Each year more people are taking the exciting leap into entrepreneurship through ecommerce — and it’s easy to see why. In the UK alone, ecommerce sales are tipped to hit a whopping £148.89 billion by 2024, up from £104.92 billion in 2019.
Once you’ve chosen a profitable product, executed a killer launch, and bagged some loyal customers things should be smooth sailing, right?
Running a growing ecommerce store in today’s ultra-competitive arena is no easy feat. From managing budgets to swatting off competitors, there’s always a new challenge to watch out for.
While business trials and tribulations are par for the course in any industry, they can make your ecommerce journey that much more difficult. And it can be hard to see them coming.
In this post, we’ll shed some light on the most common problems sellers and brand owners encounter as they grow, plus share proven tips to help you overcome them as you scale your brand.
The scoop on punching above your weight in ecommerce
- Scaling Ain’t Easy: 4 common challenges growing stores face
- How to dominate your niche (even if you’re not the biggest fish in the pond)
- Use your agility as your secret weapon
Don’t let cash flow challenges block your store’s progress. Learn more about how SellersFunding can help.
Scaling Ain’t Easy: 4 common challenges growing stores face
If you’re here, you’ve probably been ruthlessly focused on building your brand.
Your advertising is dialed-in, your customers are loyal, and your product quality is consistently awesome. Congrats!
Problem is, once you hit the $1 million and up milestone, things can quickly start to feel a little more complicated — but don’t worry.
Many an online retailer has experienced these same challenges. Learning from their mistakes can help you know what to expect.
Let’s take a closer look at some of the most common problems you can encounter on the rocky road to scaling an online retail business.
Challenge #1. Increased vulnerability to market shifts
If there’s one thing we’ve learned since the pandemic, it’s that ecommerce is sensitive to society’s twists and turns.
Case in point? When lockdowns took effect worldwide, Amazon stopped allowing non-essential goods into its warehouses.
This was great news for the sellers stocking essential items, except for the part that required them to quickly find ways to stay in stock — a huge challenge as many factories temporarily closed due to global lockdowns.
At the same time, sellers with non-essential items had to switch to self-fulfilment simply to remain in stock — which created additional work and costs, especially for stores outside their home territory.
Challenge #2. Suppliers don’t treat you like a VIP (yet)
As a growing brand, you may not have the same buying power or track record your larger competitors have.
When peak sales times or (heaven forbid) disasters arise, it can be difficult to secure production and favorable payment terms without overcommitting to units and services.
To work around this problem, you’ll need to develop great relationships with your suppliers and vendors — but it’s going to take time and effort until you’re seen the same way the bigger players are.
Challenge #3. Big stores undercut their smaller competitors
One thing established brands have over their up-and-coming competition is buying power.
And while it’s seriously uncool to use this kind of leverage to get a one-up on your competitors, the truth is it happens.
Fact is, bigger stores can buy more products for less. Of course, this means they can also pass down the discounts to their customers at rates newer businesses would struggle to maintain.
Without a solid differentiator like a unique product line or excellent customer service, it’s hard to take on these big stores and win.
Challenge #4. Slow payouts can stop you in your tracks
Managing your store’s finances can be challenging at the best of times, but this is especially true when you’re waiting for your Amazon payouts.
If you’re in the enviable position of having more business opportunities than liquid cash, you’ll need to think like the big players do.
Psst! Did you know you can access up to 90% of your incoming sales using our flexible Daily Advance solution? In fact, Daily Advance sellers see an average 75% increase in growth!
How to dominate your niche (even if you’re not the biggest fish in the pond) 🐟
There’s no sugarcoating it: The challenges for growing brands are real.
But no matter how far along your store is in its ecommerce journey, it’s important to dream big and aim high.
Because despite the challenges of being a smaller fish in a massive ecommerce pond, the right strategic moves can help you bypass common hurdles and gain the top spot in your niche. 🏆
These straightforward steps will help you build resilience and flexibility with every new growth level.
Find out what makes your brand unique… and show it off
But to attract your dream tribe, boost sales, and drive profits you’ve got to get to the root of what makes your brand different. Amplify these characteristics in your marketing and use them to make your mark — no matter how noisy your niche.
For example, if your brand is priced higher than your larger competitors because it uses sustainably sourced materials to produce goods, you could drive home your brand’s eco-conscious nature to attract your target customers while transparently justifying your higher price points.
Whatever you have that they don’t, be sure to use it to your full advantage.
Leverage pre-orders for super solid cash flow
Presales can be your store’s best friend in its startup phase and beyond.
Not only do presales validate your product ideas — they can also help you secure the cash flow needed for your initial production run. So, get creative.
Use your presale strategy to test out new product ideas, tap into new audiences, and maximize your store’s liquidity.
For example, say you sell craft beer. You could test:
- New flavors 🍺
- Multipack combinations
- Bottle sizes
- And more!
All without breaking the bank and putting yourself in a less than favorable position compared to the bigger players in your niche. 😉
Focus on adding value (not lower pricing)
As mentioned, it can be tough to offer steep discounts like the big box stores.
But don’t worry.
You can still get ahead by adding more value to your customers’ lives. Stay on the lookout for areas where you can fill in knowledge gaps, make customers feel special, and build exclusivity into your business.
For example, you could create:
- Digital products to help shoppers meet a goal — e.g., ebooks, worksheets, and checklists. 📝
- Free samples to allow shoppers to trial your new products before anyone else.
- Subscription services to take shopping tasks off your customer’s hands.
Build a rock-solid social media presence
Social media is an awesome way to build the kind of trust-based relationships bigger competitors have trouble maintaining. Plus, no matter how busy you are, it pays to invest time and energy into your brand’s social shopping potential as you scale.
To ensure your social channels keep your dream customers coming back for more, run a quick self-audit using these key questions:
- Where are our customers spending the most time online right now?
- What type of content resonates with our target customers?
- What topics are our target shoppers interested in?
- How can we put our own spin on the top-performing content in the market?
Get your cash flow in order
As your store grows, you’ll need healthy cash flow to support larger inventory orders, freight, marketing and more.
But not all funding will be suitable for your expansion. Take time to get to know your ecommerce funding options and research which one can best reinforce your cash flow.
Here are some of the top funding options you may want to think about:
- Working capital: With this type of funding, you’re assigned a set line of credit you can withdraw from as much as needed, and you only pay interest on the amount you use. Plus, with the right provider, you can get approved quickly. For example, at SellersFunding we can give you a decision on your application for working capital in 48 hours or less.
- Revenue advances: With a revenue advance, you don’t have to play defense to Amazon’s rigid seller payment schedule. The way it works is you essentially sell your future sales at a discount, and pay a lump sum fee to access your revenue when you need it. Each time an order comes through, a small percentage of that sale will go to your funding provider to pay back the advance.
Another bonus of a revenue advance, is that they have some of the highest approval rates out of all funding types — especially when compared to traditional sources.
For instance, with SellersFunding’s Daily Advance, you can get approved for up to 90% of your previous days’ sales in less than one business day. 💪
Use your agility as your secret weapon
While the struggles are definitely real, one of the best things about being a growing ecommerce business is you can adapt to customer wants and needs faster than your larger competitors.
Use these traits to your advantage.
With the right strategy, you can scale your store to the next level just as well (if not better!) than even the biggest players in the market.
So get started today! Upgrade your customer service, zoom in on your customers’ desires, and get the funding you need to grow your business on your terms.
Ready for flexible funding you can count on? SellersFunding is here to help.
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