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SEO & Digital Marketing

Five Cost-Cutting Tips that Will Reduce the Operating Costs of Your E-commerce


If you want the eCommerce business to progress and to stay ahead of the rest, then all you need to do is to lessen the operating costs of the business. Operating expenditures are those expenses for the daily business maintenance and management. The operating costs have COGS or cost of goods that sold and operating expenses.

Below are some of the operating cost examples:

1. Lease and rent

2. Legal and insurance cost

3. Payroll

4. Office supplies

5. Repair and maintenance costs

6. Sales and marketing

7. Utilities

With lots of things to pay, where and how do you think you can start to reduce the operating costs for the eCommerce business?

Here are the 5 helpful tips for cost-cutting:

Automate time-consuming and manual tasks - Time is money.


And so the lesser time you are spending on unnecessary task, the better. An efficient and effective means of reducing the operating costs is through applying business management and procedure solutions to computerize your processes which are presently being done by hand like:

1. Best selling item

2. Daily sales report 

3. Hours worked

4. Stock take and the stock return

Take a smart POS approach which can incorporate with accounting software, plus, it comes with the helpful management systems such as:

1. Customer relationship management or CRM system

2. Employee management system

3. Inventory management system

Use accounting software, HR and the payroll software for the eCommerce business so you may cut down the moment spent on paperwork. By using the appropriate system and software, you will improve the workflow and increased the productivity. Changes and corrections may also be done quickly and easily.

Most importantly, the human errors will be lessened, which will also translate to the condensed time spent on adjusting any human faults because of manual tasks.

Take your store to eCommerce


One of the best ways to lower the operating costs is through taking your store to eCommerce.

Here are the largest advantages of having an eCommerce you are planning:

1. Sell the products all throughout the world with no need for any added cost of rent, interior design, insurance, and so on.

2. Stay open 24 hours in a day, or 7 days in a week or all the time or 24/7.

3. Reach for more people and raise sales potentials.

One thing you have to consider before placing the commerce is by inventory management. You have to be cautious with the stock allocation for the offline and the online store so that you will not run into any other issues like stock mismanagement or overselling.

Use a particular feature that will let you sync both the physical and the eCommerce store, so you will never over to order or oversell any stocks. Handling both the brick-and-mortar plus the eCommerce business from a sole platform will absolutely help decrease the workloads of your employees and you.

Outsource work that does not require resources or full-time attention


Outsourcing – the process of providing work to the external party – is the famous and the cost-effective means to save on operating cash cost. You need to outsource any kind of work that doesn’t require the interest of the full-time employees. Some things that an eCommerce business may outsource are social media, stock take and data entry.

This is how an outsourcing will help in reducing the operating costs of your eCommerce business:

1. Save money on recruitment, interviewing, hiring, and training.

2. Take faster and a better result since work is outsourced to someone who may put all the attention to finishing the task, versus those who would normally have to juggle plenty of different goods at a time.

But, before outsourcing to any work, take into considerations of the following:

1. Is there any receptive information that you need to keep back?

2. Who will draft the legal contracts between you and the external vendor?

3. How are you going to protect your data?

4. How are you going to monitor and handle the external vendor?

Below are some sites where there are freelance workers that you can hire:

1. Freelancer

2. Fiverr

3. Upwork

4. LinkedIn

Go green so you can save more “green”

How do keep track of the inventory? With just a pen and paper or are you counting the stocks manually at the edge time of everyday and then key it in your Excel sheet? Well, this is just the waste of your time and your paper too, don’t you think?

The best initiative that will help you in decreasing the eCommerce operating costs is through going green, and you read it just right! Going green will help your business and our environment too.

Below are some tips about going green to assist you in reducing eCommerce operating costs for the business:

1. Lowers the electric bill via using energy-storing light bulbs like LED bulbs and the CFL or compact fluorescent lamps, which will last long, gives brighter light sources and will save energy.

2. Buy and uses less paper by applying the paperless working processes.

3. Go into cloud-based and keep the your files on the cloud networks like the Google Drive, where there is the chance that you can be able to edit the files in actual real-time.

4. Fix leaking pipes so you can avoid water wastage.

Reduce pricey employee turnover rate

Reduce pricey employee turnover rate

The public is the vital asset for any kind of business, particularly the small business. This is the major reason why the employee turnover will cost your business lots of money wherein the employee leaves the company. Some factors that you have to take into consideration are when calculating the employee turnover costs which are:

a. The cost of getting or hiring new employees – the job advertised, screening, interviewing, hiring.

b. The cost of on-boarding the new employee for their training.

c. The work culture and the team morale – especially if a beloved employee leaves, then the others are questioning why, and will start to think of leaving your company too.

d. Productivity loss – it will take the new employee from 1 to 2 years to attain the similar level of productivity from the existing employees.

e. Human error – the new employees are more prone to making mistakes than the existing employee since they are already familiar with the business systems.

All of the above factors will cost you lots of money, particularly when the employee turnover rates are high. So a way to deduct operating costs of the business is to function on working employees’ happiness.

These three must be the focus of employers to keep their employees and because people are constantly looking for change and growth.


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