Even as a high-volume vendor, you always have to find new ways to continue growing. The online landscape is continually evolving. While you may believe that everything is fantastic now, it does not mean it will be the same tomorrow.
See these top finance ideas to keep your company growing and set a healthy bottom line.
Establish Your KPIs and Track Them
All sellers need KPIs (key performance indicators) to help them track the health of their company. With no KPIs, you can be stuck making conclusions based on your stomach, personal bias or another diversion that’s not based on information.
This can place your company in danger. You could be decided without the ideal information. Or, when a problem occurs, you might be unable to understand what is contributing to it.
Your KPIs are your main metrics and can help you quickly identify trends (both positive and negative) so that you can make informed decisions in any given moment. You may seize a positive tendency to get the most out of an opportunity. Or, you can realize a trend that is a danger and take corrective action before it is too late.
What do you need to monitor in your KPIs? It depends! Every company is unique and you will need to ascertain the best indicators that align with your operations and goals.
To get you started, you can consider important questions such as:
- How much stock do we want on hand?
- What is our current cash flow?
- What is our average order value (AOV)?
- How many sales were from existing clients?
- What is our cost of goods sold (COGS) percentage?
- What is our conversion speed on the site?
In regards to KPIs, identifying and monitoring vital data points on your company may result in more discerning decisions in its direction. In the words of famous physicist Lord Kelvin,”If you can’t measure it, you can’t improve it.”
Be Self Sustaining
Being a self-sustaining company can mean a couple of different things. Here, we are talking about using strong business procedures and practices that let you attain sustainable growth.
If you wish to bring in new clients and be sure that they stick around, you want to look at how your teams, processes and technologies work together to make an end-to-end experience your clients want.
Consider the state of your company at the moment. Are all pieces of it working together in harmony to accomplish your targets?
Probably not. Most vendors have room for improvement, particularly when it comes to sharing and integrating data among groups. You can probably recognize some silos now that are causing difficulties. Is customer service always fielding tickets for orders which are wrong or late? Are clients returning items because they did not meet expectations?
Aligning your teams, technology and processes around the exact goals (such as your KPIs) can be crucial to keeping control of your company over the long term. You are always going to be focused on efficiency and meeting customer expectations.
Concentrate on Existing Customers
Historically, acquiring a new customer can be anywhere from five to 25 times more expensive than keeping an existing one. And, increasing customer retention rates by 5 percent increases profits by 25% to 95%.
It is no secret that it is more competitive (and costly ) to sell online than ever before. If you do bring in a new client, you need to be certain they stick around. That is why customer lifetime value (CLV) is an important KPI for internet companies.
To Begin leveraging your existing clients, here are some different ways to interact with them:
- Ask for testimonials and testimonials
- Start a loyalty program
- Personalize communication according to their previous history with you
- Interact through email marketing and SMS
- Foster communities online
In general, it is about making your brand more than just the products that you sell. Consumers wish to join directly with you.
Evaluation and Diversify to Win
The e-commerce landscape is constantly changing. Each day, you will find new brands, products, channels and much more. If you would like to stay ahead, you must experiment and test different ways to cultivate your brand — do not settle for”we have always done it this way.”
Otherwise, you won’t be ready when something new shows up that threatens to make you irrelevant.
The great news? There’s no lack of things to experiment with! It is possible to test new product packages, marketing messaging/delivery and pricing. Or, you can try new revenue channels such as societal, new online marketplaces and much more.
However, because you diversify, you do not want to lose sight of your client requirements. But as soon as you do find something that works, you can double down on it and continue to grow.
Negative Working Capital
The notion of negative working capital is specialized but worth knowing for any high-volume online seller.
By definition, negative working capital means your existing liabilities (or what you owe) surpass your present assets (what you have now).
At face value, which may look like a bad thing — you owe more than you might have. However, here’s why that is not always bad in the case of an internet seller.
By way of instance, if you’ve got internet 30-day terms with your vendor and you buy inventory and market it on a market that pays out twice a month, you can effectively use the funds twice before you need to pay for the inventory.
Now, if you’re using a solution like Immediate Access whereby you’re paid daily, you would have the ability to use that same money daily, creating more money and cash flow for your company.
To get a high-volume vendor, negative working capital happens when your company generates money so fast (from sales) which you can sell your products to clients before you need to pay your invoice to the supplier. Meanwhile, you are technically using the provider’s cash to grow.
Offer More Options for Clients to Pay
In the last few decades, there has been noteworthy enhancements in how customers can pay online.
Here are Some of the latest payment options:
- Installment payments: Quadpay, AfterPay, Klarna, Sezzle, Affirm
- Lending alternatives: FinFi, Much , Lightstream
- Alternative payment options: ShopPay by Shopify, Square, PayPal, Google Pay
Self-Funding Your Development
If you are trying to maintain a high-growth pace, you could turn to external financing for example loans, venture capital funding or a line of credit to help cover your costs.
However, many sellers do not realize that new financing options are available that do not require taking on debt or putting up security (like your home ) to secure funding.
Alternatively, you can leverage the health of your organization and sales projections to fund your growth. You may use the funds to invest in that next round of stock and new advertising campaigns or to pay unexpected shipping costs from a lump-sum interval.
Two alternative financing options include cash advances and real time payouts.
Cash Advances: A third party capital supplier buys your future receivables (or potential sales) at a discount, and provides you a lump sum of money based on your anticipated sales. Then, you pay the supplier a flat fee based on a percentage of your actual sales.
You may apply for an Immediate Advance from Payability and receive an offer based on your future sales on Amazon, Walmart, Shopify, Newegg and other stations. There are no credit checks and you can get approved in only 24 hours.
Learn what the difference is between a loan and a money or funds advance.
Real-Time Payouts: According to earnings on marketplaces such as Amazon, Walmart, Newegg and much more, a capital provider provides you an accelerated daily payout. To put it differently, you are getting paid your money quicker, which is important when marketplaces like Amazon can hold your earned cash for weeks.