Building a business takestime, money and dedication. Starting your own ecommerce store is no exception.Sure, being a retailer is great – you get to set your own hours, work from home and connect with customers. But this won’t last long if you don’t assess your operating costs from the very beginning. That’s why we have compiled thislist of six ecommerce bills vendors need to know about
Picking Your Products
You’ve probably already considered the types of products you want to sell. Perhaps they are homemade, handcrafted goodies; or maybe they are retail merchandise that is easy to buy wholesale and resell online.
Whatever the case, you need to determine the cost and benefits of what you’re selling. For example, offering fancy furniture online could make it hard to turn a profit if the prices are too high. Conversely, selling printed T-shirts will be tough since you’ll have to sell a ton to put your business in the black. Homemade orders could also be difficult as you will have to handcraft every sale.
Try experimenting with a mix of high-end and low-end products to make more meaningful sales.
Site Production and Hosting
How much time and money do you think it takes to build a website? Well, that depends. If you are hiring an agency, you could be looking at hundreds or even thousands of dollars from the get-go. Thankfully there are plug-and-play services to help you launch your website. Shopify is perhaps the best ecommerce site builder around because it makes it easy to start your online business with little to no experience, and little to no cost. Hosting is provided too.
So, you’ve got your products and you’ve established your presence online. Now it’s time to figure out where you are going to house all your merchandise until the consumer purchases it.
Will you crowd your home with boxes until your living room looks like a warehouse, for zero additional cost? This might work for some small business owners, but you need to be realistic about the growth of your company and how long that option can reasonably last.
Once you’ve outgrown your living space, it will be time to invest in a storage facility. These typically run between $50 and $150 per month, depending on the size and location.
You’ll also need to consider packaging costs. Shipping expenses are typically passed onto the customer, so this shouldn’t be your primary concern as you start out; but all that bubble wrap cardboard and tape can add up.
Prices vary wildly depending upon what you are packaging (Fragile or sturdy? Big or small?). Be sure to keep detailed records on these costs so you can anticipate the average cost of materials you’ll need each month.
When you are starting out, your whole staff might just be yourself. But how long can you run social media outreach, customer service, shipping, inventory management and budgeting all by yourself? Eventually you may need to hire some coworkers.Common positions for an e-store include a customer service representative, a social media guru and a fulfillment associate. However, there are automated tools to help you fill these roles without hiring new personnel.
Finally, you may want to examine the costs of digital marketing. Social media outreach and email marketing are dirt cheap or even free if you manage things in-house. But online advertising can cost hundreds of dollars each month.
Only you can determine if this is the best course of action for your store. Then again, if you are trying to keep costs low as you are starting out, advertising expenses can wait.
Can you tackle the costs to make your dream a reality?