When setting up an online retail business, there are a lot of factors to consider. You’ll have included several areas into your budgeting and planning, but there are lots of little areas that you may not have thought of.
The main areas of spending will be the product, payroll, warehousing, shipping, e-commerce, and all of your business rents and rates. But when you break it down, you should be overestimating your start-up capital.
Here are some things that often get overlooked when creating a business plan. It is a non-exhaustive list, and you may find that there are many more relating to your particular area of specialty.
When you think of payroll costs, you will probably be considering the number of hours you feel that your workload will require. It can be hard to visualize this before you start trading, and you will find that you will need to tweak your staffing budget as you progress. But, assuming you have experience of moving the volume of stock you intend to, then you will know how many people you will need, and for how many hours per week.
The often forgotten allocation of budget in this area comes from training and development. If you want your team to perform to a high standard, you will need to invest in ensuring they are fully competent and compliant with the expected standards. This takes time and money.
Recruitment can cost money too. If you need to hire the skills of an experienced recruitment firm to help you fill your roles, this can be costly.
Shipping may be an area that you hadn’t given much thought to when setting out your budget. Very often, shipping costs are paid by the customer anyway. And usually, free shipping is only used as a loss leader on more significant sales.
And while the cost of the packaging itself is minimal and can be passed on through the shipping costs, you will need to initially hire the services of packaging design companies to help you get the right boxes for your products.
When it comes to products, you will need to include a margin within all of your costings for breakages, demonstration models, and faults, if you are lucky enough to have returns arrangements with any suppliers, then this will help. However, your margins can be increased on orders where you are unable to return.
So, you’ve found the perfect website hosting company. You know what you’re getting. You’ve paid for your web designer to come up with a work of art. But there are so many other things to include in your budget. There will be domain registration fees; you may need to increase your available storage. You’ll need to optimize your site to ensure your pages load quickly continually. You will also need to pay for search engine optimization to generate traffic to your site. Social media sponsored posts are a vital tool for any business, particularly as you establish a following.