How e-commerce Businesses Can Address Cash Flow Issues

​If you have an e-commerce business and you’re struggling with cash flow issues, know that you’re not alone. As a matter of fact, around 80% of all businesses fail because of cash flow problems. The most ironic thing is that the more a business is successful, the greater the chance they’ll have issues. This is why it is crucial that you address these issues as fast as possible, especially in a space where electronic payments are the main, and often sole source of cash. Let’s take a look at a few ways that you can fix cash flow issues in your e-commerce business.

Reduce Overheads

The more you’re able to streamline your operations and cut costs, the more your business gets to keep. And there are many ways that you can do that as an e-commerce business. Things like just-in-time or vendor managed inventory could help. Keeping a close eye on inventory will allow you to sell certain products at a discount and know what needs to be replenished. You can also use sales trend software and make better inventory predictions while only getting what you need.

Look at all Financing Options

If your issue is only a temporary one, one of the things you could do is look for short-term alternative lending options. For instance, if you still have a regular income from a job outside of your business, several services will offer no guarantor loans online, even if you don’t have the best credit. These could be good enough to get you out of a crunch if you’re in an emergency situation for things like purchases or repairs.
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Another option is invoice factoring. This option allows you to borrow against invoices due. However, know that these can be costly, and getting accepted can be complicated depending on the nature of your business and your clients’ creditworthiness. You also will need to have an extensive business history.

​Increase Order Values

Another thing that you can do is take steps to improve your average order value. There are tons of ways that you can do this, but first, you have to look at the metrics.

You should take a closer look at your customers' spending habits and patterns. If you notice that a certain set of clients have a tendency to buy several of the same items, try to find a way to showcase complementary items whenever a customer buys any one of them.
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Also, make sure that you test and retest your landing pages and look at your bounce/engagement rates. Play with different colour schemes, designs, and navigation. Make sure that your site is conducive to online sales. Check if you’re offering a large enough number of payment options, and consider international markets. Also, make sure that you have a way to follow through with your clients and offer follow up offers.

​Conclusion

​So, if you’re running an e-commerce business and are facing cash flow issues, take a step back and consider all these solutions. These could be the difference between barely making it to actually thriving and expanding your business.