5 Tips for Running an eCommerce Business on a Budget
One of the most common refrains for online businesses is that there are a million things to do but never enough in the eCommerce budget to do them. So, you’ve got to prioritize and cut, skim and hack, and keep things dynamic to grow into a thriving business.
And, with the ongoing coronavirus pandemic impacting your budgets and how much your customers have available to spend, there’s never been a more important time to cut costs, boost margins, and make your website as pleasing to customers as possible.
Thankfully, there’s a lot of great opportunities for you to grow now and a ravenous audience for online goods. To help you capitalize, we’re looking at five hacks that you can start doing right now to make running your eCommerce site easier, more affordable, and a little more successful.
These are going to take some elbow grease to get started, but they’re best practices designed to save you money right now and even more time in the long run. So, let’s dive in with our favorite two-fer.
1. Minimize clutter for faster load times
Let’s start with something that’ll impact you in a few ways — all of which should be good!
Get the junk off your website. Streamline down to products, eCommerce checkout tools, and maybe a helpful chatbot to answer some basic questions. Minimize the number of videos and images you use, and instead focus on high-quality ones. Kick outdated site elements to the curb like old Flash players and music.
Your first goal is to get your site to load in just a few seconds. We’ve all heard that you have just a couple seconds to load your site and keep people from jumping ship. However, slower websites also drop overall site loyalty and increase shopping cart abandonment by up to 75%. Every page should load quickly, including your checkout steps.
At the same time, getting rid of all that excess can help your business, too, by giving you less to worry about. You have fewer items to update, fewer things to build for each new product, and less risk of an element breaking and harming your site. You’re also less likely to spend on services that duplicate efforts.
A clean site helps your customers focus on your products. By minimizing plugins and other elements you’re paying for, you can instead invest in high-quality images and faster hosting to keep your site quick. It protects sales and won’t eat up all your time.
2. Create your own comparisons
One site element that we know is worth the time to create — and good for your pages, too — is the comparison. Customers love seeing them because they want to know they’re getting the right product, and they can also feel like they’re getting a deal when your mid-priced product includes all their ‘must-haves.’
There are a few significant benefits here. First, you get to keep people on your website. They can review the comparisons here, instead of Googling it. If you include links to on-site customer reviews/ratings in your comparisons, they get better information and still stay on your site. Next, you’re educating people in a way that feels natural, which builds trust and helps them accept any claims you make about products and options.
You are also priming your site to up-sell customers. People may want something bigger or with more features, or just “the best.” This gives them a chance to compare, find it, and buy it from you. Here’s a great guide on how Apple does this with its iPhones, and a quick look at their site helps you see these elements in practice.
The inclusion of the cheapest iPhone model by default is also worth noting here. By giving someone a cheaper option to compare, you may prevent a customer from abandoning a purchase by showing something in their budget.
If your offering is subscription-based, you have a few ways to differentiate packages or offers. Consider making more expensive options come with more products or features each month. Or, and especially if you’re service-based, try adjusting the way you charge or total amounts. If a customer can by selecting an annual agreement compared to one that charges monthly, you might be able to capture a larger up-front investment.
You know your customers. Look for comparisons that target your best ones across multiple categories and have elements that fit their needs. This way, you’ll be making your best case for each high-value target.
3. Advertise lower-cost goods
You need to build some marketing for your eCommerce site but don’t want to break the bank. So, it might be time to rethink what you use to get people to browse.
Expensive items usually have more competition for keywords and other ad targets. Essentially, your competitors are willing to bid (pay) more to Google and Bing so that their ads are placed next to user searches of product names, categories, and other descriptions or related words (keywords) of expensive and luxury goods. Here’s a good overview of Google Ads.
People spend more because each purchase generates more revenue. Unfortunately, customers also tend to do more research for higher-priced goods (that means more searches), so you may end up paying a premium multiple times to advertise to the same exact consumer. This can quickly consume your overall advertising budget, without necessarily generating sales.
So, if you have lower-cost goods that people still tend to buy or just look at for a while on your site, try using these items as your lure.
You’ll be spending less on their ads while still gaining traffic. There are also opportunities to optimize how you spend when looking across the three main networks: Google Ads, Bing Ads, and Facebook Ads:
- Google Ads has the biggest reach of the three. You can set narrow targets and strict requirements for your ads, but still, see a good amount of searches. However, it tends to be the most expensive option. Basic campaigns are good for beginners and more advanced options are there for power users, but you’ll find a steep learning curve in the middle.
- Bing Ads is typically cheaper than Google Ads but has a smaller reach than Google or Facebook. It also lacks many of the features and support of the other two. Bing has grown to become the third-largest traditional search engine, so don’t overlook it despite those concerns. If you’re targeting terms that many people search but don’t have a big budget, Bing can be a good fit.
- Facebook Ads are generally the cheapest, though the reach isn’t as big as Google Ads. Facebook shines in its advertising tools that are easy to use and it has excellent customer service if you need help. This is especially useful for finding an audience to advertise and then discovering similar groups for your next campaign.
