With the national elections looming, South Africa is experiencing a longer period of political and economic uncertainty than usual, as the country undergoes a prolonged downward cycle. This has consequently placed local SMEs in a state of uncertainty too, with many small businesses unsure of what the future holds.
This need not necessarily be the case, however, with those operating specifically in the ecommerce space uniquely positioned to weather this storm, provided they take the right steps.
As for what those steps are, Brendon Williamson, CSO at DPO PayGate, illuminates some of the measures that SMEs can take.
Step by Step
Williamson has highlighted seven steps in particular, starting with proper stock management. He explains that it’s one of the neglected an unseen aspects of running a business, with the improper management thereof being a potential cash drain on the business.
“Look into a drop-shipping alternative and use this time to thoroughly assess which products are in demand and which can be dropped from your catalogues,” advises Williamson.
“Opting for simple inventory management technology can also greatly assist in building a just-in-time delivery strategy,” he adds.
Next comes a look at the sales chain, and in particular transport and delivery options.
As this aspect is often the one that customers ultimately end up judging your business’ service by, it’s always a good idea to look around for better or more cost-effective options, says Williamson.
“Remember, these companies are also working hard to stay competitive in a tightening economy and they should be coming up with new and innovative offerings,” he notes.
Another element that Williamson touches on is diversification, which is often a route businesses explore when they are under pressure. Instead of looking to widen the revenue stream, the DPO PayGate exec says businesses should remained focused on the core elements of their organisation.
Veering too far from what your company specialises simply for the sake of it is a poor business practice, warns Williamson.
The next step seems t fly in the face of the advice previously given, but Williamson says looking for non-competitive offerings which complement your own is always a smart thing to do.
To that end he says partnering up with another brand that has a complimentary offering could prove quite successful. “Joint marketing, delivery and promotional campaigns could halve costs and help you reach new customers too,” he adds.
One other element that businesses need to look at is customer retention, which has never been more important than it currently is, according to Williamson.
“Every organisation chases new business, but many make the mistake of doing this at the expense of their loyal, existing customers,” he points out.
When a business finds itself in tough economic climates, it’s the regular customers that it should pay more attention to, instead of looking for other customers, who do not offer much in terms of certainty.
Speaking of tightening purse strings, Williamson says culling the marketing budget is not the best idea. “Allowing your marketing budget to be the first causality of a recession could do you lasting harm,” he warns.
“Working with a digital marketing expert can help your business access existing and new customers in a much more effective and cost-efficient manner,” adds the CSO.
The final step has to deal with the payment platform, which when you’re an ecommerce SME is vital.
“After all the work you have put into creating the perfect offering, ensuring people know about your service or product, and ensuring you have operations running optimally, it seems silly to lose a sale at the checkout page,” says Williamson.
“Too many small businesses assume adding new payment options to their existing bouquet is expensive and difficult. Find a payment service provider that will work with you to offer as many as possible with the least amount of implementation pain,” he concludes.[Image – CC 0 Pixabay]