Cutting Costs in Retail: Eight Tips for Your Store
Wed Sep 21 2022
Coffee & cornetto
Inflation and High Costs? Discover How to Reduce your Store Expenses in Eight Simple Steps
In the historical moment we’re living (hey inflation!), cost cutting has become a priority. As independent retailers and small business owners, you’re faced with the challenge of cutting your business costs without compromising on the quality of your service and product. Cost-saving measures are vital for maximizing your business profitability and they require a mix of easy and not-so-easy decisions, which involve not only cost cutting but also optimizing what you’re already spending.
With some effort and creativity, your retail store can get prepared to face the challenging times ahead in the best possible way. To help you out, here are eight tips for cutting costs in retail and reducing your store expenses.
Pay Attention to Your Bills Costs
Just like you’re probably doing with your household bills, think about how you can lower your store utility expenses. Every little thing can make a difference at the end of the month. Here are some cost reduction examples:
Have a look at all your subscriptions, whether for internet, phone, or utilities: can you find better deals? Are there any promotions dedicated to small businesses?
Turn the heating down of 1 grade and consider using it for 1 hour less per day: you can save up to 180$ per year.
Swap ordinary light bulbs with energy-efficient LED bulbs: they consume 85% less!
Remove all electrical devices from plugs when you’re not using them: this needs practice and a little daily effort, but it will be worth it.
There’s no doubt printing is a cost for retailers. Dollars spent on paper, ink, and mailing supplies seem irrelevant on a daily basis, but they can add up to huge expenses. That’s why going paperless should definitely be part of your cost-cutting strategies.
Start from the obvious: email receipts to your customers and stop printing them out. This will allow you to save money while also collecting important info on your clients and doing some good to the planet.
Another aspect to consider is printed advertisement: ditch old flyers and in-store banners for their smarter digital versions, using QR codes to deliver your customer an even better experience but at minimal costs. Don’t forget to go paperless also when it comes to your internal management procedures: relying on digital tools to manage your inventory or orders can help you save money on printed checklists and spreadsheets. This is one of the Mirta benefits you can enjoy when buying wholesale on our platform.
Rent Your Retail Space
Rent is probably the heaviest fixed cost in your yearly budget— renting out your retail space could be a smart way to maximize what you’re already paying for.
Among your business cost-saving ideas, consider making your entire store or parts of it available for events and meetings. Depending on your store size, you can take advantage of the days and hours when your store is closed, or dedicate a special section of the space to external meetings even during work hours. Hosting events in your space could also be a great way to partner up with in-target brands that can bring more exposure to your business.
Another idea to save up on rent is to rent out a portion of your retail space to another brand or retailer during specific moments of the year, such as the festive period. You can offer them a space where they can display and sell their products, while you’re getting savings and synergies in return.
Open an Online Store
If you don’t have it already, consider opening up an online store to support your brick-and-mortar business. One option should not exclude the other, so look at in-store and online as two coexisting experiences.
By merging offline and online, you can both reduce costs and increase sales at the same time. Here are some benefits:
Reduce operating costs and save space in the physical store
Have a greater catalog available for your customers
Reach more people and increase sales potential
Remain open 24/7, selling even during your store’s closing hours
Optimize Shipping Costs and Packaging Costs
Shipping costs are hard to cut down but can be optimized to be more efficient. Here are some ideas to reduce costs when delivering your products to your customers, whether that’s from your store's physical location or a separated warehouse:
Offer in-store pick-up: that’s a convenient option for anyone living in the area and a choice that will bring you zero cost.
Choose eco-friendly packaging: as much as colorful and solid packages can be more elegant or fun, consider switching to minimal and more sustainable boxes. Natural cardboard is cheaper and can be recycled more easily— a choice that your conscious customers will appreciate.
Reduce packaging sizes: cutting delivery costs also means analyzing your size options. Try to reduce your box sizes to save up on both single and multiple deliveries.
Negotiate With Suppliers
As any small business owner, you surely have longstanding deals with suppliers— from delivery couriers and insurance providers to the brands you’re selling. Try to negotiate better deals that can help you in cutting costs without compromising your business relationships. Can you order more products in bulk, for example? Or can you buy from all your favorite brands on one single platform? Buying wholesale on Mirta can help your store deal with just one main supplier, with an important cost reduction, finding anything you need in one place: from womenswear to bags, menswear to home decor.
Improve Your Inventory Management
When owning a store, your business cost reduction must pass also through your inventory management. That’s what allows you to have products to sell and be in the business you chose, so it has to be optimized at the very best, cutting unnecessary costs.
Your final goal is to reduce at minimum the costs of holding inventory that is not selling, while of course always having stock available for your customers. If a product has been sitting in your storehouse for months it’s a cost, and you need to reduce it.
To have more efficient processes of order fulfillment or inventory management, you can outsource these responsibilities, freeing your staff from time-consuming tasks.
Reduce Operational Hours
An always-open store can potentially sell something to everyone at any moment, but at what costs? Whenever your store is open, there’s money being spent on heating, lighting, staff and so on— choosing your business hours is extremely important.
Consider the location of your store and the habits of the locals, and don’t be afraid to experiment with odd hours if you think they can work for you best.
When reducing operational hours, having an online store becomes even more vital for sustaining the in-store business.
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