You have a passion for starting an online business. You want to start selling online and gain your share of the big US$ 74.8 billion Indian e-commerce market.
The problem? You don’t have a significant amount of money to start an e-commerce business. As a part of learning how to start an online business, finding a good idea is just half the battle won. The other half is paving the way for funds to come in and support it.
A market-oriented e-commerce business idea with less capital does not mean the end of your path to entrepreneurship. There are several ways you can follow to start a business with less money by your side. In layman terms, having less money simply means you need to use it wisely to build your e-commerce store.
If you have the much-needed entrepreneurial mindset and the willingness to test new things, let’s get started. Here’s a complete guide to help you learn how to do online business with less money. From finding the right business model to creating a brand and promoting the same, you can get your online store up and running – even if you are cash-strapped.
9-step guide to starting an online business with less money
Select products that you want to sell
The first step toward planning how to start an online business with less money is to choose products that you want to sell online. The next criterion they should fit in is your budget. Indeed, it is a challenge to find profitable, in-demand products that will sell online. Coming up with product ideas can leave anyone stuck in analysis paralysis. You may feel everything you could possibly sell is already available online.
Fortunately, you can still find golden opportunities by tilting the way you look at product selection. To finalize product(s) for your e-commerce store without spending a lot of money, you should:
- Solve a customer’s pain point
- Look at the consumer needs around a particular hobby or trade
- Consider your passion to find a product-market fit
- Consider your existing experience and knowledge
- Recognize trends around which the product demand would hold for much longer
- Read reviews of popular products to find what customers actually like or dislike
- Browse online marketplaces to see what’s trending
- Look at the profit margins of products you want to sell online
Choose an economically-feasible business model
The business model, in simple words, describes how you will sell the selected product(s) through your e-commerce store. A good business model can provide a customer value proposition, help understand the demand, attract investments, and even provide a sustainable competitive advantage.
To learn how to start a business with no money or less money, the following table explains the different types of business models you can choose from:
|Makers or manufacturers|
|Print on demand|
Create a business/marketing plan
An e-commerce business plan for your store details how it will attract customers to make money selling selected products. Hence, you need to create a business plan to encompass various sides of the business to work around minimum investment, including:
- The structure of your business
- The process to source inventory
- Business license procurement wherever required
- Competitor analysis
- Budget planning for inventory, operations, and marketing
When you are done with creating a basic business plan, spend more time elaborating on the marketing plan with less money by your side. It should detail your target market, cost-effective channels for outreach, and most importantly, organic reach to your customers.
For example, which social media channel do your prospects use the most? What type of content do they engage with? How will you drive them to your e-commerce store? Your marketing should be able to answer these questions.
Build your online store
To sell your product range online, you will need an e-commerce website for buyers to explore, browse, and purchase your inventory. Selling through an online brand store is much more advantageous than starting with marketplaces as it will give you more control over the customer experience. These days, you can select online e-commerce platforms like Shopify to begin your journey as an online store owner.
These website builders are quite easy to use and set up and you do not need technical expertise to launch a basic online store. Whether it is design, security, or mobile-readiness, the platforms will take care of it all for you.
Recommended Read: Shopify Payment Gateway: The Ultimate Guide
Finalize the product shipping strategy
The next important question you need to ask yourself – How will you get the ordered items delivered from your store to a customer?
Since you are already short on investments, it makes sense to leverage the already-established network of logistics service providers in India. You can integrate their logistic system with your e-commerce store to initiate a pick-up/delivery request every time an order is placed.
This level of automation in managing the shipping side of an e-commerce business is quite easily accessible. All you need to do is to pay for the logistics services rendered as per pre-defined rules based on the weight or dimensions of products. It is up to you to decide whether to pass on the delivery fee to your customers or bear it yourself for large-ticket items.
Price the inventory of your e-commerce store
For many business owners, one of the most difficult things about learning how to start an online business is pricing their inventory. However, this can be simpler if you follow this step-wise guide and have different financial inputs right in front of you.
From the cost of raw materials or sourced products to hiring a team for operational management and logistics costs, you would have the individual costs clearly visible to you. All you need to do is sell your offerings for more than what they’re costing you.
You can consider various product pricing strategies like:
- Cost-plus pricing
- Value-based pricing
- Competitive pricing
- Penetration pricing
- Price skimming, and more
Set up the most suitable payment gateway
Once you are done setting the pricing of your products, you need a suitable payment gateway for your store integrated into your website to facilitate payment acceptance from your customers.
While there are several payment options available for your customers, you can make most of them available via a single, unified payment gateway. This will also ensure that your buyers do not leave your store just because you do not accept payment via their preferred payment options.
At the time of selecting a payment gateway, consider:
- Payment gateway charges
- Number of payment options supported
- Ease of integration and activation
- Payment success rate
- Ease of extending brand or bank offers to your customers
- Ease of setting up subscriptions
Start promoting your e-commerce store
Once your budget-friendly e-commerce store is up and running, the job isn’t over. You need to work on promoting both the brand and products to increase the odds of prospects stumbling on your store. The more e-commerce website traffic you can attract, the higher the chance of making money online.
Since budget is a constraint, you need to focus more on low-cost or no-cost promotional activities, such as:
- Guest posting on relevant third-party websites or blogs
- Getting featured in entrepreneurial blogs and news sites
- Paid advertising on social media channels to build brand awareness
- Organizing time-sensitive sales to offer discounts on the first hundred or thousand buyers
You should also invest in creating valuable content for your potential customers to increase the organic reach of your brand.
Optimize your store for better results
You will only learn more about how to start an online business once you have taken the first few steps and made your brand live. Although a low initial conversion rate can be expected, this also gives you insights into what your customers are really looking for. You can then optimize both the offerings and overall customer experience to squeeze more revenue from those who choose to buy from you.
You don’t always need a big bag full of cash to start an e-commerce business
Starting an e-commerce business with less money is more about managing what you want to sell and how you want to sell by keeping in mind that budget-constraint always. There is no rule that those who start small cannot grow big. Select the right products, choose the right business model, and work around a minimal budget under a solid business plan.