The pandemic forced many founders to rethink their businesses, with many opting to switch retail stores for digitally native E-Commerce and Direct-to-consumer (D2C) models to take advantage of new consumer habits involving online shopping. According to financial reports, the US E-Commerce market grew a staggering 44% since the pandemic hit. Meanwhile, in Asia, the National Bureau of Statistics in China estimates that the Chinese E-Commerce market will grow to US$3 trillion by 2024.
However, while many E-Commerce businesses are taking full advantage of this increase in demand, some founders may not know how to reinvest their money to grow their business. E-Commerce startups can drive growth by following these five proven strategies.
Increase your Ad-Spending
By spending money on ads, you are investing into future sales, which will in turn increase your revenue. This is the easiest way to drive growth in the short term. Revenue growth has a positive relationship with ad-spending because increased exposure leads to increased audiences, therefore leading to more sales.
Additionally, online ads (through Google, Facebook, Instagram etc.) are extremely powerful because they allow founders to deliver ads directly to their target audience. They are also inexpensive compared to traditional methods of advertising.
Start a Marketing Campaign
Marketing campaigns are a more long-term solution to driving business growth. By investing into marketing professionals, who are trained to improve your branding and design compelling content, you are investing into making your product or business look more attractive to your future audience, and therefore increasing your passive traffic.
This is a more expensive solution to drive growth, but one that is necessary for the long term health of the business.
Buy more inventory
As demand goes up, supplies go down, and founders must manage their inventory accordingly. To make sure that all demand is answered and more cash flows in, businesses must invest into more inventory to avoid running out of stock.
Take advantage of on-season demand
Know the ups and downs of your market. For example, sales usually go up around the months of November and December due to Christmas and Black Friday. Around Asia, sales boom January to February.
Prepare for this increase in demand by buying inventory, funding seasonal ad campaigns, and considering how you can leverage the holidays to drive business growth.
Fix accounts receivable delay
Accounts receivable (AR) delay is one of the worst things for a fast-paced digital business. It can take up to 20 days for Amazon to payout the money you made; it can take 14 days on top of the initial 20 if you have “unavailable” balance. The same applies to many online marketplaces. AR delay stops you from reinvesting your money, stunting business growth.
AR delay can be fixed by the help of private financing institutions, such as Choco Up.
Choco Up helps grow businesses
With 70+ portfolio companies and over US$40 million invested, Choco Up helps drive business growth with our tailored financial solutions. We can help execute your next business move by providing up to US$10 million in growth capital funding.
Our funding can be used for a range of purposes.
Choco Up offers collateral-free non-dilutive funding to help take your business to the next level. Our advance is returned through a unique revenue share model that allows you to pay less when business is down, and faster when sales are high.
Click here to apply for funding!