Best Ways to Lower Your Ecommerce Business Costs in 2024

It’s expensive out there. Running an ecommerce business can be costly, especially if you want to stand out in an increasingly competitive market.

Your online business needs more than just a beautifully designed website or a sassy newsletter to capture customers. It also needs smart tools designed to help stay efficient and save you money in intelligent ways so you can constantly refine your marketing, customer communications, and service offerings.

Saving money is not the same as cutting corners. It’s about optimization.

A proactive and strategic approach to stretching your funds in all the right directions so your business stays healthy, especially when it comes to the software you use for warehouse and inventory management, and your shipping costs.

The goal is to find a way of helping your customers, and yourself. It’s tough maintaining profit margins in an economic climate marked by inflation.

From customer service to operational excellence, you can use these tips to manage your finances, grow your business, and so much more.

Further reading: Building a Smarter Future with IoT in Warehousing

1. Strategic thinking

When you are paying attention to your ecommerce costs on a strategic level, you’re focusing on how you can save money in smart ways that boost your business.

Discounts, bundle deals, and special offers are superb marketing tools because customers love bargains and you can use these as an opportunity to build customer loyalty.

The added advantage here is you can bundle stock that hasn’t sold well or is taking up inventory space with relatively popular stock so you can clear the space for new inventory with better margins or sales track records.

Consider bolstering these offers with customer communications designed to deepen their loyalty and engagement.

An email giving them insight into how they can use the products, a newsletter that sells the bundle and gives top tips on getting the most from it, and a discount code to use on another purchase. These are all strategic ways of building customer loyalty while equally moving stock and gaining sales.

2. Transform your shopping experience

From shopping carts to micro-copy, you can invest in small things throughout your online store that make it so much easier for customers to find what they need, and pay for it.

One of the biggest challenges facing many ecommerce businesses is, of course, shopping cart abandonment.

However, you can potentially reduce the number of abandoned carts or lost shoppers with these ideas:

Use micro-copy throughout your site

These small content signposts can make it easier for customers to navigate through your website, find what they’re looking for, take advantage of special offers, and even buy things they didn’t know they needed!

Tell people more about a product, encourage them to click through to special offers, give them the digital equivalent of road signs, and make their journey an engaging one.

Transform the final stages of checkout and payment

People will leave if your checkout is clunky, asks for a ton of information, or has limited payment options.

This is especially true if they’re making an impulse purchase! Imagine clicking on a special offer, thinking ‘Gosh, I really want this!’ and then having to go through a ton of steps before you can buy it?

Make life easier for your customers, it will keep them coming back.

Connect with abandoned cart customers, within reason

Don’t send an abandoned cart ‘Where are you?’ email every day for six weeks (this has happened) but do check in with your customers and give them a reason to return. Maybe a percentage off their purchase? Or a special offer on another item?

Make your entire process as transparent as possible

Keep your customers connected every step of the way. Consider giving people automated updates that confirm payment, delivery dates, and shipping timelines.

Also, ensure there is a lot of visibility around shipping costs from the outset – shoppers can get frustrated if they think they’ve landed an amazing deal only to discover they have a hefty shipping cost attached. Either include shipping or keep the costs as visible as possible.

3. Collaborate with your suppliers

Like you, suppliers are looking to make money and build their businesses, so consider working with them to get discounts on bulk orders, early payments or regular orders, for example.

If your store isn’t big enough to order enough stock to qualify for a bulk discount, you could try and get a discount because you pay on time or in advance.

Spend time building these relationships and find ways of saving money that benefit both of you – certainly, a supplier will appreciate a regular customer and this could translate into savings.

If you do end up going for a bulk discount, remember to check how much it will cost you to store the items. You don’t want to end up paying your bulk discount savings in storage fees.

4. Minimize the risk of returns

Returns are expensive. You have to bear the cost of restocking, handling, and postage which do add up over the long term.

The other issue with returns, of course, is that they are the result of an unhappy customer, and the impact of that is potentially lost revenue if the customer leaves for good.

There are several core things to consider here:

• Reduce the chances of a return by making sure that every product description, special offer, and marketing communication is crystal clear. Measurements, sizing, weight, color, fabric, cost – anything that could be seen as misleading by a customer should be clearly outlined and described.

• Make your product pages and advertising detailed with beautiful pictures and descriptions. Use videos if you can as these showcase your products and avoid the risk of unnecessary returns.

• Build relationships with your customers through regular communication and shipping updates. Just as mentioned earlier – the more transparent your costs, processes, and shipping timelines are, the more engaged people will feel.

