From $4.6 billion in stockouts to quadrupling container costs, it’s fair to say the last couple of years has been quite the rollercoaster for e-commerce.
Just two years ago, sellers couldn’t look left or right online without seeing some type of warning to build more resilience into their store’s operations. But as the dust has finally begun to settle, these messages have slowly faded into the background.
That could be a problem.
Because the truth is, there will always be major systemic shifts that impact your store’s success. Whether it’s a global health pandemic, a supply chain crisis, or any number of inevitable market challenges, there simply is no such thing as “business as usual”. At least, not in e-commerce.
In e-commerce, the brands of the future will be the ones who take time to build resilience into the fabric of the business today.
In this post, we’ll share the latest on why leveling up your store’s operations is an absolute must for success on the road ahead, plus practical ways to get you started.
The scoop on building a future-proof e-commerce business
- Why it literally pays to make your e-commerce business more resilient
- How to build a more resilient e-commerce store in 8 simple steps
- Learn from past mistakes to build a better future for your store
Don’t let changes in the market take your store by surprise. Find out how flexible e-commerce funding can help you stabilize inventory, optimize your margins, and keep the revenue coming, no matter what.
Why it literally pays to make your e-commerce business more resilient
Even if your store’s sales are booming, resilience will be one of your brand’s greatest assets in the post-pandemic e-commerce market.
Whether you’re hoping to expand into a new market or sales channel, or simply want to keep your current sales on track, strengthening your operations is essential for future success.
Let’s explore some of the reasons why.
Get ahead of your competitors and stay there
Every day, Amazon sees approximately 2,000 new sellers joining the 1.9 million already active on its platform.
Needless to say, competition in e-commerce is getting fiercer by the second.
A nimble e-commerce business that can handle the (occasionally not-so-gentle) blows from the pressures of the global supply chain, changing consumer trends, and whatever else may come, will be positioned shoulders above the competition.
As your store keeps improving its operations, you’ll slowly but surely become the market leader in your niche.
Keep sales steady no matter what
Averageness kills in e-commerce.
If your store lacks creativity and agility it is extremely vulnerable to setbacks. Even the smallest disruption could be the catalyst for costly (or even deadly 😬) mistakes in your store.
The good news is, for a resilient business the reverse is true.
For example, when you’ve optimized your sales, fulfillment, and customer support systems, your store is equipped to stay operational through any number of disruptions such as a sudden warehouse closure or impending Amazon stockout.
With a strong foundation and clear business continuity strategy, your store will be ready to win no matter what.
Keep up with changing trends (without sacrificing your profits)
From evolving consumer behaviors to shifting economic trends, there’s always some type of change on the e-commerce horizon.
Often, that change can put a strain on your business and cash flow.
On the flip side, when your store is designed to weather whatever storms may come, you can easily pivot your operations to preserve your margins and keep your revenue on track.
Ready for even bigger wins this year? Grab our Ultimate Playbook for Scaling Your E-commerce Store for proven tips to help make it happen!
How to build a more resilient e-commerce store in 7 simple steps
Is your store scaling faster than you can keep up with?
It’s a great problem to have. But unfortunately, the steps that got you to $20k in monthly sales aren’t the same steps you’ll need to take when you’re at $100k in monthly sales.
The good news is, if you’ve got winning products, happy customers, and growing sales — most of the work to future-proof your store is already done.
Let’s explore the steps to take to build on your existing success and create an e-commerce store that is a true force to be reckoned with.
#1. Diversify your e-commerce business
You’ve heard this one before, but it still bears repeating.
In the world of e-commerce, it’s never a good idea to put all your eggs in one basket. Diversifying your e-commerce store will not only help reduce your risk exposure, it will also create new opportunities to build resilient revenue streams to cash flow future growth.
For most sellers, the two core diversification areas to focus on are territorial and sale channels.
For instance, you could:
- Run a series of local pop-ups
- Launch stores in countries where you see consistent sales
- Take your brand omnichannel
- And so much more
Not sure if you should open up shop in a new territory vs. on a new platform? Check out our article on Should You Go Multichannel or Should You Go Global? for the key factors to weigh up.
#2. Create a disaster recovery plan
In the past few years, most of us learned the hard way that having a stress-tested recovery plan is key.
With the right business continuity plan, you and your team can leap into action at the first sign of trouble to protect your store from sales-draining mistakes.
You’ll also be better positioned to restabilize your business quickly and gain some much-deserved peace of mind. 🙌🏽
When crafting your store’s business continuity plan, take time to:
- Identify the current and future risks your business faces
- Outline the potential consequences of each
- Craft a step-by-step process for resolving each issue
For example, say your business is currently facing supply chain delays which could lead to stockouts of your bestselling item, costing you precious sales ahead of the Q4 holiday rush.
In this scenario, you could:
- Start manufacturing locally and in nearby regions (e.g., in the EU if you trade from the UK or from Mexico if you’re in the US).
- Develop a pricing strategy to slow down sales temporarily
- Dial down your marketing efforts
- Secure fast working capital to purchase more inventory
Oh hey, there! If you’re looking for more ways to get ahead of the game with inventory, check out our latest article on Cash Flow Meets Supply Chain: Why You’ll Need to Optimize Both for Success in 2022.
#3. Partner with the best suppliers
Your business is only as strong as the weakest link in its supply chain.
