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How eco-friendly can be profit-friendly: The benefits of green e-commerce

Green e-commerce might be considered an expensive choice for businesses but Laura Grant, of the Business Woman Guide blog, says it could help the bottom line too

In days gone by, taking an eco-friendly approach was an expensive necessity to meet regulations – but green e-commerce benefits are becoming more wide-ranging.

Companies in 2018 are now actively inserting green practices and sustainability proposals into their business strategies not just to offset their carbon footprint, but to keep costs down too.

Eco-friendly packaging and shipping can help their bottom line and make sure goods are safe in transit without lingering in landfills for thousands of years to come.

According to a report by the World Wildlife Fund for Nature (WWF), a business’ return on investment (ROI) for “green interventions” was placed at 233%.

Laura Gayle, of the American female entrepreneurs blog Business Woman Guide, looks at how a green e-commerce approach can result in a bump in both direct and passive profitability over the long-term.

 

Green e-commerce can be great for PR

Eco-friendly business practices are great for public relations for a number of reasons.

Perhaps the top one being they make consumers feel good about supporting businesses that act responsibly where the environment is concerned.

Other ways green policies help businesses is they:

  • Make terrific marketing campaigns
  • Promote a positive brand image
  • Tend to attract new customers
  • Have a propensity to develop a loyal consumer base

Also consider the fact millennials have had a significant amount of buying power for several years now and Gen Z is currently right on their heels as they too continue to garner purchasing influence.

Both generations are highly responsive to businesses that put a focus on sustainability — so between their sheer numbers, combined with their environmentally-conscious tendencies towards spending — these are demographics businesses don’t want to ignore.

Green e-commerce

 

Consumers are willing to pay more to help the environment

While it’s true that green e-commerce does involve making initial investments, over the long-term the payoffs typically turn out to be handsome.

According to the numbers, sales of environmentally-friendly products in the United States boasted more than $40m (£31m) in 2012, demonstrating even back then many consumers were willing to pay a little more to support green initiatives – and you’d expect the green movement has only grown since that time.

Today’s socially-conscious consumers not only gravitate towards green products but they scrutinise and check labels, look for recycled materials and packaging, and actively research manufacturing and shipping practices.

Companies that make the grade will earn the spending dollars of these consumers and, as a result, enjoy higher levels of sales and increased profit margins.

They’ll also be more likely to attract wealthier clientele, further enhancing their bottom line.

Sustainable packaging provides many benefits in green e-commerce

There are numerous benefits to investing in eco-friendly and sustainable packaging, the first being it’s better for the environment.

Your goods are kept safe in transit, be it supply or delivery, without leaving lingering waste in landfills. Other benefits include:

  • Recycled materials typically costing less
  • Significantly decreasing use of plastics by replacing these with renewable materials
  • Increasing efficiency and practicality
  • Easier disposal of waste
  • Eliminating petrochemicals used during manufacturing of packaging materials
  • Reducing water consumption during manufacturing, along with lessening CO2 emissions
  • Packaging taking up less warehouse space
  • Less packaging equates to lower shipping costs since these materials generally weigh less
environmentally-friendly packaging
Skipping Rocks Lab’s Ooho packaging (Credit: Skipping Rocks Lab Facebook)

Also, keep in mind every recycled or renewable packaged item sent out to consumers reminds them you are consciously investing in sustainable packaging.

What better way to promote your brand image than to continuously highlight how much you care about the Earth through the care you put into packaging?

 

It develops a positive workplace culture

Over the decades, it’s become more “trendy” to be environmentally-conscious.

We only have one planet and many people feel it’s everyone’s responsibility to take care of it. By investing in green strategies and eco-friendly policies you’ll have:

  • A higher chance of attracting like-minded people who want to accomplish similar goals and contribute to eco-friendly businesses and, as a result, often seek out these companies for jobs
  • Better employee health and less sick days taken, increasing productivity
  • Dedicated employees, which eliminates costly high turnover rates

Bottom line, people feel good about their contributions to eco-friendly businesses, which in turn, tends to create a positive workplace culture.

 

Become eligible for potential tax deductions through green e-commerce

As an added benefit to moving your online business into the green space, you’ll be eligible for more tax credits at the local, state and federal levels.

It’s not just the major companies that can enjoy these, smaller companies can take advantage of these too.

These tax incentives can help offset the expense invested towards green initiatives.

To see where your company may qualify (or to look for ideas of ways you can invest), check out the Database of State Incentives for Renewables & Efficiency.

It doesn’t end at tax incentives, environmentally progressive companies can also enjoy subsidy benefits, grants and financing programs offered by various government agencies to those interested in becoming more environmentally-friendly.

 

What else can e-commerce companies do to become more eco-friendly?

It’s clear, eco-innovation is where it’s at. According to some statistics, many small and medium-sized businesses that are focused on eco-innovation are steadily growing at 15%, while their non-investing competitors are staying flat.

Want to avoid being grouped into the latter category? You can do this by becoming more environmentally conscious:

  • Invest in automated processes to reduce paper use, make inventory management and routing more efficient, and save transportation costs
  • Focus on strategies to reduce your return rate and eliminate unnecessary paper, shipping materials, and shipping
  • Use sustainable packaging
  • Where possible, use flexible packaging instead of boxes
  • Partner with suppliers and shippers who are also eco-friendly (and share this information in your marketing!)

These days it’s not practical to act irresponsibly when it comes to the environment nor is it an “either/or” situation when it comes to green practices versus profits.

It’s actually possible and increasingly more probable to accomplish both objectives simultaneously.

And, in today’s competitive e-commerce environment, you absolutely should because green marketing is a pretty powerful tool.