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Keep Profits High By Avoiding Hidden Costs of Ecommerce Selling

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By Emily Nelson - October 14, 2023- in Go-Getter Blog

There’s never been a better time to run an online store. Ecommerce sales are soaring, with annual US ecommerce sales multiplying nearly five times between 2011 to 2021. Recent data also shows that the first half of 2022 saw US ecommerce sales hit $507.7 billion. With such high sales & potential profits, it seems like you can’t lose. But in reality, there are many hidden costs in ecommerce selling that can eat into your profits & halt the growth of your business. 

The good news is there are several ways you can trim your expenses & keep growing your profits. Here’s where to get started. 

Get Rid of Excess Inventory

If you’re holding onto too much inventory, you’re probably spending a small fortune on everything from storage to administrative fees. Studies show that the additional annual cost of maintaining excess inventory can cost as much as 25 to 32%

Instead of holding onto extra inventory, turn to print on demand (POD). Upload your designs to CustomCat’s library, apply them to the products you want, & integrate them into your store. When you sell an item, we produce, fulfill, & ship it out as a behind-the-scenes arm of your business. With no minimum orders, we serve small solo ecommerce entrepreneurs on up to enterprise organizations. 

Ready to alleviate your inventory woes & still expand your online store? Learn how to get started with CustomCat.

Optimize Administrative Help & Costs

When you run an ecommerce business, you’re responsible for all the different hats of your business, from accounting to customer service. But when it comes to reducing costs, sometimes it makes more sense to scale up & get creative.

Outsource tasks like accounting or anything that eats up valuable time & resources. Try hiring Virtual Assistants through Upwork or Fiverr to send out email marketing campaigns, update your website, or jazz up your product copy.

There are also ways to integrate simple plugins & apps to take care of tasks like tracking your analytics, posting on social media, or getting on top of customer service inquiries. 

Free Shipping & Reducing Returns

In today’s ecommerce landscape, free shipping & returns are expected. It can feel crushing to keep up with the ecommerce juggernauts, but there are ways you can offer freebies without breaking the bank. Start by requiring larger order sizes for free shipping & tighten up the perimeters about returns. You may want to allow returns for problematic orders but not for sizing fit.

If you limit returns, make the customer experience as transparent as possible:

  • Clearly describe the product 
  • Get detailed about the return policy
  • Offer a rock-solid sizing chart 
  • If you use models for your products, create a video with them wearing & moving in the product
  • Enable a live customer chat function to ask questions in real-time

The more you can set customer expectations & accurately represent your products, the lower your return rates. More importantly, you enhance the customer experience from start to finish. 

Reevaluate Your Advertising & Marketing Costs

Advertising & marketing costs add up quickly, but you can make adjustments with a bit of planning. For starters, look into any platform or marketing fees & how they compare. You may discover advertising on Etsy costs less than another platform, making it a no-brainer to focus your sales accordingly. 

Before you invest more time & resources into a wide variety of marketing & advertising channels, dig into your analytics first. Google ads may cost you more, but prove more effective than what you’re spending on social media. 

It’s better to double down on what’s working than spend a little bit everywhere. The key is to make marketing & advertising one of your KPIs to make the most educated & profitable decisions possible. 

Reduce Payment Transaction Fees

Don’t assume that your payment processing transaction fees are as low as they could be. It’s essential to shop around periodically to ensure you’re getting the best rates for the volume of inventory you sell. Or, if you sell both online & in person, you may discover a better deal with specific payment processors than others. 

There are ways to trim down costs on fees by working directly with the vendor. Negotiate fees with your credit card companies & payment processor, or ask what kind of sales goals you need to hit in order to get a better deal. 

Sell Higher Ticket Items

If you’re struggling to recoup ecommerce fees, you may need to sell higher-ticket items. Look for products that put enough back into your business to make it worthwhile, not just a few extra dollars. Or pair your products with an expensive but relatable item, like selling activewear with skiing equipment or hiking boots.

Another option is to sell your low-ticket items in bulk or as part of a minimum order. You keep on selling the products you love while creating a high ticket purchase out of them.

Ecommerce selling gets expensive quickly with hidden costs & fees, but it does not have to break your business. With some creativity & persistence, there are always ways to trim your expenses while raising profits.


How do you keep your profits high by reducing your own hidden costs in ecommerce sling? Let us know by leaving a comment below!


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