Do you have an online store?
Are you thinking of opening one?
This post is a follow-up to my popular post Thinking of Opening an Online Store? Read This First.
The comments on that post made me realize many people run an online store.
However, what if running an eCommerce business is something you’d like to do but you just don’t have the budget?
Today’s guest author is here to answer that question.
How to Launch an eCommerce Business on a Budget
by Angelina Janos
Launching a business is not an easy thing to do – especially if you are working on a tight budget. But a tight budget can actually help you stay focused and spend your money on things that actually matter. So, if you are looking to get into eCommerce business, here are some tips to help you do it without spending a lot of money.
Registering your business
The first thing to do is to sort out the registration. Most of this won’t cost a thing, although business registration expenses can depend on your country. However, you need to make sure to take care of this part – not registering can end up costing you a lot more in the long term.
The most important parts to cover at this point include:
- Creating a business name and registering it.
- Buying a domain name and a website.
- Applying for a business license and a permit.
In order to create your website, you can find plenty of small business software options from OZCodes. The savings site has offers on web hosts, image editing software and so on – these can help you launch a website cheaply.
Pick a product to sell
You will need to think what you eCommerce business will sell. The good news is that this won’t cost a thing, as ideas are usually free. You should check out popular shopping platforms and see what products are selling and perhaps what are those items that are missing – and thus provide you with an opportunity. Shopify is a great platform for understanding what kind of products sell and which don’t.
Opt for drop shipping products
Don’t go and buy a big stock of products. Instead, you want to opt for dropshipping. This cost-effective method means running your business on a platform and only paying for the products once a customer buys from you. This means you won’t end up paying for items no one isn’t even buying. There are different options to go with but Oberlo is one platform worth considering.
Use dropshipping to test, which items sell and which don’t. It’s a cost-effective way of seeing if you could add new products to your repertoire or stick to selling just a single item, for example.
Be smart with your marketing strategies
Marketing is an important part of a successful eCommerce business. The good news is that it isn’t as expensive in the modern world. You already have a website in which you can add content to entertain and inform your customers. You should also list your eCommerce business on business listing sites to help make it easier for customers to find you.
The other strategy involves using social media to your advantage. You want to regularly post content and engage people on social media. Learn to use hashtags to your advantage and you will notice people visiting your site more. Choose the content based on your products – you can just post photos, make How To-videos or share information through a blog post.
Use paid advertising only after you’ve established a good content marketing routine and a proper social media strategy. Both are relatively cost efficient and you can automate much of your social media activity with software like Social Oomph and PostPlanner. Online ads can help you promote the content – Facebook Ads and Google AdWords campaigns are worth opting for.
Calculate your margins
If you don’t want your eCommerce business to cost a fortune, you need to be smart at making money. You can launch lean and reinvest the money to grow your business if you just know how to make the sale. It’s essential to understand the cost of keeping your site open. Calculate the operational cost carefully in order to use the right price tag on your products. If you don’t get your margins right, you are going to start losing money.
So, make sure you understand how much a single product costs you (buying, shipping, marketing, selling and so on). You then need to figure out the sweet spot – the price that provides you with the right amount of profit but which isn’t too much for the customer to pay. The profit you make should be as much as possible – don’t forget you can occasionally push the sale up with discounts and offers.
You can easily start an eCommerce business with a budget as small as $50-$500. Your biggest expenses will be creating the website and paying for its upkeep. Almost everything else can be paid for after the sale. Now, in terms of these costs, it isn’t even often a monetary cost. In many cases, it’s about the labor cost. The more you are willing to sort out yourself (from marketing to accounting), the cheaper launching your business will be.
So, if you are willing to learn and work hard from the start, you can launch an eCommerce business on a budget. As your business grows, you can start utilizing outside help more. Running a successful online store isn’t impossible and it doesn’t need to cost a fortune. You just need a plan and plenty of determination.
Readers, please share so people interested in monetizing by running an eCommerce business learn these tips.
I look forward to your answers in the comments section: Do you have an eCommerce business? Would you be interested in starting one?