Website Ordoro Through Ordoro you can create and track RMA (return merchandise authorization) directly from their original order. The software can automatically send a return label to customers via email and ensure that your customers don’t send the article to the wrong address. Features Ordoro can receive and restock your returned orders.Can integrate with many shopping carts like Shopify, BigCommerce, Magento, WooCommerce, and many more. Pricing Free- 1000 Orders/MonthExpress- $59/MonthPro- $499/MonthEnterprise- $999/Month Visit Website Return Rabbit Return Rabbit’s workflow automation can automatically accept or reject a return request which saves your agents’ time. Moreover, it can automatically send emails to your customers and keep them informed of every return process step. Features Has dashboard analytic feature. Return Rabbit has an order tracking page that can be customized as per your store. Pricing Startup Plan- $200/MonthGrowth Plan- $400/MonthMarket Leader Plan- $515/MonthEnterprise Plan- Custom pricing Visit Website Narvar Ship Narvar Ship has more than 200,000 drop-off locations that allow your customers to easily return the product. You can even set VIP rules and prioritize your important customers. Features Can send notifications via email, SMS, Whatsapp, or Line. Promotes the exchange of products which reduces the return rate in your store. The software can predict the delay in delivery according to the courier service providers. Pricing They have not listed their pricing, you need to contact their sales team or book a demo to get a better idea of the plans. Visit Website Hafback Through Hafback you can build a branded return page and it can even integrate with your Shopify store in minutes. Additionally, Hafback works towards a green environment by planting 1 tree in exchange for 1 return. Features Hafback allows you to eliminate reverse logistics costs. It allows you to create a separate selling page for returned products. Pricing Basic- $199/Month Visit Website Also Read: 6 Best Plugins To Enhance Your WooCommerce Store ReturnGo With the help of ReturnGo you can easily convert returns into store credit and ensure you sell a product in the coming future. It allows your customers to drop the product at your nearby store reducing the chances of a product being lost. Features Can notify your customers of every return process reducing customer support queries. Provides actionable insights. Pricing They have not listed their pricing plans. Visit Website Conclusion Now, in the end, we hope that this article will help you decide on the best return management software. Although, most of the above-listed return management systems provide a free trial which you can use and then choose the best from the lot. However, if you are looking for software that allows you to discover your true ecommerce profit, then you should try BeProfit. It provides a cutting-edge cohort analysis for deep-level insights into customer lifetime value and marketing performance. Moreover, you can use the app anywhere and anytime to get your data. So, what are you waiting for? Start your free trial now!
Wix vs. Shopify for Dropshipping: Which Is Better?
BusinessWix vs. Shopify for Dropshipping: Which Is Better?The dropshipping business model is a popular strategy for small businesses. It eliminates the need to care for inventory and completely neutralizes the expenses of a brick-and-mortar store. Maintaining a physical store is expensive and time-consuming. Dropshipping eases these burdens by facilitating a competitive advantage over physical stores, primarily by minimizing upfront and ongoing costs. For instance, a third-party fulfillment company handles the ordering, shipping, and the rest—eliminating inventory and warehousing costs. The question then becomes which website builder offers the best dropshipping features. Both platforms allow e-commerce entrepreneurs to operate their online store, but when it comes to dropshipping, the two have some key differences that you'll want to consider before making your final decision. » Is dropshipping profitable? Discover dropshipping challenges and best practices Pros and Cons of Wix Pros Recently added dropshipping options Wix has recently added a ton of dropshipping functionalities to its platform. Most notably, merchants can now connect their stores to the Modalyst marketplace, where they'll access vetted suppliers and an infinite range of products. 