So you’ve decided to join the eCommerce market. Nothing is holding back your bright idea – whether it’s an innovative car accessory for multitasking on-the-go or a versatile wardrobe piece – except the dreaded concerns of finance.
It’s not the end, however! Most digital startups falter at this stage but it’s nothing if you just plan ahead with some strategy. Here’s a quick and easy guideline to minimize eCommerce startup cost:
1. How much capital do I need to start an eCommerce business?
Not much capital is required to launch an eCommerce business into the realms of success. Young and successful Filipino entrepreneur Isaac Saliendra launched his Lazada eCommerce venture with just 10,000 pesos or US$180. It has now grown into a team of 100 people!
Unlike brick and mortar businesses, you need not splurge on shop assistants to serve customers nor do you need expensive interior design. With eCommerce, you get the perks of low overhead expenses. These are fixed costs on a monthly basis such as rent, machines, and accountancy or lawyer services.Keep overhead costs low by doing these:
- Operate from your home. No office means no extra rent, property tax, and utility bills.
- Buy office supplies in bulk and look for reliable second-hand printers and packaging tools.
- Use free accounting software.
- Learn legal contract basics by reading local law guidelines issued by the government and legal firm websites. Or skip the hassle and join an eCommerce seller platform with readily available terms and conditions to govern seller-buyer relations.
2. Turn your Home into a Warehouse
Startups are often not glamorous at all. Any place with sufficient space, sturdy storage shelves, and a suitable storage temperature is perfect. Entrepreneurs no longer face the boulder-sized hurdle of monthly rent for a place that serves as a walk-in magnet cum warehouse.
Think about small business owners or influencers who proceeded to build their dream empire from their home. They filled up their car garage, hallways, and cars with stock, more often than not delivering the products to customers themselves.
Pro Tip: Check out a time-saving and cost-efficient eCommerce warehousing service called Fulfillment by Lazada. FBL not only stores your products with insurance protection but also runs quality checks, packs, ships, delivers, and monitors stock availability.
3. Focus on Pre-Orders
It may be difficult to foresee trending products among your offerings as a brand new seller. This endangers your sales turnover rate. Startup entrepreneurs are best advised to focus on pre-orders. Pre-orders not only avoid business purchasing mistakes and unsold stock.
They also help you observe and learn about the types of products that your customers like. You get to predict buyer patterns and spot unpopular product listings to discontinue. Additionally, you can identify your ideal customer profile i.e. age, location, gender, hobby, preferred features etc.
4. Do-It-Yourself Sales and Marketing
Sales and marketing can be a slippery slope if your money and energy are invested erroneously. Please do not spend a fortune on social media ads at the expense of essential business expenses such as insurance, emergency savings, and product R&D.
Rather, try using your personal Instagram and Facebook to raise awareness among your friends and relatives first. Keep these in mind when marketing your products:
- Do not practice a direct sales approach. People want to feel that they are in control of their purchasing decisions.
- Post memorable pictures with clear directions on what you sell and which online platform you are selling it on.
- Be active and responsive to questions on a daily basis to build trust and pique interest.
- Offer value at the start of your business with for example free gifts for the first 100 customers, mega discount vouchers for customers who recommend their friends, and free delivery.
Pro Tip: Use LazMall for higher visibility on the homepage if you decide to join an eCommerce platform such as Lazada. You gain free access to unique marketing solutions such as LazLive complete with a live shopping feature within your live video, sponsored discovery ads, and the opportunity to be bumped up in search ranking during sales festivals e.g. 7.7, 9.9, and 11.11.
5. Hire Interns as Staff
Last but not least, here’s a bonus hack to get your business moving fast at minimal cost! Hire interns such as college students or fresh graduates as your staff if you need extra help for packing, uploading product pictures, or a highly responsive customer service.
This is a win-win situation as the interns get to record work experience in their resume while you save cost and time on administrative jobs. Just be sure to be a good manager of your late teens workforce and understand the psychology of Gen Z employees.
Eager to start your business with a reliable framework to assist your warehousing and marketing needs? Join us today and access a wealth of free selling tips in Lazada University.
