post by:
Donna Cohen
Managing a seasonal eCommerce business involves a lot of variables. Calculating expenses and sales can be hard when you don’t quite know what you’re looking at. We’re here to discuss the basics of eCommerce management, so you can grow your business with confidence.
If you own a seasonal eCommerce business, you’ve probably figured out that it takes a lot of prep work to make it successful. You want to maximize your profits during peak season, so you can maintain your low season. How do you do this, you ask? With smart budgeting, clever negotiating, and well-timed advertising, you can negate financial stress and grow your business. These tips will help you manage your assets and amplify their potential.
Forecast Future Sales
Predicting future sales is a must if you are to plan your budget properly. Use the sales data from the last two or three years as a reference. As a seasonal business, your sales have drastic low and high periods. Never overestimate your sales volume. If anything, it’s better to underestimate, so you have money set aside for unforeseen expenses, such as maintenance, economic fluctuations, and undercapitalized trends.
Create A Realistic Budget
Once you understand your forecasted sales, you can create a realistic budget. You can assess product costs and the amount of money you need to stock inventory. A realistic budget will include expenses, such as rent, payroll, inventory, utilities, insurance, equipment, taxes, fees, travel, education, maintenance, advertising, and personal income. There’s a lot to consider and each eCommerce business is unique. Be sure to take your time and review everything, so you don’t miscalculate and end up losing money in the long run.
Understand “Lead Time”
Lead times are very important to understand as a seasonal business. It’s the time between ordering from your supplier and its delivery to your store. If you don’t plan accordingly, you’ll lose sales and waste opportunities. Some products take months to complete, and as a result, you need to plan your cashflow properly. It’s a lot of preparation, but it’s well worth the time it takes to prepare for product launches and the predicted sales.
Negotiate With Suppliers
You need to order your goods in advance. This means you need the money to do it. Negotiating with your supplier is a good place to start. They may offer payment options, so you don’t have to hand over a lump sum all at once. Being a seasonal business, you’ll most likely need a bulk order of products. This is a great point to bring up to your supplier, as well. Look for that discount, and it will make a difference in your cashflow.
Maintain Contact With Customers
You’re in the off season, but that doesn’t mean you should stop advertising. You can lower your campaign budget—that’s smart for most seasonal businesses. Still, you can’t forget to keep in contact with your customers. You have to remain in their thoughts. Offer content relating to your products, and give them a chance to interact. Take this time to improve your brand, so by the time your season comes around, you’ll be fully prepared for what’s to come.
Offer Preorders
Customers love preorders. If you are confident that your supplier will get your goods to you on time, then go for it. It gives you money earlier, so you can operate more efficiently. Customers want to get ahead of the curve, too. A seasonal business only offers their best-selling goods for a certain time of the year, and people know it. Give them the opportunity to prepare for their own lives with your quality products.
Revisit Your Budget
You’ve already created a realistic budget and prepared for the off season. You’ve negotiated with suppliers and made as many sales as you could. Now, it’s time to revisit your budget. Things change, if not monthly, then daily. Keep an eye on your budget, so you don’t fall behind without realizing. Maybe your sales volume was higher than predicted. Reinvest this money into a part of your business that needs a boost, such as advertising.
Look Into Financing
Financing is a great way to keep your business afloat during the off season and make day-to-day costs more manageable. If you have a hard time keeping up with customer demand and need the extra cashflow to go toward inventory, then look into inventory financing. If you need help keeping up on payroll and rent, apply for a business line of credit. This way, you have access to money whenever you need it, and you only pay interest on the money you take out, rather than a lump sum from a traditional loan.