2 business plans with built-in dropshipping Wix now offers 2 business plans that boast dropshipping integrations. Inbuilt SEO Wix's pre-configured search engine optimization capabilities are a significant advantage when it comes to SEO. Easy to use Wix is an easy-to-use platform with intuitive features and a user-friendly interface. Lots of customization Wix's website builder works from a drag-and-drop interface, offering lots of templates, themes, and visual templates to choose from. Cons Expensive to list lots of products Wix's compatible dropshipping plans can get quite expensive for larger lists of products. Modalyst fees Although Modalyst is a great dropshipping marketplace, it charges merchants a 5% transaction fee for each purchase. Pros and Cons of Shopify Pros Extensive range of e-commerce features Shopify offers a variety of features that allow you to upload your products and sell them directly to your customers. Limitless growth, flexibility, and scalability You can easily scale your operation and increase your business by adding more products, growing your customer base, and even hiring Shopify experts to help along the way. Complete control over your inventory There are no restrictions over how many products you can sell using the platform. Social media integrations You can easily reach a large customer base and increase sales by adding your products to social media like Facebook, Twitter, and Instagram. Great shipping options Shopify offers international shipping, allowing you to ship products to your customers in over 190 countries. Cons Ethically questionable Shopify has been criticized for not being as transparent as they should be on their terms and conditions. Less affordable Shopify starts at $29/month; however, the costs rise quickly after that. Limited flexibility Shopify isn't as customizable as other e-commerce CMS platforms with limited themes. » Looking for a Shopify dropshipping app? Compare the best Shopify dropshipping apps Cost of Dropshipping Depending on which dropshipping marketplace merchants connect to their Wix or Shopify store, prices will vary. For instance, Wix and Shopify are both compatible with Modalyst, Spocket, Salehoo, AliExpress, and many more. Both platforms charge additional fees for dropshipping suppliers and targeted ad expenses, which is an average monthly cost of $79. There are 2 main pricing considerations for selling products on Wix: Platform plan: $17-35/monthWebsite domain hosting: $5-20/year Dropshipping with Shopify is the same in this regard: Platform plan: $29-299/monthWebsite domain hosting: starting at $14/year The Final Verdict: Which Platform Should You Use? Dropshipping through Shopify offers merchants more options, but Wix is also a great option to use. With the choice, you should consider how complex your business is and what sort of features you need. Shopify is very flexible when it comes to dropshipping as it has a wide variety of e-commerce dropshipping-based features. While, year after year, Wix's platform is becoming more and more dropshipping friendly, adding functionalities that are sure to benefit most dropshipping entrepreneurs who would like more customization options. » Want to try dropshipping on other platforms? Here's all you need to know about dropshipping on Amazon
WooCommerce & BeProfit Success Story - 28% Growth in Just 4 Months
BusinessWooCommerce & BeProfit Success Story - 28% Growth in Just 4 MonthsRunning multiple eCommerce businesses is not an easy gig, especially given the stiff competition in the marketplace. Online sellers must oversee many things, from lead generation to order management to reduce unnecessary costs. Seam Lim -CEO of Lens007 and LensGoGo – could entirely relate to this challenge. But not anymore! Seam Lim has launched 4 successful online stores since 2016, offering glasses, contact lenses, and Japanese goods. This year, Seam Lim partnered with BeProfit to capture all profit opportunities, track all expenses, and grow his business. After joining BeProfit in March, BeProfit established an ongoing relationship with Lim and customized unique features to meet his business needs. The Goal Overall business growth, from the number of orders to profit margins. The Challenge Lim needed a simplified and all-in-one solution to track and manage his profits and expenses. In the ever-evolving eCommerce industry and in his business niches, Lim had to make data-driven decisions to stay competitive and profitable. So, he started looking for tools that could help him achieve better control of key metrics of his business. That's when he stumbled upon the BeProfit profit tracker app. The Solution BeProfit - Profit & Expense Tracking App The Results 21,000 monthly orders $12 Million annual GMV $1.4 Million annual gross profits 28% Growth from April to July Lim’s Favorite BeProfit features: Real-time tracking With this app, Lim can track his business data anywhere, anytime, on any desktop or mobile device. He can even collaborate with his staff in a shared workspace in real time. Perfect Automation No manual work! So, it saves Lim and his team a lot of time. Now, they can set their profit calculation preferences, create custom data reports, and build shipping profits, all in one place. Calculation of all shipping costs As he runs a number of stores, Lim can have his shipping, fees and other expenses pulled automatically from his online platforms. It allows Lim to get detailed, up-to-date reports on all shipping costs. Here’s what Lim has to say about BeProfit: “BeProfit has changed the way I calculate my COGS, shipping, and other expenses as it allows for perfect automation. Not losing money is as important as making money, and thanks to BeProfit, I am now able to track my net profit accurately. Additionally, they’ve been super helpful and customized features to suit my needs.”
