Five cost saving tips for retail businesses

It is an uncertain time to be in the retail business right now. Although we seem to be on our way out of the pandemic, consumers’ shopping habits have still not returned to pre-Covid levels.

It is understandable that as the future of the world lies in the balance, people are hesitant to spend money where they don’t have to.

Over the past two years, thousands have lost jobs or found themselves in difficult financial situations as a result of lockdowns and government imposed restrictions.

And to make matters worse, the cost of living is rising, with huge levels of inflation hitting people’s fuel and energy bills. There are countless individuals who can’t currently afford to buy the latest smartphone or designer trainers.

As a retail business, therefore, you will need to be extra careful with your finances until we can find a way out of this pandemic for good. Reducing your expenses will enable you to maintain business as usual while coping with the reduced demand for luxury and non-essential goods.

To keep your accounts in the green this financial year, here are five tips for retail businesses to cut costs.

Audit your expenses

The first step for any business to save money is to perform a complete audit of your expenses. Take a look at your financial statements and look at where your money is going. This will help you identify any unnecessary or overly high costs.

Are you spending too much on your energy bills? If so, consider reducing your operating hours or using energy-saving appliances. Consider whether you really need to offer free WiFi to your customers instead of saving money by downgrading your internet package.

Look at everything from the credit card payment service you use to your travel expenses and phone subscription. Be ruthless when deciding what to keep and what to discard.

Cut shipping costs

One of your most significant expenses as a retailer is shipping, particularly as significantly more consumers are shopping online in light of the pandemic. Packaging and delivery costs all add up, but there are a few ways you can reduce them to save money.

Perhaps you could reduce the size of your packages for a start. Delivery fees are usually calculated using the dimensions of a package, so by using smaller boxes and reducing the amount of empty space within each delivery, you can make a huge saving in the long run.

If you are posting non-fragile products, consider using plastic shipping bags rather than more expensive cardboard boxes. And if you;re worried about your impact on the environment, you can get compostable, recyclable and eco-friendly varieties too.

Go paperless

With climate change proving to be an increasingly important issue, a lot of businesses are following the growing trend of going paperless. Avoiding unnecessary paper usage not only benefits the environment, but can also save your business a lot of money in paper and printing costs.

In 2022, no one needs a physical paper receipt for their purchases, so you can quite easily offer customers email statements instead. You’ve instantly saved yourself a significant expense while also avoiding the risk of business disruption when your printer breaks down.

Negotiate

You may have established long-lasting and mutually beneficial benefits with your suppliers and partners, but that doesn’t mean you can’t negotiate a better deal.

The value of things is always changing, so a deal that might have been favourable five years ago, may not be as advantageous in 2022.

Consider whether a negotiation is possible, or alternatively you might even switch to a new provider or supplier who can offer you a better deal. And when initiating a new partnership, you should also try to broker a better offer to help you save money going forward.

Consider outsourcing

It might seem counterintuitive to suggest you might save money by paying other companies to help you out, but outsourcing can be an incredibly effective business strategy if done right. As a small business owner, you often have to spin multiple plates at once.

As well as focusing on growing the business, you may also have your hand in HR, accounts, marketing, and sales. All these responsibilities can take up a huge amount of your time, which could be better spent on finding new business opportunities and expanding your customer base.

Outsourcing certain areas, whether it’s to an accounting firm, a management consultancy, or an IT support company, allows you to concentrate your efforts on things that will increase your profits rather than constantly fighting fires.