If you’ve minimized page content already, then you can do things like include photos and links for best-selling items on these product pages to entice people to add more to their cart. Or, try adding the higher-priced goods to packages and use those packages in your comparisons.
Use low-cost goods related to your main products to drive traffic for audiences that are most likely to be interested in your money makers.
4. Try to build niche communities
Influencers are valuable to eCommerce stores and other businesses because of the community they’ve created. These leaders target specific groups and niches to create awareness of themselves and offer products that specifically match niche needs.
You can do the same thing — and you don’t have to higher influencers to do it. Learn from them, especially when it comes to the content they create. You’re building more than just ads, by targeting a lifestyle and what people want. On Instagram, for example, people want to look and feel like the influencers they follow and experience the cool, exciting things they’re seeing.
Brands do this all the time as well by curating specific content aimed at those feelings and desires. One of the best things to do is over-emphasize what’s cool and what’s useful. Teach people how to achieve what they want and show them examples of someone making those gains or living that life. Keep promotional items to a minimum so that people are coming to you for advice more often than for products.
You’ll likely need to test out a few niches to see what sticks, but there’s plenty of opportunities here if you build communities. That aspect includes give and take, allowing people to participate and share. If you’re on a platform that doesn’t make that easy, ask people questions or for content like images, and then share these on your channel (with permission).
There’s also a need to interact with others. So, search out hashtags and topics related to the niche you’re building. Again, offer advice or tell someone how cool their post is. Don’t push your sale. Communities are interest-oriented. Become part of the group that shares this interest and treat it like your fandom, not just your brand.
Invite people in to have a conversation with you instead of just delivering a sales message. You just might find a group that loves your take and your products, and their word-of-mouth can lead to eCommerce longevity.
5. Price your entire fulfillment
One of the final pieces you can do to keep your eCommerce operations running as affordably as possible is to do a thorough review of your entire shipping and fulfillment practice. This hack is going to take some time, but, for many, it could yield some significant savings. There are elements you can change internally, or there’s a potential for cost reductions by outsourcing.
Identifying types of cost
What you want to do first is identify your average order. Look at the products it includes, how far away you’re shipping them, and how soon customers want it. Take those products and try to determine how much it costs you to keep them on your shelves until they’re sold — not only space costs for how long they sit there but also labor costs for how much time it takes to unpack them from your manufacturer and place each item on that shelf in the first place.
Next, track labor costs for your order, including picking items off shelves, putting them in boxes, packing them, and then getting that box to your carrier. Other costs to track include pricing for boxes, filler material, tape, and anything else you’re using to pick and pack. Finally, add in the cost it takes to ship your product to a customer.
If you want the bonus point part of this homework, calculate your costs for the physical return of a product, including how much time it takes to unpack and check the products, put them back on the shelf, and then update your inventory count to include these items.
The purpose of doing all those elements is to give you both an individual price sheet and a total cost.
Leveraging your understanding
Once you have your price sheet, look for alternatives to processes where you might save money.
For instance, you might be able to cut money by using different filler materials or moving away from plastic inserts. If you’re paying for branded tape or stickers, but they don’t look great after transit (tell this by looking at returns or sending something to yourself), then you might be able to save by instead adding printouts inside that your internal team can make.
This practice is all about incremental gains, and they can be substantial.
Knowing the full cost of your orders can also help you find a smart outsourcing partner to handle fulfillment and shipping if that’s taking up too much of your time. You’ll be able to tell them exactly how much it costs you to store products, prep orders, and ship them with carriers. Then, you can ask for the pricing of the third-party logistics company (3PL) and see if they deliver cheaper.
Partnerships create opportunities
One area where most companies save immediately is in carrier pricing because 3PLs can generally negotiate better shipping rates — they’ve got the volume of every customer to use as leverage.
However, a smart 3PL might also help you save by making changes to operations. For instance, if you ship something that is very large but very light in a single box, you’ll pay a lot because of dimensional weight (DIM) pricing. The 3PL can help you to minimize box size while still protecting products or may even be able to show you how to ship the product in multiple boxes, which can reduce the total cost per order.
You’ve been working diligently to keep your operations running smoothly and efficiently. Outsourcing can be a smart part of that when you have a partner that also focuses on tight margins and small budgets. Ask vendors their ideas and options and choose someone willing to work with you. The past vendor is a true partner who is willing to share hacks and tricks that they’ve seen help others.
You’ve got many small-budget options
The good news is that you’re looking at multiple ways to improve your eCommerce store without breaking the bank. There’s a lot you can do yourself, or hire a small team to knock out together. Plus, a few work hand-in-hand, so you can see big benefits with a little work.
Consider starting small by reducing unnecessary page elements — and potentially even cutting costs on plugins you don’t need. You can also avoid spending on other sites by building your own content, such as on-page product comparisons. Changes to your advertising can help you identify and create niche communities and audiences, focusing clearly on the people who want to buy your goods. And, there are ways to outsource or partner on your business to cut costs, improve delivery and service times, and keep your eCommerce store something you enjoy running.
Build the website you want to shop at for your next purchase. Clear away everything you don’t want to see or that gets in the way. Make it as easy as possible for customers to purchase from you and reap the rewards.