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The Ultimate Save Or Splurge Battle of Running an Ecommerce Business

Updated on March 28, 2019

7 Min Read

When you’re running a business, it’s natural that you will try to save wherever possible, but it’s not easy to know what parts of the process can be done with a smaller budget and which ones require investment for your larger success.

Battle of Running an Ecommerce Business

 

What works best for your operations may be a little different, but this splurge vs. save guide will help you decide on which parts of the store you should invest money to increase sales, decrease operational costs, and prepare yourself for enormous success.

Guide to Starting an Ecommerce Business from Scratch

5 Times You’ll Want to Splurge

Market Research

Before moving forward, here are three most important questions you should ask yourself:

  1. Who uses your product?
  2. Why do they use it?
  3. What do they say about it?

Answering these three questions should guide everything else you do with your store this year. If your customers are predominantly women in their 40s with children, then you know who to feature in your site images and on what other sites you might want to advertise.

The “why” question tells you the things to highlight about your product on the page, in your photos, and in your ads. Remember, this is a deep “why” that goes beyond the basics. For example, kids don’t use the T-rex grabber claw toys to reach things; they use them to have a dinosaur to bite things or to feel powerful and play – tell this to moms who have small children through your featured display section.

The final question is, best way to understand how you are doing business. Some instances include: “Love the product, wish it got here sooner,” could mean you’re having problems with order fulfillment. “It makes cleaning up after the kids so easy I feel like a superhero” is now your new marketing slogan.

One of the best things you can do is grab a free word cloud tool and run as many reviews, tweets, comments, and other notes about your product through it. Look for the words that are used most often and then incorporate them in your site’s content and marketing collateral.

These words are what your customers are saying about you. So, why not use them in marketing your products? Let them know that you are listening to them so that they know what you feel.

Site Design

Even if you’re using a platform to put your site together, the design of your website and interface are paramount. Because if things are hard to see, understand, and use, then you’re harming your potential revenue.

Site designs should flow from interest elements like a sale landing page or fashion style or category page to individual product page to the shopping cart. Buttons and layout should naturally help users progress, which means adopting design patterns such as F-pattern and T-pattern so people’s eyes naturally flow when they browse.

High-Quality Writing and Photos

Bland copy is boring, and it doesn’t sell. If you’re writing with no clear target in mind, then your customers aren’t going to feel like you understand them.

For example, a feature list isn’t beneficial if it doesn’t tell what are the benefits of your product or how it’ll make you feel, which means you’re asking the customer to do the arduous work of figuring all that out.

Write a story about a product, not just a list of measurements.

Photos are also part of this storytelling, and higher the quality, the better. When possible, show people using the products at least one of your slides for each product. While this is most commonly used in fashion, it’s a useful product rule for anything out there.

Photos also give you a chance to show people how happy they’ll look or be when using your product. You can use other marketing tricks too in photos, like how the inclusion of a dog makes someone seem happier and more likable — a trick Hollywood uses in bleak films such as I am Legend.

Things That Simplify Your Shop

There are countless apps, plugins, tools, and software available for your ecommerce store. That’s why deciding which ones are worth the purchase is extremely difficult.

In most cases, something that simplifies your business operations and your customer’s shopping experience is the best bet. A chatbot that automatically answers frequent questions or can share a size chart is great for most sites. Order fulfillment tools that automate the tasks and are easy to track also tend to save money by making orders more accurate and helping ship products more quickly are also a great purchase.

Have someone test your funnel from landing on the site through purchase and see what takes them the longest. Focus on that area for improvement, and see what makes things easier for your customers.

The good news is that most apps now offer free trials, so you’ll have a window to test before investing actual amount.

Lookbooks, Videos, and Demos

Show the customers your products in action. For fashion items and accessories, a lookbook is perfect showcase your collection. Add items that are within trend to entice viewers. The fashion category has a lot of potential because it is expanding rapidly. Fitbit, for example, created a series of lookbooks for its many different health trackers.

If your product requires a lot of actions to operate, show it to the user. Record a video of someone using it, so the buyers can get a feel of how they will look while using it — this is especially useful for ready-to-wear items and you can either do it yourself or hire one of the many YouTube influencers to create amazing content for you.

