How To Grow An eCommerce Business Sustainably
Are you running an eCommerce or retail brand?
This article will help you to increase your chances of succeeding.
E-commerce, or electronic commerce, refers to the buying and selling of goods or services using the internet. Every business with an online store that can take payments and fulfill orders is an eCommerce.
Plan for sustainable growth from the get-go
Four main strategies for growth, are:
✔️ Market penetration
✔️ Product development
✔️ Market development
✔️Diversification
With a market penetration strategy, you try to sell more of the same things to the same market. The risks are usually low as you focus on capturing a bigger share of your current market with the products you already have.
With a product development strategy, you are introducing a new product into your existing market. You’re effectively selling something different to the same customer, potentially encountering greater risks.
Another option is a market development strategy, where you try to sell an existing product in a brand new market. For example, you may want to segment your existing market or reposition your product in it, or target an entirely different geographical area.
Finally, with a diversification strategy, you are aiming to sell completely different goods or services to completely different customers. This is typically the riskiest of options – it requires both product and market development.
You may need to adapt some of the suggested strategies to suit your circumstances. For example, you may want to explore:
✔️ Acquisitions
✔️ Franchising
✔️ Strategic partnerships
The best approach will usually be the one that suits your overall strategic plan.
Strengthen financial management
Business growth is a positive that should deliver a return on your investment, but there are often significant costs involved. Financial planner will ensure positive cash flow management. You want to create a budget to control spending and consider the best ways to secure additional funding, such as crowdfunding, bank loans, or investors.
To strengthen financial management and improve cash flow in an eCommerce company, businesses should focus on optimizing cash flow by negotiating better payment terms with suppliers, improving inventory management to avoid overstocking, and reducing refunds and chargebacks through quality control and fraud prevention. Implementing subscription models or preorders can also stabilize revenue streams.
To strengthen financial management and improve cash flow in an eCommerce company, businesses should focus on optimising cash flow by negotiating better payment terms with suppliers, improving inventory management to avoid overstocking, and reducing refunds and chargebacks through quality control and fraud prevention. Implementing subscription models or preorders can also stabilise revenue streams.
Increasing revenue without significantly raising costs is crucial. This can be achieved through upselling and cross-selling strategies, leveraging email and SMS marketing to drive repeat purchases, bundling products to enhance value perception, and optimising the checkout process to minimise cart abandonment.
Reducing unnecessary expenses is another key aspect. Businesses should audit their advertising spend to ensure they are focusing on high-converting channels, outsource non-core activities to freelancers instead of hiring full-time staff, and review software subscriptions to eliminate unused tools.
Profit margins can be improved by strategically increasing product prices without harming conversion rates, renegotiating with suppliers to lower costs, and outsourcing fulfilment to third-party logistics providers to reduce storage and shipping expenses.
Using financing and credit wisely can also help maintain cash flow stability. Business credit cards offer extended payment cycles and potential rewards, while securing a line of credit before it’s needed can provide financial flexibility. Revenue-based financing is another alternative to traditional loans, allowing businesses to access funding tied to their sales performance.
Finally, improving financial visibility and forecasting is essential. Utilising cash flow forecasting tools helps businesses anticipate future cash needs, while automating bookkeeping with accounting software provides real-time financial insights. Tracking key performance metrics like gross profit margin, customer acquisition cost, and lifetime value ensures informed decision-making and financial stability.
Improve customer experience
The modern buyer expects quick responses across any channel – chat, social, email, phone.
I would always pick a service provider that offers real-time support and troubleshooting over a cheaper, but clunkier competitor. 61% of US Millennials will happily pay more for products and services with better customer service.
Gen Z and Millennials are keen online shoppers. They will happily pay more for products and services with better customer service.
Another great way to make this generation happy is to offer next-day delivery services. Providing next-day delivery can help meet and exceed customer expectations and improve satisfaction, which will both attract and retain more customers.
Services like next-day delivery can also give you a competitive edge and challenge the larger businesses in your industry.
Investing in customer relationships now means reaping the benefits of loyal repeat customers later.
Here are more ways you can achieve this:
• Answer frequently asked questions (FAQ) and offer live chat for immediate problem-solving. Customers will always have questions about how things work or why it isn’t performing well. The last thing they want to do is wait around for you to answer.
• Consider a 100% money-back guarantee. Offering a money-back guarantee makes it easier to shop online. Offering refunds will show your customers their satisfaction more than profits.
It will definitely increase your online sales.
• Offer extras for loyal customers. It costs three times more to get a new customer than to sell something to an existing customer. Invest in a loyalty program to help retain existing customers.
• Delight with branded product packaging. Your packaging is the first thing customers will see when they receive your product, so it must look professional and stylish.
Once you have designed your packaging, make sure to order enough for all of your products. Buying packages in bulk is cheaper.
Think of customer service like an investment, the better you serve your customers, the more positive online reviews they write. Raving reviews mean free traffic and more leads for your business.
Scale operations & infrastructure
When your business grows, you need to scale your operations.
Scaling operations is the process of expanding a business while maintaining or improving efficiency, productivity, and profitability. It involves increasing the capacity of a company to handle greater demand without compromising quality or performance.
This requires enhancing processes, adopting new technologies and tools, and possibly expanding physical spaces. Additionally, you will need to establish how to maintain high productivity levels and efficiency during rapid growth phases.
A successful scaling strategy includes automating repetitive tasks, optimising supply chain management, and ensuring that logistics and fulfilment processes can accommodate increased order volumes. Investing in scalable software solutions, such as cloud-based systems, customer relationship management (CRM) platforms, and enterprise resource planning (ERP) tools, can streamline operations and prevent bottlenecks.
Expanding infrastructure may also involve hiring and training new employees, outsourcing certain functions to third-party providers, or restructuring teams to improve workflow efficiency. Financial planning plays a crucial role, as rapid growth requires sufficient working capital to support increased operational demands.
Finally
Growth is important for long-term success and remaining competitive, but it can also be challenging and disruptive.
Therefore, you must know how to manage periods of growth so that you can overcome these challenges and take the company to new heights.
By planning for sustainable growth, strengthening financial management, scaling operations and infrastructure, and enhancing the customer experience, you can scale and grow your business effectively and overcome some of the main challenges.