In my previous article, I talked about how to choose the right kind of e-commerce business model for yourself. We are going to explore further into this concept in today’s article. We are going to explore deep into your commitment level in terms of your time and money and how you should run your e-commerce business. The rule is the more money you spend, the less time you need. Whatever you try to save money on in your business, you will have to make it up with your own time and effort.
What is your commitment level?
If you are a student, it is most likely that you have more time on your hands than a married working adult with kids. However, you would most likely have less disposable income to invest into your business. The commitment level in terms of time and money is what we are going to address in-depth.
Cost of Maintaining the E-Commerce Store
This is the factor that we are most likely not able to change instantly, which is the biggest factor that determines how our business is going to be built. An e-commerce business requires an investment of at least USD$120/year. That makes up to about USD$10 a month to purchase a domain name and host your website, provided your e-commerce store is built on WooCommerce which is powering a staggering 42% of all e-commerce stores worldwide based on a 2018 figure. I frequently tell people that running a 7 figures e-commerce store doesn’t require any paid plugins at all, because most of the important features for marketing and managing your store is available for free. Sometimes I am even surprised by the quality and features delivered with a free plugin that I do not even feel I need the paid features. However, WooCommerce stores requires slightly more effort to setup and maintain, as often updates to your themes and plugins can break your site. WooCommerce is the solution I use, and I personally have 2 full-time developers maintaining all my e-commerce websites.
However if you run a store with Shopify, which is the next off-the-shelf e-commerce solution, they cost USD$29/mth. That is not including some of the important apps that you need to run an effective Shopify e-commerce store. They are usually on a subscription basis as well. Shopify is much easier to setup, and you will be shaving off some of those time spent in figuring things out in WooCommerce than on Shopify. I will be covering the comparison between both solutions in a future blog post.
Cost of Purchasing of Goods
As with dropshipping e-commerce stores, they do not require any upfront capital for purchasing inventory at all. This will be the best model for people who lack cash but have the time as you will be going through a lot of complicated customer support cases throughout your business.
For businesses holding inventory, nowadays you can purchase small inventory at great margins as well, so that you do not have to fork out a big working capital. The benefit of holding inventory is the ability to test and check the quality of the product as well as reducing the lead time for shipping to your customers. Being able to check the quality, will make sure that you only send out quality, working and undamaged products to your customers. The capability to perform checks on your inventory compared to dropshipping stores, reduces the customer complaints you are going to receive, reducing the time that is spent on customer service as well as having great reviews on your store, which also leads to more sales. Shorter delivery time will improve customer experience as well as exponentially reducing in customer inquiries of the status of the order.
Cost of Hiring Virtual Assistants (Remote Staff)
The proper definition of a business in my opinion is when you are able to run a business entirely without your involvement anymore. To do achieve this scale of business is to buy other people’s time, also known as hiring. Most functions within an e-commerce business can be managed by virtual assistants, usually abbreviated as VA, as they can be executed through a computer connected to the internet. The important core and manual ground-level roles in running a functional e-commerce store which you will want to hire people to help you on are customer service, general data entry, graphic design and web development.
Based on 8 hours of work per day, 5 days per week on a monthly salary, customer service and data entry officers can cost you between USD$300 to USD$450. Experienced customer service officers especially on a managerial role can cost up to USD$700-1000 or more as well. Graphic designers can cost between USD$400 to USD$750. They can demand for more especially if they have high quality portfolio and have expertise in web design, UI/UX, product packaging and book cover design as well. Lastly, for web developers, they cost at least USD$600 to hire. You can of course hire and pay them on an hourly or project basis, instead of a long-term commitment.
As for hiring, there is no clear cut rule. Paying more does not necessarily mean higher quality, so you definitely want to assess the people you hire even after they are on your team. However, if you ever chance upon a real talent, they are usually highly in demand, and most of the time, it can take more than just money to have them to join you.
They are many ways to run a successful e-commerce store. However, you need to be in the right model that allows you to be successful. Trying to invest time when you do not have it, will lead you to burn out and giving up way sooner than you think. Investing resources when you do not have it may be a good thing, but it leads to a lot of stress and fear. Unless you have a true apprehension and strategy for success in e-commerce business, I highly recommend you to grow the business step-by-step and invest into e-commerce and marketing education instead of plowing through something which you have minimal understanding of.
If you lack money, go for a dropshipping store, and you can start lean without hiring any staff to help manage and grow your store until you start getting regular sales.
If you lack time, firstly, understand how to run an effective and successful e-commerce business. Then hire and outsource most of the tasks to people whom are best in their role. Take a step back and manage the business from a top-down perspective. Have a basic understanding on the different roles your staff are taking on so that you can understand and manage what they are doing. Buy and give the high level trainings and courses specific to the role to your staff and cut short their learning curve. Lastly, spend most of your time on growing your business, and let the execution be done by your staff. As long as you are an effective leader, you will be able to run and grow the business with even only 3 hours commitment per week.
Personally, at the level of where my businesses are at, I no longer have to work for the business to run and grow. When I work on my business, it is because I truly enjoy what I am doing and I wish to propel the growth faster.