Stop us if you’ve heard this one before, “You have to spend money to make money!” Most of us have suffered through it so many times we can recite it in our sleep. But, what if you have exactly zero dollars to bring that million dollar idea to life? Not a problem!
We proclaim that you don’t need cash in hand to turn your ideas into cash. And really, since when is having no money a good excuse not to do something? Especially if not doing so means the difference between continuing to work for your jerk boss or becoming your own.
And may we remind you of the humble beginnings that billion dollar brands like Nike started from? Here’s a hint: it’s a car trunk. And, Apple and Google (yes, that Apple and Google)? Garages.
What do you have going for you that they didn’t? $4.5 trillion in ecommerce sales. Right now online shopping accounts for one tenth of all retail sales. That figure is projected to grow 15% each year until it hits $4.5 trillion (with a ‘T’) in 2021.
See, there’s plenty of money to go around. All you need is an idea, some motivation and a bit of bootstrapping to get yourself a slice of the pie.
So, still think you don’t have enough money to launch an online store? It’s our personal mission to show you why that’s a little short sighted. Here’s how to turn your financial restrictions into realized ambitions on a budget!
How to Launch an Ecommerce Business When You Don't Want to Spend a Ton of Money
1. Perfect your product line.
There are a dizzying number of products you can sell (and an equally large number of retailers — online and off — who already do.) The secret to your future success is specificity.
You need to find products to sell that are as niche as the audience you’re selling them to. The more targeted your product offerings, the easier your ad targeting will be.
Let us be clear here — picking the right products to sell needs to be the number one consideration for starting your online store. Some common questions we hear about selecting products for your online store include:
Where do I search for possible product?
Start by researching products on Amazon. Use the best sellers rank in the product description to see how popular it is. The higher the number — the more customers are searching for it.
Google Trends can also be your friend. Use it to see the search volume and, ergo, interest level of said product. (Pro tip: you can pit up to five potential products against one another to see which is generating the most buzz.)
How many products should I sell starting out?
We recommend whittling your list down to about three starting out. This way you can get your feet wet by super concentrating your start-up capital, advertising budget and niche marketing strategy.
Which products are the most profitable?
If you plan to buy in bulk and customize product from there, best to fill your store with Profitable Ecommerce Wholesale Items like:
- Video games
- Smartphone accessories (cases, headphones, etc.)
- Television accessories (stands, mounting equipment, speakers, etc.)
- Fashionable sunglasses
- Children's toys
Of course, you’re just starting out so if you don’t have a lot to spend on product, consider investing in Low-Cost Ecommerce Products with High Profit Margins.
Which products are the most popular?
People change and so do their tastes, but there are already some trending products for 2019 that are selling like hotcakes — including essential oils, novelty socks, personal planners, macarons and more!
How much should I charge per product?
The complicated answer is to price them competitively. The short answer? Try to keep your products priced at $60 or less. For most online shoppers, spending $40 to $60 doesn’t give them too much hesitation before pulling the trigger. Products in this range usually have high conversion rates and can help you clear more profit, too.
But before you laminate those price tags, best to calculate your profitability margins head of time. Subtract product costs from the fees, labor, etc. to find your break-even point and go from there.
2. Do It Yourself.
No, we don’t mean you have to make all of your own product — though that is definitely one way to cut your costs when starting an ecommerce store on a budget.
Instead, take this "soloprenuer" title to heart and get used to delegating to yourself. That might mean learning new skills like accounting or marketing. You may even have to act as your own customer service rep or in-house web developer for a while. Though it might sound exhausting, until you’re able to scale your business doing all the work yourself will keep those hard earned dollars in your business account.
If ever you get overwhelmed, remember that building up your cash reserves is all a temporary part of starting a business with no money.
3. Launch a Kickstarter.
Whatever your pleasure, crowdfunding is king. Platforms like Kickstarter and GoFundMe are making it easier to pitch your business idea to an audience that’s invested from the get-go, not a stingy investment banker.
They’re practically made for consumer product businesses, too. It’s an avenue that’s — first and foremost — free! (A key component when launching a biz on a budget.) It’s also an effective way to pre-sell product and come away with tangible proof of concept. During the process you’re likely to gain some organic PR and word of mouth marketing at no extra cost.
So, whether you want to release an album or make a killing selling athleisure clothes, it gives you direct access to the capital you need without exchanging it for any equity.
