U.S. ecommerce sales continue to rise. Ecommerce could grow 25% in 2020, according to Morgan Stanley, who estimated 58% year-over-year growth in April. Total ecommerce spending is expected to top $746 billion this year, even if consumer spending weakens in the second half.
Despite this incredible growth, 90% of ecommerce retailers fail within the first year. It’s therefore crucial for your business to invest, market and prioritize growth to stay ahead of the curve. Here are tips to add fuel to the fire and take your business to the next level.
Top 5 Things to Tackle as Your Online Business Grows
Growth requires investment. This might include investing in more inventory and bringing on new products, or evolving your supply chain and branching out to new sales channels.
Though your goals may change depending on the cash you have on hand, it’s important to establish healthy habits early, like being able to identify weaknesses in your operations or diversifying your assets to reduce concentration risk.
There are many things that you could be doing to push growth—but we’ve boiled it down to five major things you’ll want to keep in mind.
1. Catalog Expansion
Adding more products to your catalog is one clear way to test new product lines and generate additional revenue. If done well, it can help you multiply your exposure on marketplaces like Amazon, where the most successful sellers compete across thousands of listings.
However, if done in vain, expanding your catalog can cause growing pains as things become more complex. You risk stock-outs, oversells or even dead stock if you’re not careful about what you sell and how much of it you keep on warehouse shelves.
As you grow, you’ll likely want automation to more accurately forecast demand, track revenue (at the SKU, brand and channel levels) and manage your listings. You’ll want to be able to edit your catalog without having to go through listings one by one, and a tool that monitors for listing errors or inconsistent product data 24/7.
Note that catalog expansion doesn’t necessarily have to mean purchasing new items. You can get more out of your current inventory by offering products as kits or virtual bundles. The latter refers to products that have not yet been packaged together in your warehouses so that items can be sold as individual units or bundled items.
Of course, bundles require more robust inventory management to ensure that all of your quantities remain in sync and that you don’t oversell or waste time tracking down each component of a bundle.
(Shameless plug: this is where software like SkuVault and Zentail come in handy. Together they can keep your listings and inventory in tip-top shape, letting you handle everything from forecasting to purchasing, listing creation to product data management, from one place.)
2. Diversifying Your Suppliers
When the COVID-19 coronavirus first surfaced in Asia, it caused major problems for anybody sourcing inventory from China. As it spread to other countries, nearly 75% of companies experienced disruption in their supply chain, causing frustration for both buyers and sellers. During this time, 44% of sellers lacked a backup plan to deal with these disruptions, according to a survey by the Institute of Supply Management (ISM).
This raised a big warning flag: as an ecommerce seller, you need to have at least dual sourcing for products and a rapid way to add or change suppliers. You never want to be in a position where one supplier has the power to halt sales, whether because of environmental disruptions, an inability to scale or conflicts in the business relationship itself.
Interestingly some manufacturers are now planning to diversify outside of China (or any single location) themselves, following COVID-19 scares. Consider partnering with diversified manufacturers such as these to further reduce risk.
Though new suppliers may come with new, potentially higher costs, they can also offer additional benefits like shorter lead times and cheaper replacements costs. Take note of these differences as you evaluate suppliers, and regularly check for new competitive offerings in the marketplace.
3. Establishing Good Reporting Habits
With more products and growing sales, having the right tracking mechanism becomes more important than ever. Incomplete or inaccurate data can lead your team in the wrong direction—even cost you millions in wasted spend.
You’ll want to keep tabs on your past, present, and future expenses (and purchases) to manage cash flow. You’ll also want to check that any app you use syncs with your marketplaces or other software to create one source of truth.
Advanced inventory management software, such as SkuVault, can help in this area; it can bring together all your sales data into a series of reports that help with forecasting, reorder points and maximum/minimum order quantities. Each of these are critical in avoiding out-of-stocks or surplus inventory that ties up cash you could be investing elsewhere.
4. Expanding Your Multi-Warehouse Capabilities
When you expand your physical footprint by either adding more stock to your current warehouse or juggling multiple warehouse locations, it can lead to inventory management challenges. Oftentimes sellers run into roadblocks like rising costs, extended fulfillment times, and an excess of mis-ships or returns when trying to expand manually.
However, with an inventory and warehouse management system, merchants can minimize these risks automatically with greater inventory visibility and deeper warehouse functionality.
This combined functionality affords features like:
- User accountability to track inventory handling
- Picking options to accommodate multiple locations and their individual needs
- Optimized pick routes to reduce the risk of mis-ships and extended fulfillment times
- Moving inventory from one location to another with automated updated quantity syncs reflected across locations
5. Listing, Orders and Inventory Channel Syncs
Chasing goals is at the heart of business on the growth track, but the backend work to get there is the focal point—and that means creating consistency. As your inventory, listings, orders and sales channels grow to reach your goals, so does the chance for inconsistency between them.
You can manage all of these with a combination of an inventory management system (IMS) and channel management software. The IMS feeds orders into the channel management system. Quantities are automatically synced and updated to reflect quantities across each sales, creating the consistency you need to succeed.
For instance, SkuVault and Zentail work together to offer a powerful dual solution. Zentail seamlessly integrates with SkuVault to offer a simple—but still reliable—inventory management platform to centralize and automate your multichannel operations.
Zentail will automatically import your SkuVault catalog and inventory. It then helps to optimize your listings for every channel and identify when critical product data is missing, preventing inaccurate SKUs from being listed. When orders come through on one channel, Zentail automatically reduces available inventory across all channels and instantly updates your SkuVault account.
To grow your ecommerce business, you’re going to need to invest some work and capital. In return, you’ll be able to enjoy efficiencies at scale and new ways to boost sales.
If you need an extra hand, solutions like Zentail and SkuVault exist to keep your catalog, warehouses and sales channels in check. They offer the confidence you need to pursue growth fearlessly.