Every eCommerce project eventually comes down to the same question: what is this going to cost? Whether you’re just getting your business off the ground, or you’re planning your next phase of growth, a clear budget is the foundation everything else gets built on.
In this post, we’ll break down the key areas of your eCommerce business worth budgeting for, so you can invest with intention, keep the customer experience front and center, and set your revenue growth up for the future.
Benefits of Budget Optimization
There are many benefits to creating a financial plan beyond just organizing your funds:
Improve Scalability
Building a successful budget helps you maintain steady business growth long-term, because you plan for it. When setting your goals, you’ll have an idea of where you want to be a year from now and ten years from now, and that growth should be factored into your budget. Consider the new technology you may need to add when managing increased inventory or expanding your geographical reach. When properly accounted for, your budget can help you allocate resources towards future projects that will support your growth.
Minimize Risk
Another financial consideration that you may overlook when creating your budget is preparing for the risks that come with running an eCommerce business. Especially when integrating new technology, it can be difficult to predict how much these projects will actually cost. When planning your budget, setting aside 15-20% simply for unexpected expenses can help you remain prepared for any unforeseen circumstances that could eat up your financial reserves.
Strengthen Discovery and Analysis
When online retailers allocate the first 10-15% of their budget towards discovery and analysis, they can gain a better understanding of the position of their business in the market. This can involve competitor analysis, setting goals, evaluating risks, developing your ideal customer profile and brand image, and other practices that will help you stay competitive and save you money in the long run.
Key Considerations for Budget Development
As you structure your eCommerce budget, there are a few key areas to prioritize:
Web Development
Building a website from scratch is already going to be a challenging project. You’ll first have to decide where to host your domain name, which can cost around $10-20 per year. Once you’ve secured your domain name, you’ll then have to choose a host for your site. The type of hosting needed can depend on a variety of factors, but dedicated hosting can cost hundreds of dollars per month.
When it comes to your actual site build, you’ll likely want to spend a considerable number of resources making sure prototypes and wireframes are as detailed as possible, so when it comes time to put the pieces together, you won’t waste time wondering where things should go. You’ll also have to ensure the user experience and design elements align with your brand identity. These tasks will all depend on how you choose to design your site, whether it be with an automated website builder, a content management system, or a totally custom build.
Marketing
Marketing is an extremely important aspect of your eCommerce business, as a well-designed website won’t ever be noticed if your customers can’t find you. To reach the most potential buyers possible, consider employing a multi-channel marketing campaign that spans social media, email, advertising, web content, direct mail, and events.
Marketing campaigns that involve many moving pieces may require you to hire additional staff or work with an agency. You’ll likely need to incorporate customer relationship management tools and SEO/GEO strategies to boost visibility and reach the potential customers that haven’t found you yet as well, all of which will require additional investment upfront.
Customer Service
Your customers will eventually have questions about your products, and you’ll want to answer them as quickly as you can to ensure your customers feel positively about your brand. Luckily, we now have AI assistants that can answer simple questions faster than a human agent could, and the technology is only improving.
These tools will cost you, however, so you’ll want to account for the additional expense when establishing your budget. You can even use tools like Revere to collect user-generated product reviews that will help your customers feel more confident about their purchase without the need to reach out to you for more information.
Software and Integrations
The most significant portion of your expenses when running an online business will likely be technology, as this is where all your transactions will take place. Once you’ve finished building your site and begin to prepare for launch, your work is just beginning. You’ll need to add and reevaluate technologies and tools frequently, and managing a website with ideal performance requires ongoing maintenance, too.
Throughout your brand’s growth, you’ll likely need to integrate custom tools, partner with third-party vendors, and address site outages; all of this should be accounted for in your budget. To make things simpler, you can choose an eCommerce platform provider that handles many of these tasks on your behalf, so you can focus on providing a better experience for your customers.
Final Thoughts
The most valuable financial decision you can make for your eCommerce business is choosing the right platform to support your long-term growth. Virid’s Unified Commerce Solution delivers confidence, performance, and partnership for growing commerce brands. Our eCommerce platform, marketAgility is purpose-built with scalability in mind, providing retailers with the ultimate flexibility and control over their tech stack and none of the complexity or added cost. Schedule a consultation today to get started.
