If you’re a small business you’ve probably come across the term ‘omnichannel’ whilst building your business strategy. Even if you haven’t, you’re likely already implementing it.
These events offer great opportunities to online sellers, but you have to be careful if you want to get involved in these high-profile sales.
The key issue you’ll face is how to make slashing prices profitable. This becomes even more complicated when you add in the fluctuations of the currency markets. Luckily, help is at hand.
Let’s take a look at the best ways to use discounting, and how to manage your foreign currency transfers to protect your bottom line.
Discounts, bundles and special offers
Bundling products is a great way to increase sales and meet customer demand. Use your sales data to discover which products are commonly purchased together, and make sure any bundle you create is a logical mix of products. Use point-of-sale bundle offers to increase customer’s basket sizes right before they go to checkout.
Remember to give your customers a choice of bundled or unbundled products; research shows that offering products separately and as a bundle increases sales, but forcing customers to buy the bundle can harm sales.
Flash sales can work well – think of the success of the Thanksgiving weekend (which includes Black Friday and Cyber Monday); 108.5 million Americans shopped online last year and total sales were up 17.3% year-on-year to $7.23 billion.
Make full use of your email list. These customers have told you they’re interested in special offers; so give them some! Exclusive offers to your subscribers not only makes them feel special and increases their loyalty, but also gives you a way of enticing new sign-ups.
Discounting products sold overseas without breaking your bottom line
Discounting is much harder when you’re selling products overseas, as protecting your margin becomes more difficult in the face of uncertain exchange rates.
A rise in the value of Sterling can see your profits tumble when overseas funds are repatriated, while daily currency fluctuations complicate keeping track of your bottom line. Knowing how much of a discount you can realistically offer becomes much harder.
Keeping your cash flow as visible as possible is vital if you want to offer discounts in a way that benefits your bottom line, rather than hurting it. A Currencies Direct multi-currency collection account helps you to do this, as you can easily keep track of funds in foreign currencies. This makes it easier to see your overseas revenue in real time, as well as avoiding the conversion fees and below-par exchange rates offered by many online platforms that offer to automatically convert your money for you.
Working with one of our FX experts allows you to streamline your currency transactions and ensure you’re getting the most for your money with a clever combination of timing, hedging and the better rates we offer.
With your bottom line locked in and protected from exchange rate fluctuations, it becomes much easier to discount effectively, as you know how far you’re able to cut prices before it becomes damaging rather than beneficial.
Bear in mind, however, that just because you’ve locked in your own costs doesn’t mean that the price of your goods on marketplace sites won’t change, as these are calculated using market rates.
Cutting prices not profits this Christmas
Discounting during the festive season can help you attract new customers and improve the loyalty and spend of existing ones. Once you’ve protected yourself from currency risk it becomes easier to set your prices at a level that boosts sales without harming profits. Take those steps now and increase your chances of enjoying a bumper Christmas season.