Savvy sellers know that taking a little time to review regular business expenses can help create opportunities for long-term saving. Here are 5 tips to help you minimize expenses and maximize profits.
If you’re not in the habit of tracking expenses, that’s okay. Take some time to sit down and make a list of your recurring expenses—if you don’t know what they are, create a spreadsheet for tracking. Or better yet, start inputting your expenses using a piece of accounting software designed for small businesses. Here are a few ideas. Then, identify your most expensive expenses on the list, as well as any that are higher than expectations. This will help you prioritize which ones to tackle first and give you a space to record your results.
Tip #1: Cut the (telephone) cord.
If you currently use a landline for your business, consider switching to a free VoIP (Voice over Internet Protocol) solution such as Google Voice. Some VoIP services such as RingCentral or Vonage do have monthly costs, but can be lower than those for regular landlines. Learn more about VoIP providers.
Your cell phone bill is another expense to investigate. Why pay more than you need to? Take a look at your monthly texts and minutes, and evaluate whether you’re spending too much. You might be able to downgrade your plan or, if push comes to shove, switch carriers. Learn more about negotiating your cell phone bill.
If you have cable, it’s also worth noting that you can usually renegotiate your rates after your initial discounted rate has expired. It’s a bit of process, but it can result in considerable cuts to your monthly bill. You can even hire people do the negotiating for you (for a fee, of course). Learn more about bargaining your bill down.
Tip #2: Pay less for shipping supplies. (Or not at all.)
Boxes. Bubble wrap. Packing tape. Supplies can get expensive, all sellers know that. What are you currently spending on them? How often do you have to shop? Here are a few ideas to reduce your spend.
Look over the fence
It’s spring and people have decluttering on the mind, which means they’re often willing to give away boxes and packing supplies for free. Take a page from eBay seller, Katrina Rivette, of KShae's Kloset, and use social media to ask people in your neighborhood for supplies:
“I made an "in search of" Facebook post on my personal profile and in our local neighborhood Facebook group, asking friends and neighbors to please not toss air pillows and bubble wrap, but if they were to put aside, I'd gladly come take the supplies off their hands to reuse and recycle! Within one week, I filled up my entire backseat and trunk 6x and in the process, made a few new connections!”
Nextdoor and Craigslist can also help you source free (or cheap) supplies, as can local businesses. Just remember, when you’re on the hunt for supplies, only use boxes that are clean, unmarked, and in great condition.
Buy in bulk
Obvious, but still worth mentioning. If you have the flexibility in your budget to shop for bulk supplies at a discount, do it. You can save money in the long run and reduce unnecessary trips to the store (if you’re in the habit of shopping brick and mortar).
Tip #3: Find your perfect storage size.
Are you currently renting warehouse or storage space for your business? It can be easy to pay for more space than you need. Take a moment to evaluate whether you are using the space in the smartest way possible.
For example, are you keeping your fast-selling (or high-velocity) inventory in the most accessible place? Is your inventory stored efficiently (i.e. do you have products in boxes or containers that are too big for them)? If you have extra storage space, could you save money by sharing with another seller?
By right-sizing your space, you might be able to trim costs spent on things like heating and cooling as well as extra space you don’t need.
Tip #4: Combine errands to save time and gas.
How often do you leave the house to run an errand? How often do you buy groceries, pick up or drop off your kids, ship packages, etc.? Think about optimizing your schedule to save time and money.
Here are a few steps to get you started:
Tip #5: Upgrade to a Store.
Depending on how many items you sell, upgrading to a Store subscription can help you save on monthly expenses.
Stores offer a number of zero insertion fee listings and lower final value fees which vary across a few tiers. Store subscriptions are not free, but your tier can pay for itself based on how many items you sell.
Learn more about Stores here.
Bonus Tip: Don’t skip on insurance.
When reviewing your business expenses, you might also want to look at your insurance. We always advise sellers to have an insurance policy that covers their personal and business possessions. Make sure your inventory is protected, especially if you sell from your home.
We hope these tips provide a starting point to tightening up your recurring business expenses. Of course, there are many other ways to be smart about running a business. Got a tip to share with the rest of the seller community? Tell us in the comments below.
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