If you want to set up a small ecommerce business on a budget but don’t know where to begin, this article is a good place to start.
So, you’ve got a great ecommerce business idea but need a guide to light the way to success – in this article, we’ll walk you through setting up your online business, step by step. The great news is that you don’t have to spend much money — a low-cost business model can work just as successfully as large enterprises, especially if they’re online.
This guide will take you through everything you need to know, from your business plan to finding an ecommerce platform to streamline your operations. Come with us on a journey into the world of ecommerce solutions and take that first step towards running your very own ecommerce store.
Choosing a niche and product
One of your first tasks will be to identify a profitable niche in the market and select the physical or digital products that align with your budget and resources. Deciding on a niche product is essential, as it will set you apart from the crowd and give you a targeted audience to market to. This business strategy is more likely to result in a successful brand.
Starting with an area that reflects your interests is a great idea for small businesses – you’re more likely to enjoy success if you’re passionate about your product. Moreover, you’ll likely have insider knowledge about your product and understand why potential customers make their purchasing decisions.
As well as selecting a niche you care about, your product should be positioned in a market that’s not already saturated with the same items. Consider how you will add extra value to your offer unless you sell a unique product. So, if you’re selling books online, you could offer a unique dimension by avoiding bestsellers and focusing instead on a specific genre like fantasy. You could even drill down to a sub-genre like steampunk fantasy with this one.
Finally, remember that you’re working with limited resources, so ensure that the product matches the budget. If you sell on a shoestring, investing in luxury goods may not be an option.
Finding affordable suppliers
Next up is finding affordable suppliers and using your negotiating skills to keep those costs down. You have several options here. You can check out manufacturers and wholesalers near you or search further afield to source your goods.
The benefit of using wholesalers near you is that you can inspect samples of the products you will buy to see the quality and specifications yourself. Meeting a manufacturer or wholesaler face-to-face makes negotiating your prices much easier, too — an essential feature of operating on a budget.
Or you could cast your net wider and check out wholesalers in locations like China who can source the product you are looking for at a great price — Alibaba is the best-known example.
Of course, the downside to buying your stock this way is that you can’t see it up close before you commit. But that’s a risk many are willing to take for cheaper items.
Another option when seeking suppliers is to check out what’s available in brick-and-mortar or online stores near you. This is an excellent idea if you want to sell unique, arts and craft style goods and can work well when store owners want to sell online but don’t have the time or confidence.
Yet another option may be that you make the goods yourself if you’re the creative sort. The success of this strategy will depend on various factors, including what kind of volumes you can produce and whether you have the time to do this alongside running your own ecommerce business.
Building an ecommerce website
Your ecommerce website is the shop front to your online store — the place for you to show off your brand and products. Fortunately, even if you don’t have a huge budget, you can still create an attractive and functional website without spending too much money.
Instead of doing it yourself, the simplest way to create an ecommerce website is to use a website builder service. This means you don’t have to be an expert in web development to get the results you want. This service will give you a range of professional templates, platforms, and layouts to create a website that aligns with your brand.
As well as giving your site a professional look, templates offer functionality. For example, your template can include a payment system so your customers can make their transactions quickly, and you can start receiving money. Be sure to employ good search engine optimization techniques, carefully choosing keywords to capture your desired audience.
If you’re looking for a service that will provide a wide variety of functions, an online platform provider for ecommerce is ideal. This service can help you design an eye-catching website and offer a whole host of add-ons. These can include chatbot services, loyalty programs, and inventory management.
This option also makes it easy to update your website with fresh images, stock, and other details, as these functionalities are all integrated into the platform. Online platforms like NEXT BASKET take away the hassle of managing your website so you can concentrate on your online business.
Marketing on a budget
Marketing is essential to your work, as it enables online customers to find your products.
Online advertising and digital marketing are two affordable ways to carry out your marketing. You can start with social media marketing, using your channels to create your own content, or (if your budget can stretch) using paid social media ads.
