Entrepreneurship & Lean Startups / Everything E-commerce / Lifehacks

3 Tips On Being Cost-Effective: Advice To Those Of You Hoping To Start An Online Business

Everything E-commerce 1

I’ve decided not to procrastinate further, and kickstart a category of articles that I should have started the moment I started Crazy Curious. Recently I’ve received quite a few emails with regards to e-commerce, and how to get things done more quickly and effectively, and that was the last push I needed to start this new category, where I hope to share with you growth hacks, tips and lessons I’ve picked up during my 5 years in the e-commerce (specifically online fashion for women) side of things.

A common theme I come across is: What are some areas you should be aware of when you are thinking of starting an online business? The advice I’d give before anyone starts out is to adhere as closely as possible to the lean startup methodology. Spend as little of your financial resource as possible at the start, and increasing your amount of investment as you start to earn so that you have a longer run rate before you start feeling the burn.

That may make a lot of sense, but I also understand how it may not be as apparent from the start, especially for those of us who came from a corporate background where startup thinking may not be that commonly practised. So if you’re just starting out, think about how you can minimise your cost on the overheads. That’s one of the main reasons why you chose to go into the online business space as opposed to opening a brick-and-mortar store, isn’t it?

So here are some areas where you can really shave off on the overheads:

1) Do you really need to hire web designers?

Yes, you want to have a strong branding, beautiful look and feel, blah blah. But honestly, is blowing $5,000 to build a “proper” website with a professional shopping cart really the best way to be spending your money? Some cost-effective ways of getting good results may be to consider turnkey solutions like Shopify, which has amazing themes (that comes with different affordable pricing plans) that serve as a great starting point for new online business owners. Another option to consider is TackThis, which provides end-to-end online retial solutions and are eligible for PIC grants.

2) Is manufacturing your own designs at the start the right way to go?

I know that there is this thinking that manufacturing your own in-house designs, complete with your brand labels is the way to go if you want to build your branding. I personally feel that that is a misconception, because what that does is that it strengthens your branding. If you don’t have a branding to begin with (and no one does at the very start, unless you are backed by a large fashion house), what’s there to strengthen? So instead of bearing HUGE inventory costs and risks by manufacturing your own designs (approximately 100 pieces per design minimum), consider getting pieces for your first few collections from quality wholesalers, and build your brand through other avenues like strong customer service, website look and feel, quality of apparels, marketing copy, beautiful photo shoots… Otherwise you may find yourself in a situation where you are stuck with close to a thousand pieces of apparel that don’t seem to have an audience.

3) Should we splurge on marketing to get the word out?

I have spoken to quite a few blogshop owners who told me that they have burned quite a bit of money on reaching out to every single blogger they can possible think of, and also taking the traditional media approach i.e. paying in excess of $5,000 to get a page in female fashion magazines, etc. My usual response? If you are not Zalora, you don’t have that kind of money to blow. Instead, decide which segment of the market you are going to target and penetrate, and plan your marketing and outreach strategies accordingly. Also, throwing money at potential outreach channels isn’t the only way to go. I personally have increased communities from 3,000 to 10,000 in a span of 1.5 months, and at close to zero cost.

I’ll be sharing on go-to-market strategies that will focus more on choosing your target market segments, and what you can do to grow your community (or customer base) in my next piece. Stay tuned for that one!

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