4. Apply for a line of credit.
Let’s say you have stellar credit and simply need a small cushion to get cracking. There are some great, low-interest options, especially for first-time entrepreneurs who want to set up a business of their own.
You might consider reviewing the criteria outlined by The Small Business Administration (SBA), an arm of the U.S. government that offers a variety of loan programs to qualified borrowers.
Of course, when you start talking about investment plans that will eventually require repayment, you usually need to come prepared with an ecommerce business plan.
Even though it can technically be as lengthy as you want, we recommend including at least the following eight to nine sections to showcase your brand:
- Executive Summary. We definitely suggest writing it last, but it’ll appear first to the reader. Consider it your elevator pitch. Meaning, if an investor were to read nothing else, what would you need them to know? At minimum, flesh out a mission statement, your core objectives, who started the company and when, what products you aim to sell, and how you’re different from the competition.
- Company Description. Give yourself plenty of room to talk about your qualifications, your broad goals and operations details. Make sure to include a bit about your particular business model, too.
- Products. What makes your products special? Or at least special to you? Talk about the products you currently sell and those you have in the pipeline. Make sure you cover cost also.
- Market Analysis. Show you’ve done your homework and know who your buyers will be. Call out your competition by name and throw in some high-level talk about the state of your industry at large.
- Marketing Strategy. Cover every facet of your communication plan from digital marketing to planned promotions and customer loyalty programs.
- Operational Plan. It may not be the most creative portion of the plan, but it’s still important. Think hours of operation, management, shipping specifics and the like.
- Financial Plan. You’ll be hard pressed to find someone who’s willing to give you money without first having a near stranglehold on where it’s going exactly. Detail your profits and losses (if applicable), operational expenses, assets, scalability, etc.
- Milestones. If you haven’t made your first sale yet, get creative here! Even small victories can count for a lot.
- Funding Request. Here’s where you make your ask.
5. Get social.
It’s no secret that customers are becoming more and more tone deaf to traditional advertising streams. Still, that doesn’t mean you can’t sell plenty of product without paying to play. In fact, between lifestyle marketing tactics, influencer marketing strategies and social media, you pretty much have most of your bases covered.
We recommend you cultivate a presence across as many free advertising channels as possible, but concentrate your efforts on:
- Reddit. But only after you’ve educated yourself about the platform. Trust us, these loyalists can sniff out a phony from light years away. Come on too strong (overly promotional) and you’ll be downvoted into oblivion. Seek out subreddits that are niche enough that your product will be helpful and unique. It might be that you post a blog you wrote on which ingredients to look for in your beard oil or maybe you create a contest specifically for redditors. And yep, you guessed it — there’s an entire subreddit just for those.
- Groups on FB. This is another ‘fine print’ situation, so be sure to read the rules of the group carefully before posting. Violating guidelines could get you banned. You certainly don’t want to join a group and share to the point of spamming. Start by introducing yourself and sharing your story or entrepreneurial journey. You might also try participating in thoughtful dialog with group members. Say one of them has a question related to your industry, you’re encouraged to respond in the comments with helpful information even if that means pointing them toward a particular product. At the very least, it’s a fantastic way to do a incognito little market research.
- Influencers on Instagram. #Sponsoredposts are everywhere. They’re also a great way to get your product into the limelight. This word-of-mouth style marketing is extra effective because it automatically helps your brand appear more trustworthy. Double dose with a bit of lifestyle marketing and you give your customers a sense of what it’s like to experience the good life by purchasing your product. There’s arguably no better way to grow your following in a flash.
- Tumblr. It’s a platform that’s nothing but niche content and perfect for your niche product. It may take a while to feel like you’re gaining traction, but it’s definitely time well spent. The more frequently you post, the better. Part of being an active Tumblr user is also reposting and interacting with other blogs and their fanbase.
We’d like note that there’s value in promoting your product IRL, too. Though you may not have a brick-and-mortar store to host it, throwing an in-person event is a great way to get eyes on your product line. Ask local sponsors and businesses to go in on it with you. It’s a great way to share the costs and double the promotional value!
Listen, if all this seems overwhelming at first, that’s totally O.K.. Just realize that it’s doable, even if you have to nickel and dime things for a bit.
Will you be the next Nike? We don’t know. But neither will you until you start your online store — cash flow or no!
Have any tips for launching an ecommerce website on a budget? We'd love to hear them! Share your thoughts in the comments below.