Is Dropshipping Still Profitable in 2022 or Will You Lose Money?
BusinessIs Dropshipping Still Profitable in 2022 or Will You Lose Money?Dropshipping has emerged as one of the most popular business models for e-commerce store owners in the digital age. With a dropshipping strategy, business leaders list products from manufacturing partners on their websites. Whenever an order is placed, it’s automatically transferred to the dropshipping vendor, who deals with fulfilling the order. Dropshipping allows entrepreneurs to enter the e-commerce landscape without the common expenses and challenges associated with holding and shipping inventory. However, while dropshipping is great for improving the e-commerce order fulfillment process, it has its challenges too. As dropshipping apps and tools become more popular in 2022, it’s worth asking whether this model is still a profitable strategy for your business. Read on to find the answer to this and the challenges faced by potential dropshippers in 2022. The Challenges Faced by Dropshippers in 2022 Disrupted Supply Chains One of the most significant issues this year has been the disruption in supply chains and logistics around the world. A disruption in the dropshipping supply chain could leave customers waiting weeks or months for an order, which damages a brand’s reputation. Rising Customer Expectations Post-pandemic customers are less likely to settle for slow delivery times and unpredictable product quality. This means companies in the dropshipping industry need to work harder to find suppliers who can deliver products fast and provide consistently great items. Rising Competition Another major issue dropshippers have faced in 2022 is the struggle to differentiate themselves from other merchants. With various forms of Shopify, Wix, and Amazon dropshipping for beginners now available, the barrier to entry for this mode of selling is lower than ever. This means competition is rising, making it much harder for companies to find unique products to set themselves apart from the crowd. Additionally, you'll also have to compete with different shipping costs, product qualities, and e-commerce ads. Profitability of Dropshipping in 2022 Though dropshipping professionals have seen a number of challenges during 2022, this doesn’t mean the potential of the market has diminished. According to some studies, the dropshipping market is set to reach a value of over $621 million by 2028, growing at a rate of 20.7% CAGR. Since the pandemic, more customers have begun shopping almost exclusively online. By the end of 2022, e-commerce is set to account for around 20.4% of all global sales. Even as the impact of the pandemic damages the logistics and supply chain landscape, the opportunity for e-commerce sellers is growing astronomically. This means dropshipping professionals have plenty of chances to profit. Can Dropshippers Cope With the Challenges? Indeed, dropshipping companies may even be more suited to withstanding the complications of the problematic logistics environment than most. After all, with the best Shopify dropshipping apps and similar tools, business leaders can quickly and easily find new suppliers if their chosen vendor isn’t able to deliver the products they need. Interest in dropshipping is growing too. The number of people searching the word “dropshipping” has increased exponentially over the last couple of years. Plus, virtually every e-commerce site-building tool now comes with integrations and apps to make dropshipping easier. Despite the challenges, dropshipping companies aren’t just surviving in 2022; they’re thriving. Today, dropshipping and e-commerce sales are accelerating towards a value of $5.49 trillion, and they’re growing at a consistent rate of around 10.98% per year. Evolution of Dropshipping Best Practices Though it’s clear that dropshipping still has significant potential in 2022, companies do need to make sure they’re approaching this landscape carefully. The challenges of the evolving e-commerce environment have led to the adoption of new best practices, such as: Leveraging the right dropshipping tools Companies are investing extra time and effort into ensuring they have the right tools in place for dropshipping. This could include comparing Wix vs Shopify for dropshipping or exploring different apps in each e-commerce ecosystem to ensure you’re getting access to the right suppliers. Putting the customer first As customer expectations continue to rise, companies in the dropshipping environment need to make sure they’re prioritizing “CX”. This means implementing new strategies to deliver products faster and making sure the right policies are in place to respond to queries at scale.Increasing vendor relationships In an unpredictable logistics environment, it’s often a good idea to have multiple relationships with different vendors. Drosphippers are beginning to form connections with a wider selection of suppliers, so they can rest assured they’ll always have access to the inventory they need.Leveraging analytics To differentiate and stay one step ahead of the competition in the dropshipping world, companies need to keep a close eye on business insights. Brands are now using more tools to keep track of their most popular products and boost customer experiences.Brand marketing There are many different ways to market your brand, from advertising on Snapchat and Facebook, to using influencer marketing, and much more. Dropshipping Isn’t Dead Although dropshippers, like all e-commerce business leaders, have experienced some challenges in recent years, there’s still exceptional potential for growth in this environment. Companies capable of leveraging the dropshipping environment correctly can still make a fantastic profit in the years to come.
