How to Launch Your E-Commerce Business Under ₹1 Lakh and Make 25% Profit Per Month Easily!

Starting an e-commerce business in India with a limited budget of ₹1 lakh is achievable if you plan strategically. This guide will walk you through selecting the right products, sourcing them affordably, managing inventory, and setting up an online store without exceeding your budget.

Step 1: Selecting the Right Product

Your product should be easy to source, cost-effective, and in demand. Consider products priced under ₹500 to ensure affordability and good profit margins. Here are a few viable product categories:

• Kurtas – Ethnic wear is always in demand, and cotton kurtas appeal to a broad audience.
• Dupattas – A variety of dupattas, such as bandhani or chikankari, can attract buyers.
• Handmade Artifacts – Unique home decor items like wooden carvings or clay figurines.

Recommended Product Strategy

• Select 3 product types with 3 variations each.
• Keep 20 unique products in total.
• Each product should have 3 SKUs (different sizes, colors, or designs).
• Maintain 4 pieces per SKU, leading to a total of 60 SKUs.

Step 2: Budget Breakdown

With a total budget of ₹1,00,000, here’s how to allocate funds effectively:

Step 3: Sourcing the Products

To keep costs low, source directly from manufacturers, wholesale markets, or online B2B platforms like:

• Sadar Bazaar (Delhi), Gandhi Market (Mumbai), or Surat Textile Market for fashion items.
• Handicraft hubs like Jaipur, Jodhpur, or Moradabad for artifacts.
• B2B platforms like IndiaMART, TradeIndia, or Udaan for bulk orders.

Negotiate prices and order small batches initially to test the market.

Step 4: Setting Up an E-Commerce Website

Invest in a professional e-commerce website that supports secure payments, mobile responsiveness, and SEO. Branding Beetle can develop a high-quality e-commerce website for you with:

• Payment gateway integration (Razorpay, PayU, etc.).
• Shipping and fraud prevention features.
• Google Analytics and Facebook Pixel integration for tracking.
• Inventory management software for better sales forecasting.

Step 5: Selling on Multiple Platforms

To maximize sales, list products on Amazon, Flipkart, and Meesho, while maintaining price parity across all platforms. Pricing should be set 3 times the cost to include:

• Product Costing
• Shipping & Packaging
• Seller Fees on Third-Party Platforms

Managing RTO (Return to Origin) Rates

• 25% RTO on third-party platforms (Amazon, Flipkart, Meesho)
• 11% RTO on brand website
• 2% RTO with Branding Beetle’s optimized e-commerce setup

Step 6: Attracting Customers to Your Brand Website

While acquiring customers on your brand website may cost more initially, repeat purchases will lower acquisition costs. Strategies to increase customer retention:

• Include a small visiting card in every order, promoting your website.
• Offer a 10% discount on the next purchase for customers who post an Instagram review tagging the brand.
• Cross-selling on social media and targeted Google Ads to drive repeat purchases.

Step 7: Profit Analysis

Impact of RTO on Profitability

Assuming 50% of sales come from the brand website and 50% from third-party platforms, the RTO impact is as follows:

• Third-Party Platforms (Amazon, Flipkart, Meesho): 25% RTO
• Brand Website Without Optimization: 11% RTO
• Brand Website With Branding Beetle: 2% RTO

This optimization saves 9% on RTO costs, significantly improving profitability.

Sales & Profit Calculation

With an aggressive marketing strategy, let’s assume 50% of the stock is sold in the first month. Here’s a breakdown:

• Total Stock: 140 articles
• Stock Sold (50%): 70 articles
• Selling Price per Product: ₹750 (3x cost)
• Marketing Cost per Sale: ₹250
• Revenue from Sales: 70 × ₹750 = ₹52,500
• Total Cost per Sale (including product cost + marketing): 70 × ₹500 = ₹35,000
• Total Profit Margin (20%): ₹10,500

Working Capital & Remaining Stock Value

• Remaining Stock: 70 articles
• Stock Worth at Selling Price: ₹52,500
• Working Capital after Sales: ₹45,500 (including profits and unsold stock value)

Step 8: Managing Logistics & Customer Support

Since logistics costs are included in product pricing, select a cost-effective shipping partner like Delhivery, Shiprocket, or India Post. Offer COD & prepaid options to boost conversions.

Final Profit Analysis After RTO Adjustments

• Total Sales Volume: 70 articles (50% of stock)
• Sales via Third-Party Platforms (50%): 35 articles
• Sales via Brand Website (50%): 35 articles
• Effective Sales After RTO (Considering Branding Beetle Optimization):
  • Third-Party: 35 – (25% of 35) = 26 sales
  • Brand Website: 35 – (2% of 35) = 34 sales
  • Total Successful Sales: 60 articles
• Revenue: 60 × ₹750 = ₹45,000
• Marketing Cost: ₹250 per sale × 60 = ₹15,000
• Total Product Cost: ₹300 per unit × 60 = ₹18,000
• Net Profit: ₹12,000 (after deducting product and marketing costs)

Disclaimer

Branding Beetle does not guarantee any percentage of profit or loss statements as a guarantee. Business inherently involves risk, and the above calculations serve as a business plan. Every individual should conduct their own risk assessment before proceeding.

Conclusion

With smart planning, launching an e-commerce business in India within ₹1 lakh is possible. By selling on multiple platforms and focusing on branding, you can build a sustainable business while ensuring higher profits and lower RTO rates through Branding Beetle’s optimized e-commerce solutions.