To start a brick-and-mortar store, a huge investment is required, which consists of the costs of taking up a physical shop for the storefront (even a small space can cost a lot, maybe around $30,000) , monthly rent, security deposits, operating costs, IT costs, utilities, inventories, marketing costs, and cost of hiring employees, among other expenses. However, it isn’t necessary to spend gazillions dollars
But in the case of starting an online retail store, not much financial investment is essentially required and it it possible to start it even with a teeny-weeny budget. Here are a few things you should consider if you are planning to start an online store with a tiny budget:
Choosing a product– When doing this, select products that have a relatively small amount of competition and an audience that is easy to target. Come up with a niche product by combining a theme with a popular product. For example: environment friendly backpacks, luggage protectors, gardening tools, DIY supplies, educational kits, unique beaded necklaces, handmade jams, wood apparel, Bluetooth wireless speakers, etc. Stay away from commoditized products that are high on competition. However, don’t go so far that it gets too niche. Also, try focusing on the products that have the highest interest rate and the highest profitability margins. To start off with a tiny budget, choosing fewer products will prove to be a wise decision since that would reduce the advertising and other costs of maintaining them.
Determine whether you want to drop ship your products or not– Drop shipping is considered an ideal business model because it allows online retail businesses to save time by eliminating inventory handling and shipping efforts. But, well, there is a dark side to it too, which is that the profit margins decrease since you will need to pay the supplier to store the inventory and ship the products for you. If you have a tiny budget and is looking to save money more than saving time, then consider shipping products yourself. Once your business grows and you scale it up, you can opt for drop shipping. It isn’t a necessity right in the start.
Decide where and how you want to sell products– You can choose an e-commerce store platform (third-party marketplaces, for example, Amazon, Ebay, etc) to set up your online shop and promote the store online. Also, you might buy your own domain and connect it to an e-commerce store platform. For example: eBay is an online store platform where you can post pictures of your products and start selling right away. Further, you can get your own e-commerce site developed to sell your products.
Use social e-commerce integrations– If you want to extend your brand’s reach and make it popular, social e-commerce is a great way of doing so. Professional e-commerce development agencies can help you in this. It involves the use of social media to assist online buying and selling of products and in turn, boost sales. Some of the most popular social media platforms include Pinterest, Facebook, and Instagram, among others. You can make benefit of the “shop” option of FB page, or you create some buyable pins on Pinterest to share on your boards for users to discover, or introduce buyable posts to all users with your Instagram presence.
Build more as your business grows– By bootstrapping, you can start your online store under a tiny budget and as it keeps growing and makes continued profits, you can scale it up by integrating more e-commerce tools and automation features & advanced functionalities. In the starting, you can eliminate unnecessary costs by doing maximum activities by your own and not by third party service providers and suppliers.
Registration– While registering your online retail business, you can either register it as an LLC (Limited Liability Company) or as a corporation against private ownership as that will help you save a considerable amount of costs.