With most brick-and-mortar businesses switching to digital platforms and more consumers shopping online, having an e-commerce store may seem like a huge advantage these days.
The cost of starting a business can get very expensive if you don’t know how to efficiently manage a smaller budget and lower operating costs for an online store.
As an online store, it’s imperative that you have a merchant account to be able to process payments efficiently. But if you work with the wrong merchant provider, you could be spending way more than you’re earning.
The good news is that there are a lot of reliable merchant account providers out there that won’t break the bank, so to speak. Just make sure to review the terms and conditions before signing a contract so that you won’t be surprised by any hidden charges once you start using your merchant account.
Refunds and chargebacks are inevitable, but a high chargeback rate can get your account canceled. It’s very important to offer the right information to customers about your products. Make your product descriptions as detailed and accurate as possible to avoid disappointments that could easily lead to returns and chargebacks.
If you want your online store to grow and thrive, remember that customer feedback is vital to business success so listen to what your customers have to say.
As such, make sure to offer quality products customers won’t feel compelled to return and, above all, provide exceptional customer service. Encourage customers to settle any issues directly with the company so you can prevent chargebacks.
Some experts would also recommend extending the return window, which can result in the “endowment effect,” in which a person becomes attached to an item the longer someone has it, thus reducing the possibility of a return.
While some charges set by credit card companies are non-negotiable, some companies can actually adjust statement fees, annual fees, and set-up fees so that you can lower your bill significantly.
Even with a high-risk merchant account, you can try to negotiate with your payment processor, especially if you’ve been working together for a long time. Most of these companies will actually be more than happy to reward your loyalty with some discounts and lower fees.
It’s easy to see different e-commerce stores collaborating and entering into partnerships in order to reach a wider target market without an exorbitant marketing budget, which is, frankly, a clever move.
You could start by reaching out to other businesses in the area or businesses online in an adjacent niche, offering some store credits or discounts for a shoutout or post about your business. You can also collaborate with influencers who can help you gain more leverage for your brand.
There are many ways to cut down your costs while still running your online store efficiently, whether that means negotiating with your payment processor, changing to a merchant account with lower fees, or simply being creative with your marketing strategies.
At the end of the day, what matters is that you are able to save some money to put towards growing your online store so you can reach a bigger market in the future.