How to Set an e-commerce Marketing Budget?

Whether you are a small or large eCommerce business owner, you should never overlook the importance of marketing. No matter how good your products and services are, people need to hear or read about them. The best way to reach them is by marketing.

A complete eCommerce marketing program has both online and offline marketing tactics. You should take into account all stages of the sales funnel, from awareness to consideration to purchase, and finally, retention. Building a customer base requires a lot of investment upfront and most eCommerce business owners fail to do so as their margins are very small.

Most businesses that are spending on marketing are doing without any plan. When you decide to spend on marketing, two things can happen – either you are spending too little or you are spending too much. Both cases are not good for your business. So you must set a proper marketing plan for your eCommerce business.

Set an e-commerce Marketing Budget

You can follow the below steps to set a marketing budget for your business:

1. Evaluate the past –

Before you set your future right, you have to evaluate your past to see what you have been doing wrong and how you can make it right. You should start by evaluating the amount you have to spend on marketing last year. Also, check the different types of campaigns you have run and what the ROI was for each one of them. 

 Once you have the numbers, you automatically know the least performing campaigns. These campaigns should stop unless you know the reason why they did not perform and how to set them right. 

Once you have completely analysed the data from the last year, it is time to move on to the next step.

2. Define your eCommerce Marketing Strategy –

Now that you know what went well and what did not, it is time you define your targets. You should have a clear answer to a question – ‘What are you trying to achieve through marketing campaigns?’

It could be reaching out to new customers or reach new demographics with your products. 

If you have clear answers to such questions, defining a marketing strategy will become a lot easier. The last year, when the global pandemic hit all of us, taught that most businesses should be ready for the unexpected. How successful your plan is depends on how well you are prepared for the unexpected.

Your marketing strategy should focus on customer experience, SEO, getting product reviews and being super active on social media.

3. Define your Marketing Budget –

If you are an already established business and looking for expansion, you may allocate a percentage of your current revenue for marketing. As per industry standards, an eCommerce business should spend between 7 and 12 percent of its total revenue on marketing.

If you are just a start-up business and growing quarter by quarter, calculating the marketing budget as a percent of revenue won’t be a good idea. In such a case, going with a fixed budget would be a better idea. If you are in the first year of your business, set aside an amount you can comfortably spend on marketing. 

The important point is you should ensure your marketing budget is being spent on marketing and not on some other purpose. Another important fact to remember is that you should define your marketing budget such that it is achievable.

4. Allocating the Budget –

Now that you have your strategy in place, the next step is to allocate your eCommerce marketing budget. Since you are an eCommerce business, most of your customers will be online and hence the maximum percentage of your budget should go to digital. 

As the old saying goes, Content is the king, you may focus on creating great content for your new customers who don’t know much about you. Don’t miss any opportunity to reach your customers. 

Most eCommerce believe the best platform for marketing is Google and Facebook – yes, both are effective but not in every business. Try and come up with some innovative ideas to use these platforms to increase your conversion. If you are a small business, your focus should be to minimize the per-sale cost.

5. Roll out the Plan –

If your team is aware of the goals and strategy, then executing the plans will be a lot easier. For that, get in the key members of your team in the room and discuss the plan with them. 

If you need to make any last-minute changes after discussion with the team, do it. If every member is in line with the plan, go ahead with the execution.

Your job as an owner of an eCommerce business is not over with execution. It is your responsibility to regularly track everything related to your marketing plan. You should set up a quarterly meeting with your team to see the progress and evaluate if the goals are meeting. If something is off the track, ask team members to come up with an immediate action plan for a fix.


Setting up an eCommerce marketing budget is complicated if you don’t break the process into steps and try to achieve more in less time. It is also important to mention that there are no one-time marketing plan and budget. 

One major mistake that most businesses commit is considering marketing as an expense. However, it is an investment and an ongoing process. It is essential to change your strategy, budget and execution plan as and when your business grows. Just make sure that whatever your strategy is, you are aiming and receiving a healthy ROI. 

Author Bio:

Name:  Akash Tripathi

Bio:   Akash Tripathi is a Content Marketing strategist at Top Mobile Tech. It is a blog where I cover all the tips & tricks related to Mobile and more related to tech. Stay connected to the rest of the world with Top Mobile Tech. We bring latest and critical news to your mobile and computer devices.

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