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How Clever Cost Cutting Can Supercharge E-commerce Growth



E-commerce is all at once a rapidly expanding industry and one that is growing increasingly competitive. No matter your level of success, there is also someone making their way to the top and there is always someone a few steps ahead of you, hoping to grab your market share should you lose it for any reason. This necessitates constant planning and innovation on your part should you wish to grow in the future.

While new ideas, product lines, and staff expansions can be necessary and great investments at times, sometimes leaner is better. And regular cost assessments and corresponding cost-cutting measures can make the difference between a floundering business and one that sees record profits.

Here are a few reasons why well-considered cost-saving measures might be just what your e-commerce business needs to restart its engines:

You Can Reinvest Your Savings

A simple concept that you have likely already considered, but by cutting costs you can reinvest the savings elsewhere, ensuring that your business can focus more on the tasks and products that are succeeding.

And there are often opportunity costs you might not consider. For example, if you cut an underperforming or even unprofitable product, you can reassign the associated storage space, manufacturing or supply resources (depending on your business model), and logistical energies into the product lines that are working, allowing you to be more confident in your marketing of it.

As an action item right now, simply write down what you would recoup if you were to cut (or commit to no reorders of) at this very moment your worst performing product.

Reducing Costs Doesn’t Necessarily Mean Reducing Value

The ideal situation is that you reduce the cost of your product (either making it or obtaining it for retail) while maintaining the same level of quality your products always have. And in a market where large retailers can always undercut you, having a great brand reputation is an absolute necessity.

For example, a company that makes and sells silverware, and is growing in sales, can cut costs by negotiating with its manufacturers. Furthermore, if your company is willing to do something like hire a specialist negotiator in the region which has relationships with the manufacturers, then that investment can lead to long-term savings.  

Cuts Can Inspire Creativity

Unless they otherwise have an incentive not to, your employees (and yourself to a degree) are generally going to follow the status quo. It’s simply human nature. Yet your employees also probably know where cuts can occur if need be, and by making cuts in the right areas (make sure you don’t cut staff, pay, or things related to essential functions without heavily thinking about it), you will be able to inspire them to think of automated or simplified solutions, often with few downsides.

You want to be able to have a creative culture in your business, however small it might be. If it’s a one-person operation, you want to give yourself permission to at once try bold ideas and let ideas fail. Whatever this means for your business, new ideas and careful experimentation are what will keep your e-commerce business relevant.

It Will Help You Stay Focused on the Most Important Tasks

If you aren’t afraid to cut costs when they’re necessary, you’ll pay more attention to what is working, allowing you to shift resources and attention more easily. This adaptability might be what you need to succeed in the space.

Focus is key in the e-commerce space. By cutting costs, you’ll also likely trim the programs and the products that aren’t performing the best. Luxy Hair, for example, found success by only carrying a small number of products. By taking up that mentality, you are committing to efficiency whether you are aware of it or not. The 80/20 principle can apply to your business as well. Lean into it.

It Will Force Your Business to Look into Updated Solutions

As mentioned before, you have to make change happen in your e-commerce business. Your service providers aren’t going to let you know that there’s a cheaper and easier solution for your problem that just came on the market. Setting cost-cutting goals will give your team a reason to find apps, programs, bots, and other solutions that automate the mindless work for your team, saving hours of time and potentially other resources as well.

This could come in the form of automating marketing. It might mean downsizing (office and storage costs can easily become your biggest expense) and considering the use of remote work more. There will always be a newer solution, and while not all of them will help your business, keeping an eye out to keep costs low can only help your business.


What might be the most effective strategy for your e-commerce business might not be the same as everyone else, but what it universal to all businesses is that clever thinking and a commitment to efficient planning can take a business to the next level.

Consider what you are doing right now, and more specifically what you don’t need to be doing right now (but is happening anyway). With the right decisions, you will come out even stronger over the next year.

Are there any other examples or ideas you would like to share on this topic? What costs do you think you can cut from your e-commerce business? Please leave a comment below and share with us your thoughts, as we would love to hear them.

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