Business tips

Can you launch an online retail start-up with zero cash investment?

You’ve got a great e-commerce idea, but don’t have the initial capital to get started. Fear not: from building a website to creating and marketing your brand, launching an online retail business needn’t cost a fortune.

Have you ever let a great business idea fizzle out for fear of the costs involved? Perhaps you’ve pictured yourself turning a craft hobby into a source of income, or discovered a fantastic product overseas that you want to introduce to the Australian market. If you don’t have ready funds, or simply want to test your business idea without risking financial loss, there are still ways to get your start-up off the ground. Here, we outline the basics of setting up an e-commerce business without spending a cent.

Raise capital

An increasingly popular means of raising capital is crowdfunding – sourcing small amounts of money from a large number of people typically by pitching your business idea online. There are two main types of crowdfunding: equity based and reward based, with the latter best suited to Australian start-ups. Sites such as KickstarterPozible and Indiegogo allow businesses to offer investors a reward (generally an “advance copy” of their product or service) in return for their donation.

Alternatively, you may prefer to source traditional investors. This could include family, friends or Australia’s network of Business Angels, a private group of investors that contributes funds, along with expertise, to start-ups.

Government grants are also an option, though they may seem unattainable (and require a lot of work). Across Australia, the Accelerating Commercialisation Program helps small and medium businesses, entrepreneurs and researchers to commercialise “novel” business ventures. Different states and territories offer various grants and awards; check with your local government to find out more.

Consider pre-sales or drop shipping

Purchasing stock is possibly the greatest expense involved with setting up an e-commerce store. If you plan to create your own products, accepting pre-sales (taking orders before manufacturing your product) or manufacturing on demand can help reduce the initial outlay. Or, if you plan to source products, you could adopt a “drop ship” business model. Drop shipping allows retailers to partner with suppliers that ship products directly to customers. This means you can launch your business without the cost (or risk) of buying stock, while also testing the market. It might not be an ideal long-term solution, as you’re paying a higher single-product rate than you would by buying in bulk, but it is a way of minimising start-up costs.

Check out a highly successful gardening business that uses the drop ship method here.

Build your website and brand

There are plenty of website building tools that provide hosted e-commerce solutions at no charge. WordPress, for example, offers free hosting and hundreds of free themes – some of which can be integrated with free shopping cart plugins, such as WooCommerce. Sparkling and Activello are just two free WordPress themes that work well for e-commerce ventures.

If you’re opting for a free plan, keep in mind that you won’t get all the bells and whistles of a paid package. Your domain name, for example, will most likely be a subdomain of the host site (for example, yourbusinessname.wordpress.com), though you can always upgrade to a custom domain (and email) later on. It’s also worth noting that free plans often limit the storage space available on your site, so if you’re planning to feature lots of images and videos, you might need to upgrade to a paid option.

When building your website, give consideration to the look and feel of your brand. Creating a logo as well as a colour scheme and even a tagline can be done at little to no cost, and can help to reinforce your business’s identity.

Set up a payment gateway

The next step is to set up a payment gateway – one that won’t charge until your customers start buying. With SecurePay Online Payments there are no set-up fees and you can generally be up and running in as little as five business days. Find out more here.

Market your business

You’re ready to start selling – but how will people find you? There are numerous search engine optimisation (SEO) strategies you can implement to improve your site’s search rankings: choosing a web platform that is SEO optimised; using appropriate keywords on your site; and regularly adding quality content, in the form of blog entries, product descriptions, images and videos. Download a free SEO guide to help get you started.

Social media is another free marketing tool, though it’s important to focus only on those platforms that will complement your business, rather than spreading yourself too thin. If you’re selling handcrafted items, for example, you might consider setting up on a visual social platform such as Pinterest or Instagram to showcase your products or, if you’re going to have video content, you could create a YouTube channel.

Finally, don’t underestimate the power of an email marketing campaign. Add an email sign-up box to your site’s homepage and send out regular updates and offers. You can manage your database through platforms such as MailChimp, which offers a free service for up to 2,000 subscribers and 12,000 emails per month.

As your start-up gains momentum, you may choose to invest your profits back into the business – perhaps with paid advertising or web development. However, you may find that the free services utilised early on are sufficient for achieving your objectives.

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