MULTICHANNEL
Tere can be many hidden costs related to online business that retailers must be aware of. For instance, when physical stores get replenished, the warehouse cost is usually included in the cost of goods (applied as an oncost for the retail outlet), but when picked individually to fulfil a customer order, the warehousing cost of an item goes up substantially and often may not attributed directly to the orders.
Similarly, online returns - which can be as high as 40 per cnet of online sales - can also pose further challenges for the retailer. Meanwhile, unlike brick- and-mortar stores, where staff can engage directly with customers, online requires a separate customer care team - yet another cost to consider.
And of course, there are the external costs of delivery too, where retailers have seen delays and increasing costs due to the pressure that transport and delivery providers have faced during the pandemic.
homeofdirectcommerce.com | Direct Commerce
WHY IT’S TIME TO CHECK THE NUMBERS While speed of response and agility have been heralded over the last 18 months, the pandemic denied retailers the opportunity for careful planning, which meant that some retailers went into eCommerce without really thinking it through. Tis means that as long as they operate this part of their business with limited understanding, the hidden costs will continue to surface and bite, driving down margins and profits as a result.
Given that by now most retailers have settled into a new ‘normal’, it’s essential that they take the time to look more closely at their businesses, fully examine their real costs across all channels and ensure everything is accounted for – particularly online.
Only once they have done that can they pat themselves on the back and say that they made eCommerce a success, both during the pandemic and after.
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