5 Steps to Start your eCommerce Business with a Shoestring Budget

Summary: In order to get your eCommerce business started you first need to find a suitable product and research if people will buy this item online in SA. Once you’ve ticked the product box then we explain how to build your site and how to offer your customers secure online payments. With all of this in order we then show you how to get your first sales and how to manage the delivery process to your customers. Read below for full explanations of each of each step… 

Content below written by Warrick Kernes exclusively for the Entrepreneur Magazine. Published in November 2018 Edition

If you’ve been wanting to release your inner entrepreneur but you’re constrained by a tight budget then starting an online store could be your way to achieving this as you can get set up and start taking orders without spending the world up-front. Your online store can be set up by you (yes, even with no prior experience) and you can get it up and running without needing to hire staff or rent offices. Hopefully you’ll need all of that as you grow but for now you can read the following steps on how to set up your online store and start taking orders while doing so on a shoestring budget.

Step 1: Deciding what to sell

If you don’t have money to invest into buying products to sell on your site then consider selling your services to begin with. Ask yourself what it is that you are really good at that other people would be willing to pay you to do? Why not create this as a service and use your site to promote your offer and to let clients book out your time. You can also consider improving your skill level (and how much you can charge) by doing some online courses on the topic.

If you prefer selling physical items then you should reach out to people that you know to see what products your network have sitting idle in their stock rooms. Negotiate with them so that you can list their stock on your site and when a customer pays you for an item, you then go and buy it from them and send it to your customer. This is essentially drop shipping in its most manual form and until the drop shipping infrastructure in South Africa is established hustling for work-arounds is the best way to get your online store up and running without investing in inventory.

Step 2: Decide what website platform to build your site on

Without going into too much detail I can narrow down your options to selecting to use either WordPress or Shopify as your CMS (Content Management System). This is kind of like the skeleton of your site where you add all of your content on the back-end where it’s organised before you publish it to the front-end which is what your customers see as your website.

 You can start up a WordPress website for free whereas Shopify starts from $29 per month. For those that are capable and experienced with websites I’d suggest WordPress but for those that have limited experience with websites then setting up a Shopify site is an easier solution that will save you a lot of time to get started. Either way, don’t be intimidated by the process as the set-up wizards will take you through step-by-step on how to build your website.

Step 3: Taking online payments

Setting up your store to take online payments is much easier than you might think. From day one you can enable manual EFT payments and let customers pay you by EFT (but only dispatch the order once the payment has cleared!) so this allows you to start taking payments straight away.

 Next you can easily apply for an account with one of the South African payment gateways. The account can take up to a week to be approved and they’ll guide you on how to set it up on your site. Once this is done your customers will be able to pay you by credit card, instant EFT, Bitcoin, Mobicred, Zapper and more.

If you don’t yet have a business bank account, don’t let this slow you down as you can start off by linking the payment gateway to your personal account and then you can change it later once you’ve set up a business bank account.

Step 4: Getting your first sales (with zero budget)

Here’s a few “low hanging fruit” tips for getting easy traffic to your online store to help generate your first few sales.

 Share your new site with everyone you know. Use any social media networks you may have to announce your new website to your friends and family. Start by asking them for feedback (so they don’t feel that you’re pushing them for sales) then ask them to share your products with anyone they know who might be interested.

Offer Launch Specials. Now that you’ve got some eyes on your site generate urgency by offering a “launch week 15% discount”. Apart from driving sales this also lets you test your payment & delivery processes with people who won’t get angry if things don’t go perfectly. What’s more, you can reach out to these first buyers for product feedback which will be super helpful before you start selling to unknown customers.

Validate your business on Google. Visit google.com/business to add your business details to Google Maps. Once this is approved your business details will show on the right side of the Google results when people search for your brand. This is a great way to build trust and traffic.

Build your newsletter subscriber list. Your exposure to your social media followers can be limited by changes in the rules of each platform. Your newsletter subscribers however is the only list which you own and control so it is vital to build this list from day one. It’s a fantastic place to launch deals and subscriber specials and to engage with people who’ve signed up to hear more from you. A great way to grow this list is to offer a free “lead magnet” which people need to subscribe before they can access it. The best “lead magnet” is a content offering which is truly helpful and desired by your potential customers so try to get creative and think of what you are willing to give away for “free” to build your database.

Learn the basics of SEO. Don’t let yourself be intimidated by the big topic of Search Engine Optimization. If you can learn a few key principles on YouTube and then build each part of your website with this in mind then you’ll see a massive long term benefit as each part of your site will climb higher in the rankings in the future. Don’t forget to submit your sitemap for indexing skipping this step will massively delay your websites’ pages being properly ranked in Google.

Step 5: Delivering your order fast and cheap

Trying to use the South African postal service to deliver to your customers may sound like a cheaper alternative than couriers but it’s really not an option as their service is often hit and miss. Customers will also abandon orders on your site if they see that you’re not using couriers to deliver to them.

You need to engage with the courier companies in your area to see which ones offer the best service at the fairest prices. If you’re in a big city you should be able to deliver within the city for around R32 and to other major cities for R45 on an overnight delivery service. Delivering to customers in outlying areas does become more expensive but you can investigate couriers which offer drop-box options so that you’re rural deliveries don’t cost more than R99.

Of course the larger the item the higher the delivery cost can be but if you’re shipping bulky items like fridges or couches then shop around for the best prices as you should be able to offer nationwide road-freight deliveries at no more than R250.

 There are some very clever companies in South Africa which are offering aggregated courier quotes where you can book through their service and benefit from their mass negotiation with the respective couriers. They can get as much as 35% discounted off the normal rates and this is passed onto you. These systems can also be integrated into your website so that everything runs seamlessly – like true eCommerce should.

 South African customers are generally happy to pay for the courier fees on their orders up to a certain shopping cart value. The general rule of thumb is that you ought to offer free delivery on orders over R500; however, you need to know your numbers to ensure that the average shipping fee can be absorbed by your gross profit margins once the order value reaches over R500.

Building your own website on a shoestring budget is not only very possible but it’s likely to be easier than you expected. Aim for progress instead of perfection, you’ll have plenty of time to fine-tune everything once your site is live. Getting your website live sooner rather than later helps you to recoup some cash from kick starting your sales, it allows you to get feedback from your first customers which you can use to improve the final site plus getting your first few sales will validate that people are willing to buy what you’re selling and that you’re on the right track. Good luck!

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