Hidden charges of running an e-commerce business

When it comes to running an eCommerce business there are some apparent costs that make their way along.

When it comes to running an eCommerce business there are some apparent costs that make their way along. Sometimes these costs are unexpected and might feel like hidden costs.

There are two types of platforms where one sells when it comes to eCommerce business: first being your website and second one being a market place.

When talking about websites, there are many businesses who are basically focused on sales from their own websites. However, major taxes and major issues happen here only.

Website fees:

Most business owners generally set up their businesses on different websites like; WordPress, Shopify, etc. These platforms usually charge some sought of fees or one can say a percentage of your total sales. One needs to carefully analyse the policies and plans of these platforms or could end up squandering money.

Subscription fees:

Different platforms have an amount set up as a subscription fees. For example: WordPress require servers whereas Shopify has subscription fee.

Ads Management:

Now, talking about ads, there are chances that your business is relying on ads to get sales and so, if you are running an Indian account one needs to pay an amount in form of GST to the government.
Even if you have managed to get an Ad account outside India, Indian governments still acts smart here and introduced another tax called ‘Equalization Levi’. Now, added to this tax is another fee which you were already paying to foreign entity like Facebook or Google for running ads. A big turn off and a sad story, Yes… but that’s the way it is.

Conversion Fee:

Conversion fee is one of those hidden charges that eats up most of your margins.
Now, you may have multiple payment gateways, it could be PayPal, Paytm, Razor pay… each and everyone of them have conversion fee involved, as they are helping you out with the transactions at the same time providing you a platform for free.
Another issue that comes hand in hand is of currency rate, for example, you are using some platform as payment gateway, the currency rate at which you are receiving your money would be lesser than the currency rate you will have to pay.

RTOS Return:

Let’s say, your customer has asked for payment returns for some what reason, the customer might have not liked your product or it could have been defective, now, you have to get that already shipped product back. So firstly, you have to pay the shipping company, secondly refund the customer, pay your logistics company, then pay an extra fees to get the product back to supplier/ warehouse and at the same time you have also incurred a product cost.

These are some of the basic costs that we have covered, that can eat up your margins and avoiding them is surely a tough task for someone who’s a fresher into eCommerce. One needs to look up for expert advise in order to reduce these costs impeccably.

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