Simplest Way to Install and Use TikTok Pixel on Shopify
BusinessSimplest Way to Install and Use TikTok Pixel on ShopifyTikTok Pixel is a measurement tool that helps track the impact of your TikTok ads on your website. It allows you to see how many people clicked on your ad, how long they watched it, and where they clicked next. Using it, you can optimize your TikTok ad campaigns to ensure you're getting the most out of your investment. How to Install TikTok Pixel on Shopify To install TikTok Pixel, simply: Head to the Shopify app store and, using the search bar, search for TikTok Pixel.Select the app, and click "Add app" to install.Accept the integration by clicking "Add sales channel."Then select "Connect."To create a new pixel, click the "Create Pixel" button. To ensure the integration is successful, navigate to your TikTok Business account, hover over "Assets," and click on "Events." Once the page has loaded, you should be able to find your Shopify Pixel in the "Create Pixel" panel if the installation was successful. If you're yet to create a Shopify store, see our step-by-step guide on how to start a Shopify store. How Does TikTok Pixel Work? If you're running a website, you know that generating traffic is only part of the battle. You also need to determine how to measure and track the results of your advertising efforts. TikTok Pixel is one of the most effective ways to do this. Here's how it works: First, you add a small piece of code to your website that tracks all the traffic coming from TikTok. Then, when someone clicks on one of your ads, TikTok Pixel will record the click and report back on how many impressions and clicks your ad generated. This information can help you assess whether your current advertising strategy is working and make necessary adjustments. If you discover that your ads alone are insufficient in generating enough traffic and sales, you should consider a more omnichannel marketing strategy. As an example, you could utilize other social media platforms like advertising on Facebook or using Instagram to boost conversions. Can You Use Cookies With TikTok Pixel? Yes, cookies work with TikTok Pixel. This means that the tool can track users who visit multiple websites that use the tool, which increases its accuracy. As a result, advertisers may end up spending less money on ads that are targeted and effective. TikTok Pixel Events Supported on Shopify TikTok Pixel has a number of events that are supported by Shopify. These include: Add payment info The integrated TikTok Pixel app tracks visitors that add their payment information in the checkout flow. Add to cart When a visitor adds an item to the shopping cart, the TikTok Pixel app tracks this data. Complete payment TikTok will also report when a visitor makes a payment.Initiate checkout The app will record if a visitor is ready to make a purchase and is checking out. Search If a visitor performs a search, the app will record the search term. View content TikTok Pixel also tracks when a visitor views a previously nominated page. TikTok isn't the only application available on the Shopify app store that e-commerce merchants can use to track various metrics. Check out 40 more Shopify apps to increase profits here.
