It is no new tale that the eCommerce businesses can be very profitable. Ecommerce has become the best option for business owners who don’t have the capital to set up physical stores. In as much as eCommerce seemingly reduces costs for businesses, you should know that the success of your eCommerce business depends on how good you are at maximizing revenue to minimize costs and increase profits. 

It can be a bit challenging to increase sales as more competitions emerge with each passing year. In a bid to improve business, it can be difficult to reduce expenses. Here are seven effective ways to cut expenses for your eCommerce business.

1.Get the best deals

Having great negotiation skills will be very useful in ensuring that you get the best deals from suppliers. Having good relationships with these suppliers will also be very helpful, so be sure to do the right things to maintain healthy relationships with your suppliers. Suppliers sometimes offer discounts, especially when they’ve seen that you never default nor delay your payment. 

You will notice that your suppliers will be less hesitant to give you good deals. It’s not just suppliers who offer discounts. Most of the people you work within the course of running your eCommerce business offer discounts of various kinds at certain times. 

These discounts can be clearance discounts, holiday discounts, bulk discounts, end-of-quarter discounts, bundling discounts, etc. Using these discounts is a great way to cut expenses

2. Reduce products

All your products cost you money to produce and sell. With this in mind, you should focus on the quality of your products and not necessarily the quantity because all products will not sell equally. Some products may be highly profitable; others may not. 

You need to identify the products that are not doing well and consider reducing the production of these products or removing them from your online store totally. The ABC analysis is one good way to identify these products as it prioritizes products according to their order of importance.

Your product range, no matter how big it is, does not always equal business success. So, pay more attention to the products the customers like and focus on improving that.

3. Track your expenses

Being financially responsible is very important for any business at all. Tracking your business expenses can expose hidden expenses. You may make some minor expenses and probably forget to track them or decide not just to because they don’t seem relevant. But these expenses will keep piling up. In the long run, they make a huge difference. 

So, track every expense as early as you can. If you run a small business or you’re just starting out, you may not be able to afford dedicated software or an accounting team. You can just start small by using spreadsheets or simple business software. Tracking your expenses can also help you identify areas of the business that need to be downsized. So, start tracking every expense you make

4. Re-evaluate packaging

When starting out, it can be tempting to use fancy packaging to stand out. This packaging can be expensive, thereby increasing expenses. But sometimes, simple is better. If you want to cut down on expenses, opt for simple and affordable.

 Reduce the use of heavy or big packaging because this costs more. Make a research on different packaging options. Try lighter or eco-friendly packaging. You can also try buying packaging materials in bulk. This will significantly reduce expenses.

5. Frequent inventory checks

One common mistake eCommerce sellers make is not checking their inventory frequently. This is not helpful at all. It is very important to monitor your inventory levels frequently so you can detect abnormalities on time. When you check inventory frequently, you reduce the risk of omission significantly.

 You will also be able to make accurate forecast demand. You don’t just need to be able to forecast demand accurately; you also need to be aware of the relevant seasonal variations. It makes no sense to have a high inventory of Christmas goods when it’s only Easter. So, check your inventory frequently so you can plan well.

The worst thing that can happen to you as an eCommerce business owner is losing potential sales due to inventory issues that could be avoided. Frequent inventory checks enable efficient and effective planning. Storing inventory incurs costs, so you need to plan well and check inventory frequently to prevent overstocking or stock deficiency

6. Reduce the potential for product returns

One of the biggest problems for eCommerce and any business at all is dealing with returned goods. This can set the business back as it incurs substantial shipping and replacement costs. As much as the customer is always right, we all know that some customers can never be satisfied. 

Even if you do your very best to ensure you deliver great products with outstanding packaging in perfect condition, you can’t satisfy all customers. Some will always find a problem even if there is none and demand returns and replacements.

Unfortunately, this is inevitable. There will always be that one customer that must find fault with your product. It can be quite frustrating dealing with such customers, but there are some things you can do to reduce this occurrence. The first thing you can do is to avoid marketing to such customers.

 Ensure that you always check previous sales data of customers so you can fish them out. Once you identify these buyers, you don’t need to keep marketing your products to them. You can also prevent returns by stipulating to customers that you don’t accept returns for goods sent in good condition.

7. Keep your existing customers.

Expanding the customer base is very important to increase sales, but this can be a bit expensive. Attracting new customers would most likely involve some form of advertising which involves money. It can be cheaper and easier to sell to existing customers, especially if you have great products and maintain good customer relationships. You can improve this relationship by giving bonuses, discounts, and coupons, or even free items. 

This will encourage buyers to keep coming back. From there, you can grow a loyal customer base that swears on your brand and spreads the word about your wonderful brand. So, don’t forget to send your existing customers regular updates about new offers via SMS, emails, or even newsletters.


Cutting down on expenses is the easiest way to increase profit margins for your eCommerce business. It can be a bit tricky to reduce costs, but it will benefit your business. Implement these tips in your eCommerce business, and you will be able to reduce expenses in your eCommerce business significantly.

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