Parsimony is an extreme unwillingness to use budget or resources. In the competitive ecommerce marketplace, this reluctance can make it difficult compete.
Parsimony is a term you may not know – but it’s a useful one to consider when it comes to marketing. Not quite the same as just cheap, parsimony in business marketing relates to someone who is too tentative. Unable to commit to any financial risk, a person shackled by parsimony alters the old adage to you have to use your money to make more money.
Worse, this does not come in the form of someone who is totally unwilling to invest in marketing. This person wouldn’t be in ecommerce in the first place. Rather, it creates the terrible scenario of a business unwilling to spend what’s necessary to be competitive.
Ironically, this results in the biggest possible waste of money and resources. In marketing, you either need to jump in with both feet, or not do it at all. Half steps result in total losses.
Have an Ecommerce Business Plan
The best way to avoid indecisiveness with your marketing budget is to have a solid business plan written out before you invest anything.
You must analyze your marketplace, product positioning, competition, fulfillment process, inventory requirements, and business overhead to have a full understanding of what you need to invest to be competitive. You have to create time-specific benchmarks and be prepared to reach them.
Then, of course, you must have the resources and be ready to use them.
Specific to ecommerce marketing, you need to consider:
- Online brand awareness and how you’ll develop it
- Percentages of sales that will go to platforms such as Amazon or Ebay
- Time required to develop organic search ranking for desired keyword phrases
- Ongoing budget required for PPC campaigns
- Website development and maintenance costs
The other part of this is risk. Nobody ever succeeded in business without taking risks, and parsimony is a sign of someone who’s totally unwilling to risk what they already have.
If you are looking to partner with someone like this on an ecommerce venture, think twice. If you’re not aggressive enough, you’ll lose what you do put into it.
And if parsimony is a characteristic of your personality, think twice about getting into an ecommerce business. There are really no verticals left that aren’t competitive, and many require a major investment before you’ll see any return.
With risks come rewards. And in ecommerce, few rewards come without the willingness to risk.