How to Crush 8 Common E-Commerce Business Problems with Automation

There’s a common misconception that small businesses are agile and can quickly adapt to market changes.

While this is partially true, e-commerce businesses have many moving parts that can sometimes be challenging and expensive to stay on top of. This is why e-commerce companies need software solutions they can depend on.

Many of these businesses believe that they are too small to implement automation technology. The thinking is that only large companies have the resources to deploy such technologies, and the ROI simply isn’t there for smaller businesses.

This couldn’t be further from the truth, as we will soon see how many different types of automation can be used to significantly improve the efficiency, profitability, and growth of a small e-commerce company.

Let’s look at eight common problems that e-commerce businesses face and how automation tools can solve them.

 

1) NOT ENOUGH (OR TOO MUCH) INVENTORY

In the world of online retail, cash flow is highly dependent on having a solid handle on your inventory.

As an e-commerce business owner, one of your primary goals is to convert site visitors into customers. A significant portion of your monthly overhead goes into the sales and marketing funnels that generate sales.

If one (or more) of these sales can’t be processed because you are out of stock, there is a huge loss of potential revenue. Not only do you lose a sale, but the disappointed visitor is less likely to return to your site.

On the other side of this coin is the problem of excess stock. For each item that you’re not moving, you’re tying up capital that could be used to make other stock purchases or to invest in marketing channels.

Storage cost is also a matter of concern for e-commerce businesses that are not managing their inventory smartly.

The solution is to implement an automated inventory management tool.

These tools will help you manage inventory on an integrated platform across several channels, including web stores, retail partners, marketplaces, and physical retailers.

The auto-replenishment functionality can automatically reorder products based on the number of sales or pre-defined rules.

In many cases, these tools can also automate the process of projecting your inventory needs to limit the risk of stock-outs and excess stock.

 

2) INACCURATE METRICS THAT TAKE TOO LONG TO COMPILE

In the world of digital business, it’s vital to base every decision on data.

Having the right information at the right time makes it possible for business owners and marketers to make accurate, well-informed strategic and operational decisions.

Inaccurate metrics can lead to poor financial choices, meaning that you could be wasting valuable resources, not taking advantage of the right opportunities, and risking bankruptcy.

Frequently, the problem with building the metrics necessary to drive smart business decisions is that the data underpinning them is sitting in a host of disparate app databases.

This means that business owners often have to manually extract data from their various sales, CRM, marketing, customer support, fulfillment, and bookkeeping tools if they want a unified view of their business data.

This is a difficult, time-consuming, and often expensive process that can result in inaccurate or delayed reporting.

The solution to this problem is to automate this entire undertaking using a data warehousing product. These tools allow you to connect all your data sources and build a reporting layer over the resultant unified data sets.

These solutions also allow you to create custom dashboards that show key business metrics in real-time, making it possible for decision-makers to evaluate your performance quickly and take action where necessary, regardless of where reference data is stored.

 

3) EFFORT AND COST OF BUYING AND MANAGING AMAZON ADS

Many online retailers choose to sell on Amazon in addition to their own sites.

The benefit of doing so is obvious. Amazon provides a powerful platform on which sellers can reach millions of buyers, but because it’s a third-party marketplace, there are additional costs when selling on Amazon versus your own e-commerce site.

For new sellers who are still struggling with organic visibility, generating traffic through Amazon PPC ad campaigns is essential. Unfortunately, the reality of managing these ads can sometimes be prohibitive.

The time, effort, and expertise necessary to manually manage numerous advertising campaigns make this option a risky one for start-ups and small businesses.

The solution is to automate parts of this process using a tool that can help you set bids, manage ad groups, and target keywords automatically. These tools also make it easy for sellers to check their ads in real-time so that they can optimize them accordingly.

The most reputable of these tools offer features that massively reduce your advertising cost of sale (ACOS) and greatly increase your chances of running successful PPC campaigns on Amazon.

 

4) SLOW RESPONSE TIMES WITH AMAZON REPRICING

Repricing on Amazon isn’t a luxury. It’s a fact of selling on the world’s most competitive platform that quicker responses to changes in the marketplace result in more sales.

Intelligent, instantaneous pricing adjustments are critical to maintaining profitability and winning the buy box.

But repricing is a time- and resource-intensive process. Business owners who choose to do it manually are taking a big risk. Your competitors’ pricing strategies and other market factors can change at any time, and even the most eagle-eyed business owner is unlikely to notice if their repricing strategy needs a tweak.

On top of this, the overall effort needed to manually reprice your products increases drastically as your inventory grows. And so does the likelihood of making capturing errors.

For these reasons, many sellers choose to automate this process by using an automated repricing tool. These tools offer several features that can help you adjust your prices in real-time so that you are as competitive and profitable as possible.

Some of the more reputable repricing products even make use of machine learning to automatically improve your repricing strategies over time.

