A Five-Step Guide to Launching an eCommerce Venture on a Bare-Bones Budget


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No matter how you look at it, starting a business is hard. And one of the biggest challenges that entrepreneurs face is lining up the financing necessary to get a venture off the ground. But there are some ways to minimize the burden.

One of them is to start an eCommerce business. As a business category, eCommerce features some of the lowest upfront startup costs around. And with some additional cost-saving strategies in place, it’s possible to launch an eCommerce venture with almost no budget whatsoever.

That’s quite an attractive proposition in an era of rising inflation, skyrocketing interest rates, and harder-to-come-by venture capital. But pulling it off requires some careful planning and deft management — and it’s by no means easy. To improve the odds, here’s a guide on starting an eCommerce business with a bare-bones budget.

Step One: Choose an eCommerce Platform

These days, eCommerce startups have an easier path to market than other types of businesses. And a big reason for that is the plethora of eCommerce platforms that offer a plug-and-play path to launching a store. Because of them, eCommerce startups don’t have to invest as much in site design, order processing, and fulfillment as they once did.

In fact, many of the eCommerce platforms in the market today will provide everything that a startup needs to begin selling for less than $30 a month. For that price, most offer a complete eCommerce website, payment processing, and shipping functionality. Of course, some of those features come with percentage-of-sale fees — but they do help entrepreneurs avoid many of the up-front costs they’d otherwise have to deal with.

Step Two: Research and Choose Core Products

For eCommerce businesses, competition is fierce. And that often means razor-thin margins and a tough road to profitability. The only sure-fire way around that is to spend the money it takes to develop a new exclusive product. But again, that would require significant startup capital and there’s still no guarantee of success.

A viable alternative to that is to found your store on a handful of products that will create sufficient revenue to keep it in the black. But you can’t just choose them at random. The key to success is to do some detailed and meticulous market research first. Once you’ve chosen a target market, you can begin by exploring the offerings of eCommerce shops already on the market. You’ll want to take note of the products that they all seem to have in common.

Most of the time, crossover between competing stores isn’t accidental. It happens for one of two reasons. Either there’s significant enough demand for those products that there are plenty of sales to go around. Or, those are the products that your target audience expects you to carry at a minimum. Either way, you’re going to want those products in your store. To confirm your selections, you may wish to conduct some simple market research surveys to validate the assumptions you’re making.

Step Three: Find Reliable Drop Shipping Suppliers

Although choosing viable products is essential, you’ll also want to source those products from a drop shipping provider to minimize costs. Drop shippers are like pass-through retailers. You make the sale with a markup from the drop shipper’s price, they fulfill the order, and you keep the difference between the sale price and their price. That way, you don’t have to pay for and keep inventory that may not sell, and your operating costs stay low.

But there’s a big risk involved in working with drop shippers. It’s that your reputation will suffer if they don’t hold up their end of the bargain. So you have to be very careful in choosing suppliers to work with. In general, you’re looking for drop shippers with an extensive history and a solid reputation for following through on orders. Some well-known names in the industry include:

  • Alibaba
  • AliExpress
  • Salehoo
  • Worldwide Brands
  • CJDropshipping

Step Four: Choose a Differentiator

With your store set up and your products selected for launch, you’re most of the way to having a viable eCommerce business. And, you shouldn’t have spent very much money at all to get there. But you still haven’t given shoppers a reason to come to your store instead of the competition.

And here’s where you’ll need to make some strategic decisions. You’ll need to choose a differentiator — something that sets your eCommerce operation apart from the pack — and commit to it. And while it’s easy to choose price as a differentiator, it’s rarely a good idea.

The reason for that is simple. If you’re working with drop shippers, your margins will already be thin. That will make your bottom line and your sales volume quite sensitive to small fluctuations in costs. And that will limit your pricing flexibility. A more-established competitor might then undercut you because they can afford some short-term losses.

Instead, you might choose something like offering superior customer service. But to keep your costs down, you’ll need to do it without breaking the bank. That means finding ways to offer customer service that appears impressive and costly to customers, but that you can operate all on your own.

For example, you might begin with a comprehensive AI-powered chatbot service. You can get started with one that will automate customer service and sales interactions on Facebook, Instagram, and your eCommerce site starting at just $15 per month. That will take care of the vast majority of queries, freeing up your time for more complex customer interactions.

To handle those, you can also offer your customers a dedicated business phone line. They are less expensive than you might imagine, too — with fully-featured cloud-based systems starting at around $20 per month. That way, you’ll have a multichannel customer service operation up and running immediately without adding much overhead to your operation — and your customers will feel like they’re the most important people in the world.

Whatever differentiator you choose, however, you should be ready to pour the bulk of your energies into it. It will be the single biggest factor that determines your success or failure — and is the key to succeeding in eCommerce with a bare-bones budget.

Step Five: Construct a Conversion Funnel

The last thing that you’ll need to do to launch your eCommerce venture is to kickstart the flow of potential customers into your store. And that requires advertising. It’s also where the rest of your startup capital will go.

To maximize the budget you’re working with, the best approach is to reserve it to support a conversion funnel that will lead directly to sales. That will mean your capital will be replenished by the sales it’s used to create. But you’ve got to get some initial traffic somewhere. And for that, you’ll want to turn to some low or no-cost traffic creation strategies.

And once the visitors begin to arrive, you’ll have the data you’re going to need to spend your advertising budget to create a conversion funnel. You’ll use it to fine-tune the journey that your site visitors take on the way to buying from your store. And, you’ll use the advertising budget to support the required digital ad campaigns, email outreach, and influencer partnerships required to feed prospects into the funnel.

Off to a Solid Start

By executing the steps above — and executing them well — it’s possible to launch an eCommerce business with next to no startup capital. And in no time, it should be generating enough money to sustain itself, and then some. It’s a path to startup success that seems tailor-made for this particular moment in economic history. And it should prove quite popular in the months and years to come.

Philip Piletic
I have several years of experience in marketing and startups, and regularly contribute to a number of online platforms related to technology, marketing and small business. I closely follow how Big Data, Internet of Things, Cloud and other rising technologies grew to shape our everyday lives. Currently working as managing editor for a UK tech site.


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