Influencer marketing is also a good call for certain products, mainly if they fall within fashion, beauty, technology, and healthy lifestyles. Here, popular influencers are considered experts in their field, endorse or mention your products, boosting your brand’s exposure. You can also employ content marketing methods. As the name suggests, it involves creating content that’s useful to potential customers and will drive them to your online store. It includes media like blog posts, longer articles, podcasts, and videos.
Good old-fashioned email marketing – sending information about your product or service via email — can work well too. To make your campaign successful, ensure that your distribution list is relevant, customize your emails to recipients, and include special offers within the email.
You should know about growth hacking – this method seeks rapid growth at a low cost and is often employed by startup businesses in their early stages.
Growth hacking uses affordable ways to promote your business. These include content marketing and product marketing, which involves bringing a new product and its uses to the attention of potential customers. This could be through exclusive offers to make purchasing your item appealing. Think of it as a mindset as much as a method, so you’re always looking for free or affordable ways to reach your audience.
Maximizing customer lifetime value
Customer lifetime value (CLV) is a way to measure the long-term growth of your business — it means how much value a customer can offer your business in the time they are linked to it.
You’ll need strategies for maximizing CLV, which you can do through several methods.
One of the most obvious is customer loyalty programs, which incentivize customers to keep purchasing your products by offering points to trade in, free gifts, or other rewards. Points programs are one of the best-known types of loyalty programs. This is great because the format will be familiar to your customers, and it’s easy to earn and trade in points.
Other strategies to boost CLV include upselling, which involves persuading your customer to buy the more expensive version of their chosen product. To be successful in this strategy, offer convincing reasons why the upgraded product is the best fit for the customer.
There’s also cross-selling when you sell a customer a product that complements their original purchase. For example, when your customer gets to their shopping basket, you can show them “what customers also bought.”
Customer loyalty and resultant CLV also rely on relationships with your customers and excellent service. Make it personal — interact with customers on social media, remember their likes and dislikes, and always offer exceptional customer service, whether by sending a handwritten note with their purchase or responding quickly to queries.
Inventory management is another essential part of running an ecommerce business.
It covers organizing the stock you need for your online business. This includes ordering or making your items for sale, storing them, sending them out for customers, and knowing how many available items and when you need to replenish supplies.
When starting with a new online business, ensure that you neither overstock products (so you don’t overspend on warehouse costs) nor run out of them (so you don’t disappoint customers). You’ll need to keep track of them manually or use inventory management software.
Inventory management software is a tool that helps you track your existing inventory and predict how many units of your product you will need going forward. You’ll also get notified if stock is running low so you can take action quickly. This software can show how many items are left in stock on product pages so customers can know what’s available.
Online tools like inventory management are invaluable for having the right balance of products in stock, ensuring that you don’t overstretch yourself yet can still fulfill your orders. You can use inventory management software as an add-on to your website or use an online platform provider like NEXT BASKET that includes it as part of the service.
Shipping and fulfillment
You need shipping and fulfillment rights to ensure satisfied customers, but how can you manage the whole process affordably?
First of all, consider the various shipping options that you can offer to customers:
- Free shipping: As the vendor, you cover the cost of shipping.
- Flat rate shipping: It is the same for every order, regardless of size or weight.
- Calculated rate shipping: Your customer’s rate is calculated precisely at checkout depending on the goods’ weight and size.
- Local shipping: when you deliver to nearby customers without using a carrier.
- Customer pick-up: The customer picks up their goods from a pre-assigned location.
Depending on what you’re selling, the cost of these methods can vary wildly. You may want to research expected costs for several scenarios — for example, if your customer buys just one item or several.
Getting fulfillment right is essential to your business’s success and forms a large part of the reviews you get. So, make sure that whichever method you choose is a reliable one.
One way of streamlining this part of your business is by using a warehouse service that links in with an online platform provider.
