Working Capital for eCommerce Made Easy

Working Capital for eCommerce Made Easy

When beginning or scaling your online business, entrepreneurs and industry vets alike require a solid business plan to maintain a clear vision, but that's not all. Top priority should also be placed on securing the funds needed to continually drive greater demand for one's brand, services, and products. Armed with both a solid trajectory and specialized working capital for eCommerce, there's little new and established online merchants can't achieve.

Trading products and services over the web have become easier than ever, and the market is growing at an ever faster clip. In 2020, the American eCommerce industry reached a total revenue of $789 billion, and by 2024, that figure's expected to reach nearly $1.1 trillion. To capture your share of the market, it's vital to have the liquidity on hand that will enable you to continually add value to your company while providing consistently exceptional support to your customer base.

In this guide, we distill the major aspects of eCommerce financing into the key takeaways that will help you secure eCommence financing in the easiest and most pain-free way possible.

What Makes Working Capital for eCommerce so Important?

Once you've polished your business plan and formulated the most important steps to make it a reality, you need start-up capital to get it fully off the ground and to fuel your creative flame. Established businesses must also be on the watch for expansion capital to increase their growth velocity and secure new opportunities.

All online businesses require a steady source of working capital for eCommerce needs in particular, because the greatest profits only go to those who heed the ever-changing forces in their market niche. Today, those forces change at a blistering pace.

For example, eCommerce requires consistent and affordable shipping options more than almost any other business. When 2020's global economic turmoil caused shipping costs to spike, a perfect storm of economic issues converged that tested SMB's cash flow flexibility, primarily:

  • Massive increase in demand
  • Rising supplier prices
  • Freight shipping shortages and delays
  • Unexpected inventory crunches

By the end of it, however, brand loyalty had increased in the American, Australian, and UK retail markets during that same time period. Multi-brand loyalty rates also increased, showing how important agility is for online retailers. Businesses with more adaptable financing partnerships are often the only ones strategically positioned to secure the inventory levels needed to meet customer demand.

Can your business navigate supply chain challenges and provide the greatest value to your customers in their times of need? When the chips are down, only the most flexible, headache-free funding strategies unencumbered by legal red tape can help you consistently deliver more value to your consumers. Securing that funding even in times of duress can help you secure far greater market share, when your competitors can't.

Even in the best-case scenario, working capital for eCommerce is fundamental to establishing yourself as a leader in your market niche while guiding your business to the new opportunities you otherwise would likely miss.

Related: Common eCommerce Shipping Problems and How to Solve Them

Working Capital That Reflects the Realities of eCommerce

When selecting eCommerce working capital options, ask yourself these crucial questions:

  • What specific aspects of my business am I looking to finance?
  • How fast do I need the money, and is it easy to secure more later?
  • At what point do interest payments and fees render the financing a liability?
  • Can I manage complex application processes and rigid payment terms?
  • Am I entering a true partnership with a mutual aim?

It's also useful to familiarize yourself with the general types of eCommerce business models and determine which one your business fits into. Doing so can help you understand which of your operations would make the greatest difference to your bottom line if your working capital needs were simplified.

B2B (Business to Business)

B2B refers to a business selling a good or service to another company. Business-to-business eCommerce is not consumer-oriented and often includes products like raw materials, software, commercial services, or a combination of products.Suppliers selling directly to retailers through B2B often have much higher funding needs for warehousing space and transportation costs to handle bulk orders and larger inventory turnaround.

Note that in eCommerce particularly, this isn't always the case – companies developing apps sell their products directly to companies and don't usually need warehousing space. Instead, they must fund digital services, such as web hosting, and those offering subscription services may need to fund cloud infrastructure.

B2C (Business to Consumer)

The term eCommerce usually brings to mind individuals or families ordering products from major online platforms to be shipped to their doorstep.

B2C applies when there is a sale from a business to a consumer. These businesses usually must secure financing for the broadest range of functions, as they must handle all of the inventory, shipping, marketing, customer service, and sometimes even transportation services.

In other cases, B2C companies outsource these functions to third-party providers. "Drop-shipping," refers to the process by which businesses rely on another company to fulfill orders. Some hire outside phone support to field customer inquiries. Even then, financing needs are still there – they are simply different.

C2B (Consumer to Business)

C2B is when an individual sells their services or products to one or several organizations. A freelance graphic artist, writer, or web-designer selling their creative services to a company are examples of C2B, as are individual programmers working without a specific company.

While these "one-man-army" operations usually enjoy extremely low overhead costs, for them, the accessibility of financing options have been even lower than for eCommerce businesses. As an underserved market, the need for easy and adaptable eCom financing solutions has been largely unmet, until just recently.

C2C (Consumer to Consumer)

Similarly, C2C transactions involving nothing but individuals have often left sellers on their own as far as financing. Platforms like eBay and Etsy allowed home-based cottage industries to flourish even at the earliest beginnings of eCommerce, but now, adaptive financing options are even becoming available to them.