What is Ecommerce with Examples | Ecommerce or E-commerce [2019]

Here Are 5 Places to Save

Your Own Warehouse

Warehouses are expensive. You’ve got to rent or buy the space, equipment, software, and packaging materials for every order. Next, you have to pay for the staff for core business tasks. Ecommerce businesses often have months of lean and plenty order volume, which means you need to calculate what you can afford and when.

In many instances, it’s more economical to find an order fulfillment partner who can promise on-time, accurate deliveries regardless of your sales volume. That way, you can budget accordingly and not get stuck with high rents that you don’t need or to scramble extra space when things really take off.

Freebies You Send

A great product doesn’t have to be expensive. It can be free and simple, and people will enjoy it all the same. And, sometimes people don’t necessarily want more expensive items. A free t-shirt with your logo is often more expensive than a notepad with your logo and a quirky list at the top.

Go back to your marketing data and make sure you’re sending the most useful or desirable item to your customers.

Sometimes you can even get away with giving something out that doesn’t cost you. In your next set of shipments, add a business card-sized coupon that offers customers a free item. All they have to do is email you about it to get the gift. You get the goodwill of a freebie with an offer that not everyone will use — saving you money compared to simply including the freebie no matter what.

Marketing Images You Make

High-quality photos and content on your website shouldn’t be skimpy, especially when starting out. These are mandatory for sales volume. The same is not true for your marketing if you have a strong social following.

Campaigns with branded hashtags, pins, or boards are a terrific way to get your name out there while inviting your customers to create those images and videos for you. Reach out, broadcast the message, and see what they create. Building a contest around it is a great way to encourage a lot of results that you can then freely use.

Determine the cost of hiring a photographer and models for artistic and action shots, now compare it to the cost of the product you want to provide to the contest winner.

You can further see your ROI by looking at traffic gains and how much people are talking about your brand compared to normal. The word-of-mouth benefit you get from a social contest, and social shares are included in that cost of your giveaway item. You would likely have additional marketing costs to gain that reach if you were going the traditional route.

5 Important Startup Costs That You Should Know About

Pushing PPC Campaigns

Pay-per-click ads are luring and devilish with their promises of landing thousands of eyeballs and making you the envy of your competition. They are pitched as a silver bullet that can do all and be all, no matter what people are searching or where your customers live.

Don’t splurge on ad hype. It’s not just PPC, but this tends to be the ad unit we see the most being touted as the magic cure for a sales slump. You’ve probably heard of it as a way to turn your business on autopilot and pump out the sales.

Again, you’ve got to do your research and find similar customers who have had actual results from the PPC campaigns or companies you’re considering. There are more organic ways to market, such as local SEO focuses, that could generate better results without hamstringing your budget.

Another reason to be wary of a PPC company is that their fees can hurt your business, especially if you’re dropshipping and already have slim margins.

Outsource When You Need To

Here’s something that’ll seem like a splurge but is actually all about savings. Outsource tasks when you grow too big. If you’re spending all your time on menial tasks, then you can’t focus on the larger picture of improving your company.

You might think that answering calls and emails is “free” if you do it yourself. However, if you break out what you take home each week into an hourly amount, you’ll see that it isn’t. And, when your business is starting to do well, you’ll see that the time you focus on selling brings in a lot. Put the right people in the right places, and you’ll see this value increase even more.

One final note on this is that you want to outsource smart. If you hire a virtual assistant to perform customer service tasks, make sure they speak your language natively. Don’t go for the cheapest option if it isn’t quality, because this will reflect poorly on your brand.

There are plenty of ecommerce experts out there ready to help, so start the search and find someone who can help you grow.


Disclaimer:

Jake Rheude, Director of Marketing at Red Stag FulfillmentThis is a guest post by Jake Rheude is the Director of Marketing at Red Stag Fulfillment, an ecommerce fulfillment warehouse that was born out of ecommerce. He has years of experience in ecommerce and business development. In his free time, Jake enjoys reading about business and sharing his own experience with others.

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Sajjad Shahid

Sajjad is an Ecommerce Community Manager at Cloudways. He loves helping out Ecommerce store owners, merchants and marketers in establishing their businesses and startups. Sajjad enjoys playing table tennis and cricket over the weekend.

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