This means that all you need to do is deliver your goods to the warehouse, and the provider will ensure speedy dispatch to the customer. This service can free you up to focus on other tasks, with peace of mind knowing that your shipping is being taken care of.
Excellent customer service will help boost repeat sales, generate great reviews, and foster customer loyalty.
Here are some ideas for providing the best customer service on a budget:
- Use a chatbot to engage with customers and answer queries. Chatbots are indispensable since they offer quick solutions to common issues.
- Provide FAQs so customers can find answers quickly for themselves. Other self-service options include community forums and knowledge centers.
- Provide multi channel support. Make it easy for customers to contact you through various means, including your social media channels, email, and contact forms on your website. The more ways there are to contact you, the better experience your customers will have.
- Respond to customer reviews. If your customer has had a positive experience, thank them. If they’ve left negative feedback, reach out to resolve the issue.
- If you receive a complaint or negative feedback through any means, resolve it quickly. Be sympathetic to your customer’s words and endeavor to reach an amicable agreement quickly.
- Keep it personal. When interacting with customers, always include a personal touch. This could mean including a handwritten note with their purchase, using their name when communicating with them, or sending them a special offer on their birthday.
Understanding ecommerce data is key to your business’s growth and success. It will help you optimize your operations, understand consumer behavior, and identify areas for cost savings.
Choose an analytics software package that keeps your data from all your marketing and sales channels in one place. This allows you to see how all your campaigns are faring, whether on social media channels or through email marketing or other modes, and how they compare against each other.
You’ll be able to see where visitors to your website are coming from, how they got there, for example, from which marketing campaigns, and what actions they took — whether they made a purchase or abandoned their shopping cart.
There are lots more areas that ecommerce data will offer information about, and all of this data together will help you build a picture of your customers (and potential ones) and their shopping habits.
For example, if you’re selling beauty products, you may find that most of your sales are generated by Instagram reels showing the consumer how to use your products. From there, you can base future marketing campaigns on informative videos showing results. This means you can focus your resources on campaigns that appeal to your customers.
Staying in the same place is never an option for businesses, large or small. But how do you scale up your ecommerce business from your initial startup business idea to an increase in profit margins when you’re on a budget?
You’ll need to outsource if you’re receiving orders for goods faster than you can source or make them. While letting go of control can be scary, once you find a trusted supplier or manufacturer, you’ll be thankful you made the step.
The same goes for the fulfillment of your orders. Once your ecommerce business starts growing, it just isn’t viable to deliver all orders yourself or spend time liaising with couriers. The best ecommerce platform services will take care of delivery and fulfillment for you here — all you have to do is deliver your goods to a warehouse, and they’ll take care of the rest.
Make the most of automated processes like chatbots that will deal with many of the common queries you receive so you don’t have to go through each one individually.
Remember that technology is here to make life easier for the small ecommerce business in the growth phase.
The tech that can help you scale up includes inventory management software to help you keep track of stock. Automated translation software allows you to offer your website in multiple languages and reach wider audiences.
Frequently asked questions
How can I find a product to offer for my small ecommerce business?
It’s essential to do your research. Find out which affordable products sell well and then offer your unique spin or offers. It’s also a good idea to sell products you are already interested in. It will inspire you, and you can use your inside knowledge.
Can I build a website for my business affordably?
Nowadays, it’s easy to build your simple website with WordPress at minimal cost. And you don’t need an in-depth knowledge of IT or design to create a functional site. You can even use the services of an online platform provider who can maintain your site if you don’t have the time.
What do I do when I’m too busy to take care of everything alone?
First of all, congratulations on the success of your ecommerce business. If you’re looking for a solution that takes care of everything you need to run your business, from website maintenance to digital marketing, inventory management, and more, consider a quality online platform provider like NEXT BASKET.
We can manage many of the actions you need to operate successfully, freeing you up to grow your business even more. Reach out more about how we can help your ecommerce business grow and thrive.