Online stores or eCommerce sites have become an increasingly popular avenue for entrepreneurs that want to start a business on a budget. Operating virtually is a lot easier to start and more affordable than opening a brick-and-mortar location. There’s also the increased accessibility to target audiences. Be that as it may, operating an eCommerce site does come with expenses. If you’re an entrepreneur working with limited funds, these suggestions can save you money.
Choose The Right Payment Processor
Having multiple payment options for customers to buy your products or services is essential. Payment processors collect online payments for you for a fee. The idea is to keep as much of your sales proceeds for your business, so ensure that you shop around for the lowest rates. If you’ve been with a payment processor for a while, you may be able to contact them and negotiate lower rates or savings in other areas like statement fees.
Purchase Dual-Purpose Software
Running an eCommerce business means investing in a lot of software to complete various functions. You’ll need software that can record sales, send out invoices, accounting, keep up with inventory, and provide marketing analysis and other data reports. Rather than buying separate software, save money by investing in software or applications that serve more than one purpose. For instance, a point of sale system will keep track of purchases, manage inventory, and provide market analysis for you in real-time.
Outsource Fulfillment Needs
When you start getting lots of orders, fulfilling them yourself is time-consuming and expensive. Not to mention, it takes longer and costs more for customers to get their merchandise. As you don’t want to waste money or lose business, it’s best to outsource your fulfillment needs. eCommerce fulfillment companies have pick, pack, and ship solutions, including kitting, to cut costs and improve customer experience.
Gain Control Of Inventory
Inventory management is a tricky thing for new eCommerce businesses. You want to have enough products in stock to satisfy customer orders, but overloading inventory is a waste of money. The merchandise ends up sitting in storage for weeks or months until you have no choice but to sell it at a lower price to get rid of it.
Develop a strategy to manage your inventory. Sales and other analytical tools can help you review projections to determine which products you need most. That’s another reason to work with a fulfillment company because they have their own inventory management processes in place to save businesses time and money. With barcodes and SKU systems in place, fulfillment companies can provide clients with inventory updates in real-time.
Be Mindful Of The Promotions Used
Promotional offers are a great way to encourage target audiences to make a purchase. Some of the most common concepts used are free or discounted offers. The idea of saving money is appealing to customers and can help boost sales. Be that as it may, promotions dig into your pocket.
The more people you offer free or discounted services to, the less you make on each sale. One option is to provide the promotion for a limited time or to a small group of customers. Another solution is to create a points system where customers have to earn their free and discounted products by making several purchases over time.
Capitalize on Free Marketing Resources
A large portion of your budget will go to marketing your eCommerce site. Creating and managing your online presence is paramount to remaining in the competition. Unfortunately, marketing tools and resources aren’t always cheap. You can cut costs by taking advantage of free options. Take social media, for instance. You can create an account, post messages, share content, and advertise your products and services to millions of users for free.
Starting an eCommerce business might be more accessible and affordable than a brick-and-mortar location, but it still has its challenges. If you’re working with a tight budget, using suggestions like those listed above can help you cut costs without reducing the quality of your online store.