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Thursday, June 20, 2024

Cut Costs for Your eCommerce Business Without Cutting Quality




Annie



3rd Jun 2024

Reading Time: 6 minutes

If you want to make money selling online, it’s important to look at how to cut costs for your eCommerce business expenses – but not cut any corners. The online marketplace is incredibly competitive, but quality matters as much as price. That’s why we’ve come up with a number of ways you can cut expenses in running an online shop or service without reducing the level of quality you serve customers.

Reduce Storage Costs

One of the biggest outlays for an online shop is storage space. Whether you’re working from your living room or renting secure storage, minimising your storage costs can slash your operating expenses.

The fastest way to do this is assess your stock levels. What isn’t shifting? Do you have overly large single items that take up bulky space? Looking at what is taking up space and how fast you rotate through different inventory items is one of the fastest ways to assess whether you need to rent less space.

If you handle a large inventory or big items, dropshipping is an option to consider. This gives you less control over the quality of items and delivery dates, but it means you don’t need to store physical stock. While there is a boom in dropshipping eCommerce businesses lately, they take away the personalised aspect which can put customers off. You don’t have oversight of parcels as they are packed and delivered, and you can’t do things like add branded cardboard boxes or inserts into packages to promote deals.

Finally, if you rent storage space for your inventory, negotiate! Ask if you can have an introductory discount or if you can get a reduction for paying a few months up-front. Some places will also do referral fees so you could even discuss putting an affiliate link on your website to encourage signups.

Cut Label Printing Costs

It might feel like a saving to buy fewer printed labels for your products until you know what sells and what doesn’t. However, bulk buying products like postal labels, packaging inserts, and branded stickers will save you an awful lot of money. Labels are the kind of thing you’ll use far more quickly than you expect!

Once you have a strong creative brand for your business, you can save a lot of money on bulk buying branded labels, like the round ones used to secure a box. If you’re not into branding or haven’t quite settled on your designs yet, blank labels and security labels are also cheaper to buy in bulk and can be used at any time so it’s never a waste of money.

Look for Introductory Web Store Deals

If you’re setting up your own online shop, it’s important to shop around for the best deal for setting up your website. The cheapest deal might not be the best, so do some research before opting for the lowest price.

Look for website packages that include:

  • Your domain name registration
  • Email addresses
  • 24/7 customer support
  • Web hosting
  • The ability to scale up easily as you grow
  • Ecommerce templates for easy web design
  • Integration with common payment types like PayPal

These things will make setting up your store much easier and help you build a website that grows with your business.

Hire eCommerce Marketing Help Online

Platforms like Fiverr are fantastic for finding people with skills that you don’t have. The art of running a business starts with being able to delegate. Focus on the tasks you know you can do, and hire people to do the things you can’t. It might not feel like a saving at the start, as you’ll need to pay some money. However, the time saving you get from having to learn a new skill (which can take years!) and getting a professional to help in days is well worth the expense.

It is worth noting, however, that sometimes online hiring platforms can be hit or miss. You may find that it is better to go for a service linked to a supplier. You may find a website designer also does branding, for example. Or perhaps your packaging supplier has a design service for branded boxes.

Put together a clear creative brief for whatever it is you’re looking for. Do you need someone to grow your social media following? Design your brand logo? Create a website? Whatever it is, be clear in the brief about what you need, when you expect it to be done by, and your budget. This will help to find the right people to help in a shorter time – saving even more cash as you can get started faster!

Be Savvy with Packaging

Instead of getting lots of small cardboard boxes of different sizes, it can be more economical to send things in medium and larger boxes with stuffing in. This way, you can bulk buy packaging like branded cardboard boxes and mailing envelopes as well as packaging. Doing that will reduce your overall cost per item to cut costs for your eCommerce business and actually increase quality as you send branded packaging.

Try to be as sustainable as you can, too. Cardboard always is better than plastic, and it is better to use the smallest box you can rather than using lots of excess stuffing. From letters to parcels, you should be aware of the size and weight you need to ship.

Automate Some eCommerce Business Processes

While many of us are aware of the incoming AI revolution with some trepidation, there are ways it can help automate your work processes to save you time. More than that, it can help you analyse your customer behaviour, so that you can work out the best way to maximise sales to increase profits.

Automation might be as simple as sending a follow-up email once an item has been delivered to make sure your customer is happy. This is a small-scale example of how to improve customer service, but gives a feeling of personalised service that will increase the chance of customers returning to buy more.

Automating processes that save you time can also include sending ‘items left in your cart’ emails, encouraging people to sign up to newsletters, and analysing stock and inventory levels. These are all straightforward tasks that can take you a lot of time as a new online shop owner, that will save you a lot of cash in the long term if you put automated processes in place.

You might not be able to automate everything, but being aware of how to manage your accounts well is another way to save time and money. Rather than spending on accountant fees, learning more about Making Tax Digital for businesses and what software you need to manage accounts will save a lot of time – and therefore money – in filing for your taxes!

Negotiate Supplier and Shipping Costs

If you use a local courier, talk to them to see how much you can negotiate on your shipping prices. You’d be surprised how much you could save!

Suppliers are also where you can cut costs for your eCommerce business. Bulk buying is one way to do it – but if you don’t have the storage space, don’t worry! Talk to suppliers to see if you can commit to buying a certain amount to achieve a discount, but receive the items in spread out shipments. This saves on your storage space while helping you take advantage of per-unit discounts.

Invest in Customer Retention

This one might feel a bit backwards, but stick with us on this. Investing in your customer service as you launch your eCommerce business is one of the best ways to cut costs in the long-term.

Customer retention could be as simple as printing package inserts with unique discount codes to thank them for their purchase, offering a discount on their next purchase. Or, as outlined above, sending thank-you emails after their item has been delivered. If you have a technical item, including user guides either as printed inserts or in an email will improve customer satisfaction, too.

 

 

Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence. When investing your capital is at risk.



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