These days, it’s critical to develop a robust supplier network that can help see your business through the inevitable highs and lows.
For best results, build a multi-tier approach to supplier and vendor relationships so you always have access to reliable partners.
Start by breaking it down to three core supplier types:
- Frontliners
- Backups
- Potentials
When assessing suppliers, be sure to review the following areas:
- Speed
- Accuracy
- Communication
- Pricing
From here, you can develop a plan for negotiating better terms and meeting your fulfillment requirements no matter what.
“My biggest hurdle is that I’m a starter brand. When I go to the suppliers, I’m not that important in their eyes,” says Amazon seller Nessy H. When she set out to grow her business, she came up against some seriously stiff competition for supplier attention.
Luckily, with a little help from a low-fee borderless payment solution, Nessy was able to outperform her competitors in one crucial area: supplier payments.
“In less than 24 hours, my suppliers had the money! I had to pay banks previously, Alibaba, or other companies which were transactions that cost hundreds of dollars,” recalls Nessy.
Whether it’s fast payments or higher order amounts, look for ways to win favor with your top suppliers, then adjust your operational systems to support those workflows and stay in their good books long-term.
#4. Prune and improve your product portfolio
While a great product can drive strong sales and growth, a lackluster item in your portfolio can dampen your store’s results and overall health.
Build a product portfolio that levels up your store’s resilience with a two-fold response:
- Identify top-performing products and look for ways to improve and replicate their performance.
For example, you could optimize the ads on your bestsellers and increase their marketing budgets to balance for better portfolio-wide ROI. You could also launch related products to help customers get even more value out of your best movers.
- Liquidate slow-moving products, overstocks, and deadstock.
Don’t let your working capital get locked into inventory. Offload your slow movers and deadstock by hosting special sales and promotions, bundling products into more attractive offers, or selling off items in bulk.
Once you’ve increased sales from top-performing products and transformed your deadstock back into liquid capital for your business, set up a repeatable workflow for making a similar product audit in the future.
With a streamlined system for identifying your best-sellers, you’ll be able to focus your efforts on the areas of the business that drive the biggest returns.
#5. Upgrade your e-commerce tech stack
In the world of e-commerce, technology is evolving from a supporting role to a crucial component of your business. If it’s been a while since you’ve audited your tech stack, now is the time.
Review your current systems with an eye toward pinpointing any areas of the business that are currently experiencing bottlenecks.
Once you’ve got the problem areas identified, let technology do the heavy lifting to improve your efficiency and productivity so you have more time to focus on scaling your business.
Here are some key tasks you may want to consider outsourcing to tech:
- Inventory forecasting: Take on a solution that can help you accurately predict inventory needs and maintain optimal stock levels throughout every season.
- Supply chain optimization: Choose a solution that will help you gain full supply chain visibility and send real-time alerts so you always have the info needed to make fast informed decisions.
- Shipping: Onboard a solution that can analyze current shipping pricing and help you bundle shipments for the best cost and time savings.
- Customer support: Opt for a tool that can sort, solve, and escalate customer inquiries with automated live chat while maintaining the human element.
- Marketing technology: Look for tools that can help you analyze customer data, segment audiences, automate marketing campaigns across the buyer’s journey, and track your progress over time.
If you’re looking for more ways to optimize your marketing, our guide to Ecommerce Marketing in 2022 will outline exactly which consumer shifts may impact your strategy this year.
#6. Build an unforgettable customer experience
When you’re busy monitoring sales and expenses, it can be easy to overlook the key driver in building a store that stands the test of time – your customers.
Finding ways to “wow” shoppers over and over again will help you build a loyal tribe that supports your business, come rain or shine.
In the words of Matt Thorpe, founder and senior director of M. Thorpe & Associates Inc., “Don’t forget about those people who have spent their hard-earned money with you. They could be responsible for substantial online sales later down the line. Treat them like your family and take them with you on your journey.”
Invest in your customer experience and your store will have no problem standing out from the rest.
Here are some key customer success tasks to stay on top of:
- Make your website intuitive and mobile-optimized
- Personalize shoppers’ journeys with timely recommendations and offers
- Diversify your customer support channels
- Invest in post-purchase care
#7. Level up your cash flow
When running an e-commerce business, nothing is quite as reassuring as healthy cash flow.
Great liquidity can come to the rescue in a crisis while keeping your current store-scaling projects afloat. So make it a priority to create and keep cash in your business.
Here are some ways to improve your store’s cash flow:
- Save 10% of your profits each month.
- Create an emergency fund covering 6-12 months of expenses.
- Optimize product costs to increase margins.
- Reduce expenses for cross-border transactions.
- Get flexible e-commerce funding such as working capital or an advance on your daily marketplace sales.
Learn from past mistakes to build a better future for your store
In the game of e-commerce, no one comes out unscathed.
Maybe you made a poor inventory investment in the past or missed a profitable opportunity. That’s ok.
Lessons from past mistakes are great guides for building a stronger business for the future. So face your past challenges head-on, take stock of what you’ve experienced so far, and celebrate the many wins you’ve had along the way.
As we enter the next phase of the post-pandemic e-commerce market, building a store that’s healthy both financially and operationally will give you a competitive edge that will produce even bigger wins in the years that lie ahead.
If you’re looking for fast, flexible e-commerce funding to help fuel your growth, SellersFunding can help. Check out our quick two-minute demo to learn more about how we work.
