August 15, 2019

Growth and Productivity, Scaling Your Business 4 min read

5 Surefire Cost Reduction Tips for Your Online Store

With 3.12 million online shoppers in Singapore, it’s no wonder why entrepreneurs are crowding the online space.

But this also fosters new challenges, especially for SMEs. There’s the need to sell top quality goods, drive the right website traffic, and earn a good ROI.

Competition is higher than ever. So online merchants need to find ways to cut costs and stay relevant while maintaining the quality of their products and services.

Don’t know where to start? Consider these five cost reduction tips.

5 Smart Ways to Reduce Costs for Your Ecommerce Biz

  1. Cut down product returns.


Product returns are just added costs to your online store.

With returned products, you’ve wasted labour for settling the concern, packaging costs, and a potential customer that could’ve stayed with you for much longer.

Keeping product returns at a minimum is a foolproof way to cut costs. Here are ways on how you can achieve this goal.

Describe your products in detail.

Customers should know what they’re getting before making a purchase. Write your product descriptions clearly and concisely. And don’t forget to add hi-def photos or videos to give buyers a better view of the product.

Establish a longer return policy.

Extending your time frame for product returns reduces return rates. Longer return policies also allow buyers ample time to change their minds and end up keeping the product.

Take note of the reason for returns.

Always ask for the reason for a product return. Use this information to improve your product or service. For example, overlooked product flaws may mean you need to change suppliers. A return due to wrong sizing may be avoided if you had a size chart on your product page.

  1. Negotiate with suppliers.


Put your negotiation skills to good use by discussing payment options with your supplier.

They’re likely to accommodate your requests if you’re purchasing in bulk or you’ve already established a relationship.

Work out prepayment discounts or fixed price breaks. For instance, you can ask for a percent off if you up your order amount or pay earlier. You can also negotiate free shipping when you reach a certain purchase amount.

  1. Minimize product packaging.


Aside from the product weight, carriers also charge for the dimensional weight — which refers to the length, height, and width of the package in relation to its weight.

Save on shipping costs and minimize your packaging through these pro-tips:

  • Use the smallest packaging possible. Avoid adding to its dimensional weight.
  • Use lightweight materials to avoid excess weight fees. Try eco-friendly packaging. They’re lighter and appeal to younger, more eco-conscious shoppers.
  • Explore different packaging shapes to minimize dimensional weight. You can reuse old boxes and recycle materials as long as they accommodate the item.
  • Go easy on the bubble wrap and unnecessary packaging fillers. A single layer is enough to protect non-fragile items.
  1. Streamline your shipping policy.


Shoppers hate it when their shipping fee costs more than their actual purchase.

Popular online shops in Singapore address this by offering free shipping — either with or without a minimum spend.

You might be wondering, “But someone has to pay the shipping!”

Free shipping is a costly venture when planned haphazardly. Consider these few points before getting on it:

  • Research the competition. Find out how they handle their shipping and learn from it.
  • Find out how much customers are willing to pay for shipping. Is it affordable for your target audience?
  • Work the shipping cost into your product prices. This allows you to offer free shipping without fully shouldering the cost.
  • Maintain competitive prices. Avoid driving up your product prices to make up for shipping cost. Customers are likely to turn to other brands that offer cheaper products.

If free shipping can’t work for you, discuss a flat rate shipping with your third-party carrier. This helps you and your customers save on costs.

Leverage this feature by passing on the savings to your buyers. Advertise it like “Avail of our low shipping rates” or “We ship to you for less cost” to encourage customers to buy from you.

  1. Be smart with marketing.


Sometimes, you need to lose money to make money.

Brewing promotional campaigns every now and then pulls your online store out of a rut. Try some of these tried-and-tested tactics:

  • Focus on less sellable items. Save on inventory costs by making unpopular products more sellable. Include them in Buy-1-Get-1 promos, discounts, or as freebies to higher-priced goods.
  • Offer bundles. Bundling slow-moving items with the bestsellers reduces stale inventory and cuts down storage costs.
  • Target your promotions. Avoid marketing to a general audience. Send out newsletters to a niche audience that’s more likely to read your emails and entertain your offer.

Email marketing is a great way to drive customers back into your website and clear your inventory.

Make sure to get your own business email. This promotes authority and encourages buyers to trust your brand. Vodien provides an email hosting plan that benefits SMEs and e-commerce businesses.


The growth of ecommerce is unquestionable. Running an online store is an ongoing investment, yet you shouldn’t skip cutting costs on the regular. You’ll be surprised at how these few adjustments can benefit your online business in the long run.

Skip to section