Be Prepared for These 7 Common Ecommerce Business Expenses
You can help ensure the success of your e-commerce business with a little advance budget planning. Keep your cash flow under control by maintaining flexibility to cover typical online store expenses.
E-commerce Business Planning for Positive Cash Flow
Running an online store requires you to be financially prepared for:
- Paying employees: To maintain your store and keep loyal employees, you need to pay salaries on time. You must also be prepared to hire more staff, as needed, to meet increased demand.
- Carrying the right products: Source quality products from suppliers who can ship promptly and avoid getting stuck with dead inventory. Track what sells at your store and competitors, and keep your ears open for unmet needs among your customer base and target demographic.
- Online selling platform costs: Retail websites, where you host your online store or sell products, all charge fees. Be prepared with enough cash in your business budget to pay these fees, so that you don’t get suspended from a profitable platform.
- Payment processing fees: Like selling platforms, payment portals, like Paypal, also take a share of each sale. These processors and banks generally take a fee from each transaction (from your sales deposits and/or refunds that you returned to customers). These fees may seem small per transaction, but they add up.
- Postage, shipping and handling: These costs are always on the rise, so be ready to pay them and always stay alert for alternate sources for supplies like shipping boxes, padded envelopes or Tyvek “plastic bag” mailing materials. Keep a fund on hand to deal with lost shipments, so you can repay your customer while you’re waiting to be reimbursed for the lost (or damaged) package by the shipper.
- Returns: Even with great products, you will receive some returns. Adjust your return policy so that you keep customers happy without being taken advantage of—and be ready to provide refunds when necessary.
- Technology costs: Software may be costly, but it’s generally worthwhile. The smooth automation, speed and accuracy it brings can help you accomplish more with fewer employees, keep customers satisfied, track sales and make business evidence-based decisions.
If you budget for these major e-commerce business expenses, you’re poised for long term success. For help with business financing, contact the experts at Growth Lending Group today.