Are you dreaming of owning an online store packed with customers and high profits?

You can certainly have this store, but only after following the right steps to start e-commerce.

The very first step is to think carefully about the most important question for any beginner merchant:

How much capital do I need to start my journey?

Many believe that owning a successful online store requires a massive fortune, but the reality is that success is not measured by the size of the capital, but by the merchant's smart strategy.

For example, Ahmed is an ambitious young man, passionate about selling handmade products online. His capital was limited, but he invested it smartly in buying simple tools to make jewellery, and setting up a humble online store on a free platform. Over time, he focused on the quality of his products and marketed them cleverly on social media, attracting a good segment of customers, and turning his modest online store into a thriving business entity.

So, a lack of capital is not the obstacle to the success of your e-commerce, but rather the key to your creativity. A journey of a thousand miles begins with a single step, and determining the appropriate capital and managing it smartly is the first step towards this success.

Reality is more beautiful than you imagine

There are no complex conditions for capital in the world of e-commerce, and you can start your project with limited capital, recycling its profits into product development and marketing to grow gradually. Through our experience, we would love to share with you a glimpse of the top 3 things you need to know to start e-commerce:

1. You must realise that e-commerce capital differs from the capital required in traditional commerce. You do not need real estate or a large warehouse, and most of your costs will revolve around developing a professional website and an effective marketing strategy.

2.  There are many financing options available to e-commerce entrepreneurs, such as bank loans, small business financing, and crowdfunding. Each option has its advantages and disadvantages, so you must study them carefully before making your decision.

3. Half of your success is linked to having a detailed study of the costs of establishing and operating your project. This includes digital marketing, storage, shipping, packaging, and operating costs. Once you determine these costs accurately, you will be able to set a realistic budget for your project.

From this statistic, you must have wondered: "Is it necessary to set a specific capital to start my business?" Certainly, this step significantly reduces the obstacles to your project's success. Here are 5 convincing reasons for that:

1- Financial Planning and Sustainability

• Determining the required capital helps you in proper financial planning for your project in the long run.

• Saving 6-8 months of your salary reduces challenges and helps you in proper planning methods. 

2- It is important to identify your sources

• Identifying good sources of funding helps you secure appropriate financing from different sources such as bank loans or self-investments built among friends and family.

3- Putting everything in its right place

• Allocate your budget appropriately and schedule it across your various costs and expenses.

• If you give everything its due, you won't overspend on some expenses at the expense of others.

4- Risk and Emergency Management

• It helps in providing a financial reserve to face crises and unexpected challenges.

•  Your project will survive and continue even if it faces financial difficulties, as statistics from the Small and Medium Enterprises General Authority showed that projects that started with sufficient capital - based on the nature of their activity - were more sustainable and capable of growth and expansion by up to 82% compared to projects that started with inappropriate capital.

5- Evaluating Economic Feasibility

• It helps in conducting a rigorous analysis of the feasibility of your project and its potential for success.

• It facilitates your decision-making process regarding starting your project or investing in it.

Ultimately.. In numbers: What is the appropriate capital to start? 

We agreed from the beginning that a lack of capital is never an obstacle to starting, and now we will also agree that there are influential factors that govern our giving you the approximate numbers, such as: 

1. Your business type: Determining the type of products or services you will sell online.

2. The size of your online store: The expected inventory size, and the number of your displayed products.

3. Your marketing channels: Marketing and advertising costs to attract your customers.

4. Technology: Costs of establishing and developing an online store, and e-commerce management software.

5. Operational processes: Storage, shipping, and customer service costs.

Here are some approximate figures for the appropriate capital, which varies as mentioned earlier depending on the previous factors. We also emphasise the importance of conducting a comprehensive feasibility study to determine your financial needs accurately; to ensure you consider all expected expenses - including operating, marketing, and development costs - and to confirm your suitable sources of funding:

1. Starting an e-commerce business without inventory (Dropshipping or Affiliate Marketing):

• Required Capital: 5,000 - 10,000 AED.

• Includes: Online store creation costs, platform subscriptions, marketing, and customer services.

2. A small online store with limited inventory:

• Required Capital: 15,000 - 50,000 AED.

• Includes: The above, in addition to the cost of purchasing products, storage, and shipping.

3. A medium-sized online store with product variety:

• Required Capital: 50,000 - 100,000 AED.

• Includes: The above, in addition to the costs of developing a more advanced store, expanding marketing campaigns, and hiring employees.

4. A large online store with a wide range of products:

• Required Capital: 100,000 AED and above.

• Includes: All previously mentioned costs, plus larger investments in technology, marketing, and branding.

How does Salla help you reduce your capital?

Undoubtedly, we are very delighted with every new merchant on our platform, and we work open-heartedly to help their business grow more every day, through the easiest solutions for entrepreneurs wishing to start e-commerce projects in the region, including:

• Our training courses: Educating entrepreneurs on the best e-commerce practices to increase their profits.

• Our competitive pricing: Monthly packages that suit all the needs of entrepreneurs, starting from the free package.

• Our free features: Setting up an online store, a payment gateway, and data analytics tools.

• Our awesome technical support: Free assistance in all steps of creating and managing online stores.

• An integrated community: Of successful merchants who can help you overcome your challenges and reduce your risks.

With Salla platform

Start your e-commerce project smartly and at the most suitable prices!

We also give you some effective ways from our experts to reduce your capital as much as possible, for example:

•  Starting an e-commerce business without inventory: "Dropshipping" or "Affiliate Marketing".

• Leveraging ready-made e-commerce platforms: Like our platform.

• Promoting your online store for free: Using social media and content marketing.

• Participating in programs that support entrepreneurs: Such as support initiatives from local ministries of communications and information technology.

From one geographical region to another.. Does determining the appropriate capital to start my business differ?

Of course it differs! And we will mention a few convincing reasons for you:

1. Operational Costs:

Rent, salaries, and logistics costs vary significantly between major cities and rural areas. For example, the cost of renting a store in Riyadh is much higher than the cost of renting a store in a smaller city like Hail.

Similarly,  employee wages in major cities are higher than wages in rural areas.

And do not forget shipping and delivery costs; usually, the cost of shipping products to remote areas is higher than the cost of shipping them to areas close to the distribution center.

2. Consumer Buying Behaviour:

It is natural that you will notice differences in buying habits and consumer behaviours between each region or province.

What do we mean? 

This means that a consumer in major cities might be more willing to buy electronic products than a consumer in rural areas. They might also prefer buying certain types of products (which others might consider unusual or niche) more than others (simply because they find them useful for themselves).

3. Competition:

The intensity of competition in the e-commerce sector varies from one region to another. For example, competition in major cities is more intense than competition in smaller regions; and this, of course, affects the profit margin you can achieve, which in turn = will affect the capital you need to start your business.

Salla is the future of e-commerce, an easy platform to start your business