Before you start an e-commerce business, you should make a list of all of the potential costs. However, no matter how experienced you are, it’s not until you get started that you will realize all of the hidden costs. This article will look at some of the hidden costs that e-commerce business owners forget about.
Building your website
Building a website is one of the first costs associated with e-commerce. You might be wondering why this has been included as hidden costs. After all, you can’t run an e-commerce business without a website. However, building the website is just the start because you will also need to pay for web hosting, content creation, a domain name, web development, PPC ads, and much more. Building a successful website isn’t cheap.
PPC ads
E-commerce business owners who want to attract the attention of new customers should consider PPC (pay per click) ads. PPC ads will put your business in the right places to attract customers – i.e. the first page of Google. Although they can be very effective in increasing traffic, many e-commerce website owners make the mistake of putting too much focus on ROI and not enough on the actual cost.
Tax and compliance
Even though the internet is borderless, e-commerce business owners still need to pay taxes and be compliant with government regulations. For example, you can’t just collect a telephone number from customers when they place an order. You also need to comply with regulations about who you are selling to and other checks.
Delivery costs
E-commerce business owners should also consider the costs involved with delivering goods to customers. For example, you will need to look at warehousing and shipping when fulfilling orders. You will also need to think about insurance and e-commerce packaging solutions when it comes to protecting the items.
Shipping insurance
Although it is only one of the costs listed here, shipping insurance should be at the top of your list because you can’t deliver items to customers if they are broken or damaged. Many first-time e-commerce business owners completely forget about shipping insurance. You can find a competitive quote from Cabrella.
Answering the phone
Are you receiving calls from customers and suppliers? If so, then you will need to upgrade your landline or office phone system. Having one phone in the office is a mistake that could cause you to miss important phone calls from customers. If you don’t answer and provide a high level of customer service, you could end up with bad reviews on your site. You may also have to hire extra staff to answer the phones. All of this costs extra money, which will eat into your profit margins.
Customer research
Want to scale your e-commerce business and turn it into a multi-million dollar enterprise? Then you’ll need to understand your customers. This comes from in-depth customer research.
You need to learn about your customers’ wants and desires so that you can improve your product and service. This is one of the main hidden costs of growing an e-commerce business.
Veeramachineni Lalitha
I am Finance Content Writer. I write Personal Finance, banking, investment, and insurance related content for top clients including Kotak Mahindra Bank, Edelweiss, ICICI BANK and IDFC FIRST Bank. My experience details : Linkedin