• Finally, if you can’t avoid returns completely, make them seamless. If customers are so unhappy that they want their money back, give them an experience that makes them willing to try shopping with you again. Give them an easy process to follow, simplify shipping, send them clear communication, give them every reason to return with a special discount or code, and let them know that their feedback was invaluable. Loyalty can be built from mistakes as well as successes.

Further reading: How To Design Your Warehouse Layout For Maximum Efficiency

5. Reduce your shipping costs

Customers appreciate low shipping costs. You’re a customer yourself, don’t you love it when you make that perfect purchase and the shipping is at an amazing price point?

This means you need a cost-effective shipping solution that works with your business so you can grow and keep your customers happy.

Veeqo is a free shipping software for ecommerce, that's not only part of the Amazon-family, but also gives you access to the lowest commercially available rates, based on our pre-negotiated pricing from UPS, USPS, FedEx, and DHL and up to 5% back with Veeqo Credits.

Free to use, Veeqo gives you immediate access to these rates, or you can simply bring in your own hard-won, pre-negotiated rates for free and enjoy all of the other features Veeqo has to offer.

Ultimately, if you can lower your shipping costs, you can then throw this benefit and cost-saving straight at your happy customers and they will keep shopping with you. Plus, you get to enjoy the savings which translate into a far happier bottom line as well.

6. Reduce stock-outs with inventory management software

To further reduce costs, make sure you pay attention to the way you manage your inventory.

There are few things as frustrating as ordering and paying for an item only to get a message telling you it’s out of stock.

Further reading: How to Choose an Inventory Management Software

It comes across as unreliable and can affect your reputation and your profit margins. Having to reimburse people because an item is out of stock after they’ve paid is expensive and time-consuming.

When you use a trustworthy inventory management tool, you can maintain an eagle eye over your inventory which means less spoilage, reduced risk of stock-outs, and improved storage management.

The right inventory management tool (like Veeqo) will give you:

• Automated manual processes so labor-intensive tasks like typing out product numbers, updating stock levels, and recording data in spreadsheets is completely automated. This saves you so much time and reduces errors – it also gives you more free time to focus on customer engagement and retention.

• Data visibility through the integration of third-party solutions like point of sale (PoS), barcode scanning, accounting software, and other equally important technologies. When you can access the data from all these systems in one consolidated dashboard, you get to enjoy data-driven decision-making and reporting that can transform your business and your sales. It will also help you find all those areas of overspending or where you can refine processes to save money.

Further reading: Benefits of inventory management software

7. Let Veeqo do it

We can help you build a resilient business with smart tools like Digital Picking, and functionalities designed specifically for the world of ecommerce.

Our powerful multichannel inventory management tools and shipping software are centered around improving fulfillment efficiency and customer satisfaction. Using Veeqo's software helps you prevent stock-outs, forecast customer demand, automate inventory tasks, and keep inventory up-to-date across all of your marketplaces, stores, and locations.

Veeqo is also completely free to use with no monthly costs and no hidden fees. You'll also get up to 5% back in Veeqo Credits when you buy your labels through Veeqo. One of our sellers, A1 Great Deals, earned over $13,000 back in Veeqo Credits between September 2023 and April 2024.

A1 Great Deals and another of our sellers, toy retailer eChapps, previously used multiple pieces of software to manage their shipping and inventory. Since switching to Veeqo they've been able to get rid of two costly pieces of software and just use Veeqo to do everything in one place. This has saved A1 Great Deals over 6-hours per day in time in addition to earning Veeqo Credits, and has saved eChapps over $15,000 in annual software costs.

Ben Chappell, eChapps' co-founder, says, “As everybody knows, software very quickly adds up - the monthly cost, yearly cost - some even take a percentage of your sales nowadays, and that’s just profit gone. That is something nice about Veeqo, is there is no cost, it’s just a better product and it’s free.”

Through the Veeqo Credits program and our free-to-use software, we can help you reduce your shipping costs and inventory expenses so you can focus on maintaining a healthy profit margin.

Mike Truffa, the owner of A1 Great Deals, says, "We get Credits daily, we’ve gotten $13,469.36 back since September. It’s been a lot.”

Our shipping software is designed to also help you process a large number of orders quickly and efficiently through batch processing and automation which reduce time spent on manual tasks and errors.

It also saves you money as fewer errors and more time equal fewer returns, customer issues, and admin.

So, welcome to the world of ecommerce where it is entirely possible to cut costs without cutting corners.

Sign-up for your own Veeqo account to start lowering your ecommerce business costs immediately.