How retailers can reduce costs

We live in an age that’s ripe for retailers to build a successful venture.

But while you may be bringing in a lot of money, it’s also highly likely that you’re spending a lot too. And that can seriously affect your bottom line or how hopeful and calm you feel about the future of your business.

If there’s one thing to know, however, it’s that there are always ways to keep costs down.

In this article, we’re going to run through a selection of tried and tested tips that’ll help you to get your expenses under control.

Comb through your expenses

First thing’s first: you need to have a thorough and deep understanding of your current financial landscape. It could be that you’re spending much more money on needless things than you realised.

This is especially the case if you’ve been in operation for a while. Just as in personal lives, businesses tend to acquire costs yet rarely take the time to rid themselves of expenses.

Take a hard look at what you’re spending money on, and if there’s anything that you no longer really need, then get rid of the cost. With this approach, you might just find that you’re able to cut more expenses than you initially thought. 

Share your space

Your rent is going to take up a huge chunk of your operating costs. So why not look at reclaiming some of that money? One good approach for doing this is to rent out a corner of your retail space to another company.

The type of company that you rent it to will depend on the type of business you’re running. For instance, if you have a makeup store, then you could consider renting out some of your space to a hairstylist.

Or, if you have a bookstore, you could rent it to a coffee shop. Doing this will help in two ways - it’ll alleviate the burden of paying rent, and it’ll bring new customers to your store. 

Look digitally

It’s important to advertise and sell your belongings in a cost efficient way. Today, efficiency relates to digital life. If you don’t have an online store yet, then do so.

This does require an investment of cash, of course, but it can help to save in other ways.

For example, if it takes off, you may be able to reduce your physical store working hours. It’s much cheaper to sell through the internet than in the real world.

It can also help with your marketing -- the vast majority of consumers look online when thinking about making a purchase. If you have a robust digital presence, then you’ll be able to take advantage of the new consumer trends. 

Avoid marketing waste

You’ll need to spend a lot of money marketing your store. And actually, you should do that -- it’s not an area of your business that you’ll want to cut too many corners with.

After all, every penny you spend on marketing should bring a decent return on your investment.

However, that’ll only be the case if you’re putting money into the right marketing areas. If you’re not, then you’ll only end up wasting money - and spending more than you’d like.

There’s no hard and fast rule when it comes to marketing. The main thing is that you’re making smart, well-informed decisions. If you’re not using data to drive your marketing, then you’re probably wasting money somewhere along the line. 

Reduce retail space bills

Just as with your home, you’ll need to ensure that your commercial premises have everything it needs to allow you to work well. But of course, things like gas and electricity can be expensive.

However, just because they can be expensive, that doesn’t mean that they need to be expensive.

If you’re on the same tariff that you were on when you first opened your store, then it’s possible that you’re paying too much. So rather than just accepting that you have to pay that price, look at switching.

You can easily compare business electricity to ensure that you’re not paying more than you need to. You could end up saving a significant amount of money, just because you took some time to see what else is out there. 

Rethink your opening hours

It’s important to think about your opening hours. You’ll want to find a balance between making your hours convenient for the public and your expenses. Every hour that you’re open will cost you money.

And there could be some times when it’s not really worth your while being open. For instance, if you find that you’re getting next to no business for the first hour that you’re open, it could be worthwhile opening a little later. 

Invest In employees

One of the best methods for keeping costs down is to invest in your employees. If you have a high employee turnover rate, then you’ll be spending much more money than you should be.

By investing in your staff, you’ll be making your business an attractive place to work, which will mean staff are less likely to leave, which in turn will mean you’ll spend less money on the recruitment and training process.

Plus, if you can build a good team of employees, then the customer experience will be improved, and that should result in more revenue.

Reduce shrink

Finally, take a look at reducing shrinkage at your business. This can cost retailers a lot of money if it’s not handled quickly.

There are plenty of ways that you can reduce shrinkage at a store. For example, you can improve the returns process, use technology to keep track of your inventory, and train staff to light for signs of shoplifting.

There’ll always be some shrinkage when you run a retail store, but these tips should help to keep it to a minimum.