Dropshipping on Amazon for Beginners—All You Need to Know
BusinessDropshipping on Amazon for Beginners—All You Need to KnowAmazon dropshipping is a business model which involves e-commerce entrepreneurs selling products without having to carry any inventory, but instead using the services of Amazon for fulfillment. Let’s disclaim the above statement by stating that “Amazon dropshipping” isn’t, by definition, technically dropshipping. Yes, some Amazon merchants use the platform’s fulfillment services to fulfill customer orders. However, unlike the traditional dropshipping model where suppliers do not charge a fee for fulfillment (the cost is added to the price of the wholesale product), Amazon merchants that use the platform to deliver have to pay Amazon for customer order fulfillment. How Does Amazon Dropshipping Work? Just like the traditional dropshipping model, when a store owner receives an order from a customer, they simply contact the supplier (Amazon), who then ships the products directly to the customer’s door. The difference between Amazon and traditional dropshipping? Amazon dropshipping involves signing up for Fulfillment by Amazon (FBA) program and using these services to fulfill customer orders. FBA is a service offered by Amazon that allows sellers to store their products in Amazon's fulfillment centers, and Amazon will pick, pack, ship, and provide customer service for these products. Sellers who use FBA can set their own shipping rates, track their inventory, and access Amazon's customer service. You can think of FBA as a just-in-time (JIT) supply model. A JIT supply model is a system in which suppliers produce just enough inventory to meet current customer demand. This system relies on frequent and accurate forecasts of customer demand in order to ensure that the correct amount of inventory is produced. It also relies on quick and efficient distribution channels so that the right products are delivered to the right customers at the right time. Cost of Dropshipping on Amazon The cost of dropshipping on Amazon varies depending on the scale and breadth of your business operations. Essentially, there are two payment plans that Amazon charges merchants for their FBA services. The first is a flat fee of $0.99/item sold + additional shipping fees. This is used for merchants that are selling 40 items or fewer per month. The second costs $39.99/month + additional shipping fees. The additional shipping fees vary depending on the weight, size, and destination of a package. For a full breakdown of these fees, see Amazon’s FBA fulfillment fee guide. So is using FBA affordable? Again, that depends on the circumstance. For instance, if an online business is renting a third-party warehouse in an expensive area, shipping costs are high, and inventory management fees are added on top; thus, the cost (and hassle-free services) of FBA starts to look rather attractive. Although, if an online business is relatively small, localized, or a merchant is happy to take on fulfillment with flat-rate shipping to save costs, FBA services can start to seem a little less attractive. To really hone in on the costs of operations compared to profit margins, see our guide on the best profit calculators for Amazon. Additionally, this is only one way of selling products on Amazon. Read our guide on Amazon FBA vs FBM to learn more. Pros and Cons of Dropshipping on Amazon We’ve touched on the downside of fees and the upside of convenience, but there are other pros and cons that online merchants should take into consideration when choosing whether to use Amazon as a dropshipping option. Pros Increased sales and visibility One of the biggest benefits of using FBA is the increase in sales and visibility you'll enjoy. When customers search for products on Amazon, they are more likely to find your items if they are sold through FBA than if they are sold through a third-party seller.Prime members love FBA Prime members love buying products that are sold through FBA because it means that they can get free two-day shipping on those items.Increased customer satisfaction Since Amazon is known for its excellent customer service, using its fulfillment services can help increase customer satisfaction rates for your products. Cons Some products are competitive One downside of using FBA is that your products may be less visible to shoppers on Amazon since they are competing with larger brands that are well established in the marketplace.Business operations are dictated by Amazon Another downside is that Amazon has a lot of rules and regulations that sellers must follow. If you don’t comply, your account could be shut down. To bypass the competition, learn how to promote your Amazon products on the marketplace successfully. Something else that might interest you: our guide on Shopify vs Amazon to help you decide whether this is the right platform for you.
Amazon FBM vs. FBA: Which Is Better for Your E-Commerce Business?