 

5) COST OF PROVIDING 24/7 CUSTOMER SERVICE

Your prospective customers have questions. So do your existing customers who are awaiting delivery of their goods.

If you want to keep both of these groups of people happy, you need to put people, processes, or technology in place that can respond intelligently to support queries.

Losing sales because you’re not able to answer simple questions via a support channel is e-commerce suicide. The problem is that handling support requests in real-time on an e-commerce site can be extremely taxing.

You need to have an infrastructure robust enough to handle the load, but you also need staff with a deep understanding of your products and processes.

The solution is to make use of customer support automation tools. These tools come in different shapes and sizes. Most integrate with popular e-commerce platforms to receive incoming messages via email, live chat, or social media.

Some can even automatically diagnose your customers’ issues by reading the contents of their tickets before sending them on to a human agent for further assistance.

Whether you choose to offer customer support via a chat facility on your website, direct messaging on your social media accounts, or plain old email, there’s an automated support solution that can help.

 

6) COST AND ACCURACY OF KEEPING YOUR BOOKS MANUALLY

Take a moment to estimate how much time you spend preparing your business’ books each month. Ask the following questions:

  • How many hours do you think this process takes?
  • How do you feel about the accuracy of those numbers?
  • How confident are you that what you’re entering into your accounting system is accurate and timely?
  • How often do you make mistakes when adding transactions or reconciling accounts?

If you’re like most business owners, the thought of keeping your books manually brings on a feeling of dread. That’s why many e-commerce businesses have started to automate this process by using accounting software designed specifically for small businesses.

These tools offer all of the features that you need to remain compliant, manage multiple businesses, and crunch numbers in an efficient manner.

Some products even let you link your online accounting software with your e-commerce platform so that transactions are automatically added to your books upon their completion.

That means you don’t have to manually enter the information, and you’re guaranteed that your accounting reports are 100% accurate.

The range of features that the most reputable bookkeeping tools offer is truly staggering. There’s no e-commerce business in the world that won’t benefit from the increase in efficiency and accuracy they enable.

 

7) LOW CUSTOMER LIFETIME VALUE

E-commerce businesses thrive not only on converting visitors into new customers but also on increasing the lifetime value of their existing client base.

Unfortunately, it’s quite common for e-commerce businesses to focus disproportionately on creating new customers and then fail at engaging with that client in an attempt to increase their lifetime value.

The result? A customer who may have repeatedly purchased your products in the past switches to purchasing from one of your competitors.

Loyalty is hard to come by in the e-commerce world. If you don’t actively seek to build a relationship with your customers, they will switch to a brand that will.

Email marketing is one of the most effective ways to stay in touch with your customers and build loyalty through personalization. But without the right tools, it’s a painful process that will cost you both time and money.

Email marketing automation software is absolutely essential if you want to stay in touch with your customers without spending a fortune on staff and email blasts.

These tools will help you to create listings of segments of contacts who meet certain criteria, target them with customized campaigns that are relevant to their interests, and measure the impact of those emails on new sales.

They enable you to create and send hundreds of customized emails with minimal staff time. That means your e-commerce business can reach a much larger audience and drive repeat sales at a very affordable cost.

 

8) EFFORT AND COST OF MANUAL SHIPPING MANAGEMENT

Effective, affordable, and reliable fulfillment plays an enormous role in running a successful e-commerce business. The speed at which your customers get their purchases directly impacts your store’s reputation.

A delay in shipping – no matter how small – can be enough to push customers away from your store and toward one of your competitors.

A massive error like overlooking an order or shipping the incorrect item can result in a crippling blow to your reputation.

To avoid these scenarios, you need to ensure that your fulfillment process is as effective and efficient as possible.

But most e-commerce businesses don’t have a dedicated staff member to take care of this critical aspect of their business. And even if they did, humans are prone to making errors.

Automated shipping software allows e-commerce businesses to process and send out large numbers of orders quickly and cost-effectively.

Tools like this will help you streamline your business processes so that you spend less time and money on fulfillment without sacrificing quality control.

 

IN CLOSING

Automation is everywhere.

There’s no industry on the planet that’s not benefitting from the vast number of innovative products that help business owners to get more efficient while decreasing the likelihood of human error.

E-commerce is no different. The amount of moving parts involved in running a successful online retail business makes automation essential. It’s also doubly important in this space because many e-commerce businesses are staffed by a skeleton crew and don’t have the budget to bring more people on board.

At the same time, these businesses operate on razor-thin margins and simply can’t afford the fallout of missed sales opportunities or reputational damage.

Automation is not a cure-all, but it can make a huge difference for e-commerce businesses of all sizes. It will help you operate faster and more efficiently while preventing costly mistakes from happening in every area of the company.

Techvera icon

Written by Travis Jamison

August 15, 2021

You May Also Like…