Launching a new e-commerce business can be expensive. To get started, you will need to invest time and money to find a wholesale supplier. Your business will also need capital to develop your website, to keep this list, to market your business, to provide customer support and handle shipping.
Before you see your first dollar from customers, this expenditure is spent even before that. Then it is not surprising, Less than ten percent Live online beyond a few years of online store.
But it is very practical to reduce your capital cost and run an e-commerce business successfully with at least the budget. Here are some strategies about how you can go about it.
Third party platforms and plugins
If you are a programmer, you can enjoy making ecommerce platforms from the ground according to your specific needs. It can consume a lot of time and resources. Third party ecommerce platforms such as Shopify, Magento, Volusion and BigCommerce do a great job in helping you set up an online store in minutes. Also, most of these tools are subscription-based and so you do not spend a few dozen dollars every month to run your store.
Although you can also see free options WordPress To further reduce its capital costs, it is worth pointing out that these paid platforms come with unbelievable infrastructure that includes third party applications and plugins that you can install with a click. For example, there are apps to design your products in shopping, print your design, label your shipping, and contact supplier. It can make your life incredibly easy. There is no similar ecosystem in free options so far.
drop shipping
The biggest expenditure on e-commerce is product purchase and stocking. There is intense competition in online stores and it has significantly reduced profit margins. Consequently, e-commerce business owners often like to buy large amounts of stock at wholesale prices which contribute to higher capital expenditure. But any savings secured through bulk purchase has ended due to your need to stock your list in the warehouses.
You can bypass this expenditure by choosing to drop your products. drop shipping Essentially works like this - eCommerce Store owners are partners with suppliers who offer to ship the products on your behalf (complete with your label and branding). In this way, whenever your store sells, you send order details to your supplier, who takes care of packaging and shipping.
However dropship can come with a set of risks. Suppliers may fail to ship the order for which you have been paid. Alternatively, they may fail to ensure quality or shipping SLA which can work harder for your brand. Although you can avoid shopping like e-commerce platforms, which have in-house dropshiping tools like Oberello which store owners can use To join verified dropshiping suppliers. This prevents fraudulent suppliers from losing money to your business.
Smart marketing
Ecommerce stores that are made on dropships and third-party platforms, there is little expense to take care of them. Consequently, all your capital can be fully deployed on marketing activities. However, not all marketing activities are effective for startup business. Online stores generally rely on search engine marketing to target customers. However this may be an expensive strategy. For one, search engines do not take many years to rank their site on the first page of search results. Advertising solutions like AdWords can be costly and can not really be meaningful for low-margin businesses.
Social media has become one of the most effective channels for e-commerce marketing. Customers' participation on platforms like Instagram is very high and studies show that more than 7080 US businesses are present on Instagram. There are two ways to deploy high ROI marketing campaigns with minimum budget.
The first strategy is Barter Marketing - this is done by identifying complementary Instagram accounts that you cross-promote. For example, if you sell travel bags in your store, you can partner with travel bloggers with similar listeners on Instagram to cross-promote your accounts. A continuous barter strategy can help you achieve thousands of followers within a few months, which can be cherished to convert to paying customers.
Another strategy that works on social media is UGC (user generated content). You can launch competitions that invite target customers to share or tag your post in exchange for giving you the chance to win prizes. Such competitions work very well on platform like Facebook and can help you reach thousands of new users for only a fraction of the cost of advertising.
Is just the beginning
There are dozens of strategies listed here that you can use to minimize capital to launch a successful eCommerce store. Ecommerce is a long term game and it is important to manage your cost effectively to ensure that you burn all your cash before earning money with your business.
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