How Can an eCommerce Business Effectively Save Costs and Spend Smarter?

Cost Saving Tips For eCommerce Businesses

Last updated - February 7, 2023

Running an eCommerce business during a time of high inflation and economic recession can be a challenging experience. Tumultuous world events impact both profit and consumer behavior, making it difficult for eCommerce businesses of all sizes to navigate their way to sustainable success.

However, it’s important to remember that any eCommerce business can emerge from the other side of recession stronger than ever before by putting the right strategy in place. Amazon’s resurgence after the 2000 recession is a prime example of this. 

So, what does it take to effectively cut down on costs and use your budget to the best of its potential? Read on to find out more. 

Improve Your Audience Knowledge 

The better you understand your audience’s needs, impulses, and behavior, the more effectively you can budget for engagement. Once your company has a better grasp of who its customers are and what they want from you, making a profit will become much easier. 

When drawing up your eCommerce marketing budget, there are certain prospective targets you need to consider, such as: 

  • Age group (are they Boomers, Millennials, or Gen Z?)
  • Most active platforms (do more of your customers use Facebook, Instagram, or Twitter?)
  • Geographical location
  • General interests 
  • Income brackets

Marketing can drain your profit margin when it’s funneled in the wrong direction. Before making cuts anywhere else, make sure you’re targeting the right demographics for your product(s). 

Revisit Product Return Policies

It’s a simple premise: keep the products in your customer’s hands and the profits in your own. With an easy return policy, your eCommerce business risks losing a significant percentage of wealth per item.  That needs to change if you want to take control of your profits. 

When a product is returned, you don’t just face losing the cost of the item itself. The process eats up shipping, labor, storage, handling, and packaging costs. On top of that, if the product has been opened or used at all, it may not be possible to re-sell, and you’ve lost a customer in the process. 

Assessing your product return policies can help you mitigate returns and save money to invest in other business areas. But how do you limit return options without peeving loyal customers? 

  • Provide thorough product descriptions – When customers know exactly what they’re getting, they’re much less likely to make a return. Provide ample, thorough, and accurate descriptions of your wares to avoid disappointment.
  • Prolong returns window – It sounds counterintuitive, but extending the time frame when customers can make a return can reduce return rates. This is because the longer customers have an item, the more attached they’re likely to become to it.
  • Avoid high-risk consumers – Some consumer demographics are more likely to return items than others. Find out which audience demographic is most prone to returns and hit the brakes on marketing to them. Or, at the very least, reassess how you approach them. 

By making these adjustments to your return policy, you can prevent customers from ditching products too early and reduce the amount of money you lose in the process. 

Cost Saving for eCommerce - Return and Refund policies

Leverage UGC (User Generated Content)

A growing number of consumers are weary of traditional advertising campaigns. With the authenticity obsession comes a lack of trust in typical promotional actions, making consumers more responsive to ads that come from sources just like them: other consumers. 

User Generated Content (UGC) is promotional content created by popular online personalities or influencers for their followers. It’s a very effective tool for reaching audiences within your target demographic without requiring your company to spend a dime on actual advertising. Some examples include:

  • Social media photo challenges – Challenge followers to pose with a certain product to participate in a global marketing campaign
  • Testimonials – Get popular online influencers to make posts about their honest experiences with your product
  • Product Reviews – Ask online influencers to write positive product reviews about your store and implore followers to do the same

Recent studies tell us that consumers are 2.4 times more likely to view a promotional post as authentic if it comes from a person they already follow on social media. It’s time to harness the power of influencers!

Cut Down On Delivery Packaging 

When it comes to eCommerce savings, delivery packaging is one of the most overlooked costs. Many online stores use packaging that’s too big, too heavy, and too expensive for the average budget. If you’re looking for a way to cut down, this is an area worth investigating. 

You should always aim to use the smallest, lightest possible packaging for your products. Here are some tips for more efficient delivery packaging: 

  • Buy in bulk – Taking advantage of bulk packaging sales is a great way to save money. Unlike many other products, delivery packaging never expires, so there’s almost no risk of wastage, and you end up saving considerable costs along the way.
  • Buy eco-friendly packaging – Although eco-friendly packaging tends to be more expensive than regular packaging, it has the huge benefit of being lighter, allowing for decreased transportation costs. Plus, as a highly desirable perk, you can charge extra for green packaging.
  • Minimize protective cushioning – Protective packaging is unnecessary if your products aren’t made of fragile materials. Minimizing your use of protective packaging will not only mean spending less on the packaging but will also make the product lighter, saving even more. 

Cut Back On Micro Costs

Micro costs are like microtransactions. They’re tiny costs you don’t notice, but they add up over time. When you’re running an eCommerce business, these costs can seem essential at the time. But a few months later, they’re simply a drain on resources.

For example, you might have signed up with news or data subscription services that you thought would improve your industry knowledge, only to never use them again. Yet, every month, subscription fees are deducted due to contractual obligations. A service like can help quickly and effortlessly cancel subscriptions, freeing up funds you can put to better use elsewhere.

Small changes like this make all the difference to your revenue. When added together, little adjustments are what will boost your sales advantage. 

Cost Reduction Is Key

In such a competitive and constantly growing sector, finding innovative ways to reduce costs is essential for eCommerce stores across the globe. With the growth of IoT and new technologies like AI and AR emerging to boost eCommerce’s popularity further, this industry’s growth is destined to accelerate. 

From revisiting your delivery package payments to harnessing the power of UGC, there’s always something you can do to save costs and spend smarter for better fiscal results. 

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