Guest post: Scaling in e-commerce: 5 challenges to growth

Does it come from the American Beat writer William S. Burroughs or does it
from American football coach Lou Holtz? The saying "Grow or die", i.e. "Grow
or die" has in any case become a mantra for different areas in life.
of successful people. For e-commerce companies, too, the following applies: Want
If you want to continue running a successful online business, you also need to grow.
But what challenges should you consider to avoid failure?

Challenges for scaling online retail

If you want to grow your business over the Internet, the key question is whether you can
you can afford the planned project at the present time. Because a
Planning that is not based on your company's liquidity has more to do with
The company has more to do with building castles in the air than with expanding your business.
So before you start making plans about which new products to include in your
how you want to expand your warehouse or which new target groups you want to
you might be able to address by tapping into new niches, you'll have to
I will or will not devote myself to your liquidity management for the time being.
Ensuring your future liquidity is critical to the healthy scaling of your
online business indispensable. After all, at any given time you must be able to
be, the invoices that are sent to you, or - in the case of a loan -
to be able to pay your redemption installments. When planning your cash flow, there are
five major challenges that you should master.

1. keep track of all sales channels

To ensure the cost-effectiveness of all your decisions, you must
keep an eye on every sales channel. After all, sales channels differ
regarding their possible user fees, variously high sales commissions
and the additional advertising costs you might have to factor in.
So you have to calculate a separate margin for each product. Maybe it is worth
the setting of a product on a particular sales portal not at all. Then
you must already have other reasons for it, such as obtaining greater
Awareness for your offer. However, in order to be able to weigh this up, a daily
Looks at the economics at the product and sales channel level important.

2. anticipate fluctuations in demand

Depending on what your online business offers, your products could be subject to a slightly
seasonality that can be estimated. Is your offer tied to the weather
(e.g. winter jackets), festive seasons (New Year's items) or new trends (streetwear).
Wear-Mode), then you have certain times when demand naturally increases
or falls. However, after a peak in demand, you do not want to be left with an empty
warehouse to respond to customer inquiries, then you need to plan ahead accordingly.
When you invest where is answered by your early liquidity planning.

3. consider all transactions

As your business grows, invoicing programs or enterprise resource planning systems can help
in maintaining an overview of expenses and credit notes. Nevertheless remains
a lot of manual planning and preparation of data from various systems to you
or your financial managers. What you are missing is a central overview of
the entire cash flow, so that you always have the target figures for your online business in front of you.
the eyes. What makes sense here is a Liquidity Management Software like Agicap
with a dashboard where you can see all expenses and income instantly.

4. keep the balance in your camp

Growth in e-commerce is closely linked to expanding inventory.
However, an overstocked or empty warehouse can equally cause losses for your
online trade mean. That's why it's a balancing act between data basis and intuition
asked. The inventory turnover rate must be based on your liquidity planning.
always be a healthy one. And you can only achieve this by reducing the liabilities to
your customers and suppliers. The question then is always,
when you order new goods and in what quantity, without making losses.

5. manage multiple bank accounts like a pro

It is not uncommon for entrepreneurs:inside to operate multiple business accounts.
Especially when the company thus makes payments via an account to suppliers or
employees, and settles customer and cancellation payments in other accounts.
If you lose track here, you'll have problems with liquidity. That is why
it is advisable to include in your liquidity planning all the cost items due to such use.
of business account to be considered, from account maintenance fees to
Repayment installments of current financing.


Want to scale your online business without taking a risk, then keep
Always keep an eye on the liquidity of your company and use it as a basis for
your planning. This way, you can avoid unpleasant surprises when it comes to growth.

About Dr. Nirmalarajah Asokan:

Dr. Nirmalarajah Asokan is Senior Content Marketing Manager at Agicap in Berlin.
He is knowledgeable in the areas of liquidity management, cash flow and financial planning
on the road. He is currently responsible for the conception, optimization and implementation of the
Content Marketing responsible for the liquidity management tool Agicap.

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