While such individuals had largely discounted the chances of big bank loans, other options, like PayPal SMB loans, still left much to be desired. What was missing was financing that adapted to the real-time cash-and-inventory cycles that make eCommerce so unique to any other industry, regardless of how many people are involved in a transaction.


D2C (Direct to Consumer)

D2C enables brands to sell directly to the end customer without going through a retailer, distributor, or wholesaler. An example is a manufacturing company that ships its products straight to customers.

Perhaps more than any other eCommerce model, D2C presents the greatest opportunities and challenges for brands willing to take them on. They can cut out an enormous number of supply chain links and directly compete with vendors who rely on them, but it also means facing a tremendously sharp learning curve to do so. They must often fund a wider range of activities they are unfamiliar with.

Where Does My eCommerce Business Fit In?

It's important to know what and where your business is in the overall scheme of the increasingly nuanced eCommerce space. For any eCommerce business, funding strategies that are fundamentally agnostic in their design have become far more efficient than traditional options.

In the end, online SMB owners must ask simply, "How do I finance my operations quickly and with minimal distraction?"

What's needed is an eCommerce financing partnership that gives you access to both:

  1. Consistent funding levels based on actual performance
  2. Easy – and even automatic – cash injections timed precisely for when they're needed

Related: 3 Ecommerce Financing Options to Grow Your Business

Five Common Methods for Raising Capital

When it comes time to build capital and grow your business, there are five common methods to consider, some more efficient and effecitive than others.


This is nothing more than building your company with private savings and financial contributions from friends and family. First-time entrepreneurs especially will often have trouble getting funding without showing demonstrable growth and an informed business plan.

Using your own seed money can help you jump-start your business in the absence of other methods – but it begins a routine of mixing private and business funds that can be risky and hard to break.


Popular online platforms enable entrepreneurs to highlight the benefits of their company and what makes them a promising investment. Consumers can then invest in the ideas they believe in, often in exchange for some kind of benefit themselves.

Crowdfunding is a competitive place to get funding, though, so make an effort to attract audience attention with an impressive business plan, proven business successes, or at least some highly involved web presence. Kickstarter, Patreon, RocketHub, DreamFunded, Onevest, and GoFundMe are popular crowdfunding sites.

Some platforms have difficult terms, such as minimum funding thresholds – and if your business grows beyond the needs of crowdfunding, you may still be locked into long-term arrangements with early investors. Be careful not to offer more than you can fulfill to subscribers, and offer benefits that are more easily fulfilled or are time-limited.

Business Incubators and Accelerators

These programs allow business owners to connect with mentors, investors, and other fellow startups. Companies like Dropbox and Airbnb started with an accelerator, which functions almost more like schools or social clubs.

An incubator is great for those with a lot of time to spare or those without an already strong vision of what they need to do. Those requiring fast and easy access to capital, though, may find the experience incidental to their immediate needs, especially if they already have employees and customers to support.

Business Partnerships

Finding a large investor is a common strategy, but such partnerships often only give you short-term funding in return for long-term (sometimes even permanent) interest in various aspects of your company. You can negotiate the terms depending on how much equity or revenue you're willing to give up, but it's still far from easy.

It also involves no shortage of legal complexities. You want to choose a partner you work well with, one who shares the same values and vision as you. This is hard to be certain of without spending a fair amount of quality time discussing your goals or at least researching potential partners exhaustively. Even then, how will you manage mismatched visions, management styles, or matters of trust with valuable company assets?

Specialized eCommerce Business Solutions

One of the easiest and most cost-effective ways to raise working capital for eCommerce is with adaptive financing solutions that match your real-time sales. They are purpose-built to align with the unique cash flow timings and requirements of the eCommerce industry – and they don't have excessive requirements or fees because they simply take a small percentage (even as low as 1%) of your sales.

These financing solutions reduce the cost and complexity for the merchant, empowering eCommerce SMBs with cash liquidity according to their exact sales and inventory turnover.

These solutions adapt to the everyday ebb and flow of eCommerce. Because of their rapid deployment and turnover, you can quickly expand to support sales acceleration, reducing financing challenges associated with growth. Best of all, you retain full control over your company because you only pay according to actual performance.

Ecommerce Capital That Works for You in the Background

The time has never been better to kick-start your online business and build it as you go. At every stage of growth, you'll need a continually reliable cash flow to adapt to changes in your market niche and seize opportunities as they come. The key is to not lose focus and determination through overly complex or burdensome third-party arrangements and instead, move forward, confident that the best new ideas often emerge during challenges.

This is your time to step up and move forward in business. As Theodore Roosevelt once said:

"Believe you can, and you are halfway there."Onramp's innovative solutions are purpose-built for the particular needs facing eCommerce businesses. We provide easy cash access to power sales and inventory turnover, eliminating cash-flow challenges and empowering your growth – with no red tape, no late fees, and no stress. If you’re ready to grow your vision and efficiently manage the working capital for your eCommerce business, Let 's talk.