More than just a catchphrase, sustainable sourcing is an effective way to set your eCommerce website or store apart by elevating your brand image, capturing more market share, reducing operating costs and potentially charging a premium for products.
There's a growing trend of customers who want to know where the products they buy are coming from as well as how they're made. “People identify emotionally, politically and personally with ethically sourced products," writes Brian Hughes, founder of Integrity Marketing and Consulting.
Sustainable sourcing of products and services considers environmental impacts as well as workers' treatment. The triple bottom line of social, environmental and financial benefits gained from sustainable sourcing is often referred to as the three Ps — people, planet and profits.
Here are four tips on how your business can profit by sustainable sourcing of materials and products for your eCommerce site or store.
1. Boost Your Brand
One of the greatest benefits to small businesses that opt for sustainable sourcing is improving brand reputation. Customers are clearly considering ethical sourcing when they shop: About 78 percent of U.S. shoppers say they feel better about buying products that are sustainably produced, according to a recent study by Unilever.
The study found that nearly a third of consumers worldwide are choosing brands based on their social and environmental impact. One in five people also say they would deliberately choose brands that make their commitment to sustainability clear in their packaging and marketing. Sustainable sourcing can increase your site or store's reputation and social impact.
As a bonus, you can also boost your image among your own employees: A report by Deloitte shows that employees are twice as likely to view their employer positively if it uses sustainable products and practices.
2. Capture Market Share
Many sustainable products, such as items made from organic, renewable or recycled materials, have a loyal fan base. One way to increase your business' market share is to align your products and services with customer populations that highly value sustainability.
To introduce your site or store to a new target market, consider partnering with a relevant philanthropic cause or charity. Even a business with a small budget can offer to do pro bono work or volunteer time to help a charity. Not only can the partnership boost your business credibility among sustainably-minded consumers, it can also be a source of referrals from the charity that can help you increase market share to grow your business.
3. Reduce Costs
Sustainable sourcing and business practices can also reduce your business operating costs. An easy place to start is to make your office or production space green with energy efficient lighting, improve insulation. You can also take steps to reduce waste in order to lower energy costs.
Using sustainable sources for products can also reduce long-term costs by ensuring that your business has a renewable supply source and by meeting rising consumer demands for certain materials, according to McKinsey. After the European C&A apparel company switched to organic cotton, demand for clothing made from that fabric drove sales from 85 million garments in 2012 to 130 million garments in 2014, McKinsey reports.
Sourcing materials and products from local vendors can additionally reduce shipping and transportation costs and stabilize your supply chain. Carolina Wren, for example, not only sells soy wax candles in recycled wine bottles obtained from local restaurants, but also commits to recycling any unused bottles and glass left over from production. The company even tracks the number of bottles it recycles on its web site.
4. Charge A Premium
Over 50 percent of U.S. consumers say they are willing to pay more for ethically sourced food and beverage products, according to a study by GT Nexus. The survey also found that 45 percent of consumers would pay more for sustainably sourced clothing and footwear. By identifying the product categories where sustainability is most important, your business can often charge a higher price for goods. Nearly a third of consumer say they are willing to pay up to 5 percent more for sustainably sourced products and 28 percent say they would pay up to 20 percent more, the study found.
If you do decide to charge more for sustainably sourced products, do be sure that you can show customers proof that you are providing what you advertise in your sourcing and production methods. Katie's Coldpress, for example explains on its website what its "certified organic" label means.
To differentiate your site or store from the competition, sustainable sourcing can help your business create a triple bottom line of social, environmental and financial benefits, demonstrating that businesses of all sizes can truly do well by doing good.