BusinessAmazon FBM vs. FBA: Which Is Better for Your E-Commerce Business?No matter what type of e-commerce business you run, there’s potentially no better way to reach an endless amount of potential customers than with Amazon. Amazon is the most visited e-commerce website in the world, and it's no secret that shoppers prefer to buy items there. In fact, nearly half of all online shoppers start their product searches on the platform. But should you be using Amazon FBM or FBA for your business? Read on to find the answer. How Fulfillment by Merchant Works When customers order items from Amazon.com, they have the option to choose "Fulfillment by Merchant" (FBM) as their shipping method. FBM orders are fulfilled by the seller of the product, rather than Amazon. This option is available for products that are sold by third-party merchants on Amazon. The biggest benefit of choosing FBM is that the seller is able to control the entire fulfillment process, from packing and shipping, to the method of calculating shipping costs, to customer service. Sellers also have the ability to customize their shipping and handling options and can choose to include a note or gift message with each order. Since sellers are responsible for fulfilling FBM orders, they must maintain an inventory of products and be prepared to ship orders within one business day. Sellers also need to be familiar with Amazon's policies and procedures for fulfilling orders, including shipping requirements and restrictions. How Fulfillment by Amazon Works If you are an Amazon merchant, you have the option to use "Fulfillment by Amazon" (FBA), which allows you to store your products in Amazon's fulfillment centers and let them handle shipping. Here is how FBA works: Either you or your suppliers send products to an Amazon fulfillment center.When a customer orders one of your products, Amazon ships it from the fulfillment center closest to the customer. Costs of Selling With Amazon FBA vs. FBM FBA The cost of selling through Amazon's FBA (Fulfillment by Amazon) service can be expensive for small businesses. For example, businesses are charged a monthly fee for storage space—$0.75 per cubic foot and up to $2.40 per cubic foot through the holiday months—and they are also charged a fee for each item that is shipped through the FBA program. In addition, businesses must pay Amazon's commission on each sale which can be as high as 15% of the sale price. Therefore, it is important for businesses to calculate these costs carefully before deciding whether or not to use the FBA program. Amazon also charges $39 per month to access their warehouses and order fulfillment services. FBM On the other hand, Amazon charges anywhere between $0 to $39 for merchants using their FMB services. The $39 is only applicable to those merchants that opt into Amazon’s Pro FBM service, which is completely optional. Of course, merchants that choose to use FMB will need to cover their own shipping, storage, and handling costs. But, depending on the size and scale of the operation, these are potentially more affordable than the FBA services that Amazon provides. Talking about costs, check out the best Amazon profit calculators here. Pros & Cons of Amazon FBM Pros When you use Amazon FBM, you can potentially take advantage of their lower costs. This can help keep your expenses down and improve your profit margins. More control over your customer’s orders and the ability to provide better customer service.By using Amazon FBM, businesses can take advantage of Amazon's world-class marketplace while controlling the logistical side of the business. Cons Using FBM requires managing your own inventory and shipping. This can be a lot of work, especially if you are not used to it, which is why many e-commerce sellers choose flat-rate shipping. You have to package and ship the items yourself, which takes time and effort. You need to have a good understanding of Amazon's requirements in order to make sure your products are compatible with their system. If you do not meet their requirements, your products may not be eligible for Prime shipping or may be removed from Amazon altogether. Interested in some further reading? Learn the difference between digital marketing and e-commerce here. Pros & Cons of Amazon FBA Pros Amazon FBA can help you take your business to new heights by making it easier for customers to find and buy your products.FBA can save you time and money on shipping.FBA can increase your sales because Prime members receive free two-day shipping on eligible items. Cons One of the biggest cons of Amazon FBA is the cost. When you send your products to Amazon, you have to pay for shipping and storage costs.You have to give up a lot of control. With FBA, you're handing over your products and your brand to Amazon. Amazon has been known to be less than stellar when it comes to customer service. If something goes wrong with one of your customer’s orders, or even if you just have a question, you may not get a response from them in a timely manner. If profits are on your mind, learn what profit margins are considered high here. Which Is Better: FBM or FBA? This depends on the size, scale, and budget of your online business. If you have the patience to package orders, ship them out, and handle customer service, FBM is the choice for you—so long as you ensure that you have an efficient and effective e-commerce order fulfillment process. However, if you’d like to use the convenience of not having to deal with shipping, handling, and dealing with customers, FBA is your number one choice. If you’re still not sure in which direction to head, maybe calculating costs will help. Do so by checking out how to calculate profit on Amazon FBA here. Alternatively, if you're still unsure about the platform you wish to use, take a look at our guide to Shopify vs. Amazon.
