Gross profit margin is a key metric for eCommerce business owners to manage.

Gross margin is a two-part equation.

To improve gross margins for your e-commerce store, you can either increase your revenue per product or decrease the cost of each sale.

To increase revenue, you have to find opportunities to increase prices or average order value.

The specific strategies you should use here will be specific to your business circumstances.

👇 I recorded a video going over this below

Some examples include:

• Add a recurring element to your sales to create repeat customers
• Improve Your Product
• Upgrade Packaging
• Product Bundling & Discount Strategies to increase average order value

Decreasing your cost of goods sold is more difficult but possible.

The specific strategies you should use here will be specific to your business circumstances.

Some examples include:

• Supplier negotiations for lower pricing
• Reducing shipping cost
• Reducing warehousing costs

Two keys to understanding and improving gross profit margin is gathering and interpreting data.

That is why it is key to invest in proper inventory management system to understand your inventory costs which compromise your cost of goods sold.

Additionally, you need to properly track your variable costs separately including freight, import, manufacturing costs, packaging and shipping.

This all should be tracked per each product, sales channel and customer.

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