Best Practices for Navigating Finances of Your eCom Biz
Ensuring your eCommerce business stays healthy and profitable is something all sellers struggle with. With so many expenses to account for alongside the twists and turns of running a business, it is hard to stay on top of everything! To have success, it’s vital to understand where your business is standing and where you can improve. If you’d like to learn more about managing finances to make sure your business is progressing, read on.
Make sure to account for ALL expenses
So many costs are easy to overlook and not take into consideration when budgeting. This is a problem because by not budgeting for every known cost, you’ll end up grabbing usable cash from areas of your business that need it. There are quite a few costs that are easily forgettable. Ecommerce selling platforms like Shopify, Amazon, and BigCommerce often ask for a flat monthly fee or a percentage of every sale. Similarly, running a business requires permits to operate. Legal certifications like a general business permit, Doing Business As license, professional trade license, and even health inspection certificates may all be required depending on your business. Such certifications also vary in price depending on what state your business is registered in and may need renewal from every quarter to every year.
Consider inventory management strategy
Without a doubt, inventory management is a huge component into maintaining or even increasing your cash inflows. Staying on top of inventory management is quite important to run a business successfully. You must understand which products you have on hand, where the products are, and how they’re coming and going. In keeping track of data like this, you’ll have the necessary information to predict trends, learn about consumer behavior, and financial standing. But how is your business supposed to keep track? SMBs use tools like Google Sheets or Excel to keep track of inventory. Simple organizational techniques like using Excel are not without fault. When it comes to knowing when to reorder a product and how much to order, a spreadsheet can cause confusion. This is why many growing eCommerce businesses opt to work with inventory management software. Thanks to these types of systems, reordering is extremely simplified. The data does not stop there, though – inventory management systems can provide you with tons of helpful metrics to help understand how your business is doing.
Lessen your shipping costs
The most efficient, catch-all way to decrease shipping costs is to team up with a shipping software solution. Companies like ShippingEasy make the shipping process a lot smoother on your end by centralizing your orders across all the platforms you may sell on. In addition to this, they also cut the costs of printing labels and shipping products. Some ways you can lower shipping costs without the help of a shipping solutions hub include:
- Lessen package weight: While you probably can’t reduce the weight of your product, you can reduce the weight of the packaging itself. Instead of boxes, use bubble mailers or plastic when applicable.
- Make your shipping distance shorter: You can do this by either shipping exclusively to your zone or partnering with an e-commerce fulfillment center.
- Be on the lookout for discounted supplies: Large carriers like FedEx and UPS frequently give discounted packaging supply options to small businesses. Better yet, buy packaging in bulk to increase your savings.
Familiarize yourself with funding options
Working capital can often get caught up covering other expenses. Similarly, sometimes to be profitable your e-commerce business may need a boost. Consider seeking financing for your business needs. Some options to consider include a traditional bank loan, business lines of credit, small business grants, and e-commerce loans. Companies like Onramp Funds have created loans specifically tailored to meet the needs of e-commerce businesses. Other forms of funding such as a bank loan require hoops to jump through: required personal credit reports, complicated payment terms, and a slowed approval process. Onramp’s flexible, low-cost cash advance options may be more accommodating for your growing online store. On top of repayment terms better suited for you, we have a team that wants to be on your team. We’re not just here to throw you some cash – we are always available to help you determine how to best spend it! Learn more or take the first step towards getting a cash offer here.