How to Improve Your E-Commerce Order Fulfillment Process
BusinessHow to Improve Your E-Commerce Order Fulfillment ProcessE-commerce order fulfillment is the process by which a customer's order is filled and delivered. This can include ordering and shipping merchandise, as well as handling returns and refunds. To ensure that orders are fulfilled quickly and efficiently, e-commerce businesses often use automated systems and warehouses. Improving your e-commerce order fulfillment process is essential to having a great business. Read on to learn how to achieve this. Steps in the E-Commerce Order Fulfillment Process The e-commerce order fulfillment process can seem complicated and daunting, but it doesn't have to be. Here are the steps you need to take to ensure a smooth and successful transaction: Receive the order from the customerCheck that the order is complete and correctProcess the paymentShip the order to the customer's addressConfirm that the order has been delivered successfully Improving Your Fulfillment Process For sure. In fact, there are many steps in the e-commerce order fulfillment process that can be improved: Package protection Often, e-commerce companies will just throw products into a box without any thought of protecting them. This can lead to products being damaged in transit, which can cause customer service issues.Update couriers Many e-commerce companies still rely on outdated shipping methods, such as FedEx and UPS. These companies often charge high rates and do not offer tracking information for packages., potentially leading to lost or delayed packages, which can cause customer service issues.Allow customers to track packages Many e-commerce companies do not provide customers with enough information about their orders. This can lead to customer service issues once clients have to contact you in order to access information that should be readily available. Another factor that you could improve about your e-commerce store is monitoring your ROAS. Learn what a good ROAS for e-commerce is here. Importance of Order Fulfillment for E-Commerce When it comes to e-commerce, order fulfillment is one of the most important aspects of a successful business. In order for customers to be satisfied with their purchase, they, of course, wish to receive their order timeously and in good condition. There are a few key things that you can do to ensure that your order fulfillment process is as smooth as possible. First, make sure that you have a good tracking system in place to ensure that you know exactly where each order is in the process so that you can resolve any issues that arrive as fast as possible. You should also have a solid plan for shipping orders. You need to make sure that you have enough stock on hand to meet the demand, and that you are shipping orders out as quickly as possible. If you can't ship an order within a 24-48 hours time period, it’s best practice to let the customer know when they make their order. Struggling to figure out what to charge for shipping? Read our post on calculating shipping costs for e-commerce and our guide to flat-rate shipping. Types of E-Commerce Order Fulfillment There are three types of e-commerce order fulfillment: In-house fulfillment This is when a company completes the order from its place of business, which may increase your profit margin as you don't have to pay for external warehousing or branding. Dropshipping This is when an e-commerce company sends customer orders to a supplier who then ships the product to the customer from the dropshipping company’s own warehouse. If this is your chosen business model, be sure to take a look at the best dropshipping apps.3PL Third-party logistics, or 3PL, is when a company uses a third party to complete an order. So, Which Fulfillment Technique Is Best? Well, each type of order fulfillment has its own benefits and drawbacks that may or may not suit an e-commerce business depending on factors like budget, location, or staff availability. To give you a rough idea, in-house fulfillment is best for companies that want control over the entire process, from ordering to shipping. Dropshipping is good for companies that want to outsource shipping and do not have the time or resources to handle it in-house. 3PL is best for companies that require help to fulfill large orders or need access to specialized shipping and handling equipment. How to Determine Your E-Commerce Order Fulfillment Strategy By taking the time to evaluate your options and make a decision that best suits your business, you can ensure that your customers receive the best possible experience. If possible, consider using a fulfillment center to help manage your shipping and order processing. They can take care of everything for you, from packing and shipping to customer service and returns. If you're just starting your Shopify store, then you should know that there are many dropshipping fulfillment centers available directly from the Shopify app store that can free up your time to focus on other aspects of your business. Want to learn more about e-commerce? Start with either this guide on the advantages and disadvantages of e-commerce or check out this post on the different types of e-commerce business models.