Case Study: funding an eCommerce business that was growing too fast
TL:DR When a new online business found that they were facing demand that they could not handle, they saw that despite a full order book, they were unable to secure additional funding. They approached us at Rangewell. We looked at the challenges of running an eCommerce business - and found the funding they needed with a line of credit. With stay-at-home orders preventing customers from coming in and lockdown preventing many shops from opening, brick-and-mortar premises have been forced to temporarily close. However, the same factors have given a boost to eCommerce businesses, which use a website as their showroom and point of sale. Instead of a quick run to the store, many consumers are now browsing and placing orders from their computers and smartphones, with both new and experienced online shoppers purchasing greater quantities and varieties of products than ever before. There are plenty of challenges for eCommerce businesses, but with the right combination of products, price and online marketing, they are capable of profitable trading and very rapid growth. At Rangewell, we were recently approached by a new eCommerce business that was enjoying real success - but which needed funding to ensure that success could continue. The challenge Our client was a clothing manufacturer based in the Midlands. They specialised in licensed designs - clothing of all types from t-shirts and polos to sweaters and complete outfits, with characters and images from the world of music, games and movies. “We started off selling band shirts at gigs. Naturally, we had a website, so fans who missed us at the live event could still get the merchandise. When it became impossible to stage live events, we started making the most of our site. We really started in April, when we might take £10,000 a day. Now we are closer to £35,000 per day. We are selling officially Licensed Merchandise ranges with Disney characters and these days that means Star Wars and Marvel characters as well as the mouse and Duck Tales - and there is always demand. So much that we can hardly keep up with it. Making the most of our site meant that we could sell any of our ranges to customers anywhere in the world. We found business was actually getting better as lockdown wore on.” The business had a small UK-based warehousing, packaging and fulfilment centre, but most manufacturing was done in the far east where costs are lower. “These days, distance manufacturing is no problem. I can pick up the phone or get on a zoom conference and talk to our manufacturers at any time. So if we have a sudden rush on something like a Hogwarts Christmas jumper, we can get the stock flown over in a few days.” The only problem with the business was keeping up with the demand from web customers. The order volumes required were getting larger, and with Christmas coming, the partners saw that they needed to bring in considerable quantities of their best-selling lines to cope with the growth of the business. But this would require paying money upfront to the manufacturers and, despite the success of the site, it was money that the business did not have. Funding of £500,000 to £1million would be required to bring in enough stock to see them through. The partners were unable to raise the necessary funds when they turned to their bank. “The bank didn’t understand our business and, because we had been trading in our present form for under a year, they were not prepared to advance us anything - despite the success of our business. We had no advance orders to use as security, and they had no experience of the potential of online businesses.” The partners turned to us at Rangewell for the solutions they needed. Funding for eCommerce businesses As experts in funding for eCommerce businesses, we understand the challenges. With traditional retailers, lenders have years of experience to base their lending decisions on, and bricks and mortar retailers can have physical assets - such as their premises - to offer as security. eCommerce is rather different. Many lenders will not look at applications in the sector because it is outside their experience. Consequently, eCommerce businesses tend to suffer from cash flow shortages and find their growth plans frustrated because they cannot find the finance they need. Fortunately at Rangewell, we have a team of eCommerce experts who understand the challenges you face when it comes to funding - and know the solutions that are available. The most popular of these is a line of credit. A business line of credit is a flexible funding product that enables businesses to draw on funds as and when needed. It’s typically used for immediate expenses rather than long-term investments, and acts very much like an old-style overdraft. A line of credit provides a pre-approved reserve of credit that you can call on as you need to at short notice. It’s a good option for eCommerce businesses that need short-term cash to cover expenses, for example, online advertising costs and new stock. When orders and cash then come into the business you can pay off what you have borrowed - which means that the cash you have taken out and repaid is ready to be taken out and used again. You pay interest only on the amount used, which means you avoid fixed costs and commitments which are unavoidable with a traditional term loan. But this type of funding has another important advantage. It helps keep pace with the growth of your business, because the more business you do, the more cash you generate and the quicker you can repay the amounts you take out. As your business grows, you can apply to extend the line of credit you can call on - ensuring that your further development is supported and that you can bring in stock to meet the demand your online presence generates. The funding Rangewell secured We arranged a line of credit, initially capped at £1million, for the client. It provided the flexibility they needed to stock up for the December demand, and because the amount drawn out could be repaid as soon as customer payments were received, the costs were moderate, compared with the increased revenue that could be generated. Rangewell finds the financial solutions that your business needs Whatever business sector you work in, our Business Funding Experts will be able to discuss your individual options and work out the most cost-effective ways to provide the funding you want - whatever the challenge your business conditions are presenting you with. We are independent, and we know the entire lending market. That means we can take a view that will put your interests first - and if you have not been successful because of your bank’s lending policies, we will work to find one that is more sympathetic. At Rangewell, we can help you arrange all types of business funding - including line of credit arrangements. Call us if your eCommerce business faces a funding challenge - we can help you find the answers you need.
Export through your screen: Taking your business further through e-exporting
Business pundits have suggested that we are currently in the middle of a fourth industrial revolution. Industrial revolutions come about because of technology. In the 18th-Century it was steam, and in the years since then, we have had electricity and automation powering mass production. Now the rise of digital technology means that the tool behind the latest revolution is on your desk – or even in your hand. E-commerce means that any business can buy and sell to any other business – or individual – anywhere in the world at the touch of a button. Of course, it has already begun. Worldwide e-commerce revenues are projected to grow to around $4.88trn in 2021, and the pace of the growth looks set to accelerate. You and your clients cannot afford to be left behind. Is it time to look at exporting? In the wake of Brexit, many businesses are looking at their core activities and clients close to home – but, in fact, the disruption caused by leaving the EU makes looking at new ways to work with overseas customers and suppliers all the more important. Although it may seem like a challenging time to start making any radical business initiatives, it could actually be a very good opportunity to start taking your company further with an e-commerce export drive. After all, the pound is at a lower valuation point than it has been for a very long time, which means that your products are especially competitive on the international market. What’s more, there could be government support for exporting – and, of course, Brexit promises to remove many of the restrictions that were holding back exporting to the rest of the world. Looking to sell abroad? Find out how Export Finance can ease the financial worry of exporting How to start selling abroad If you are already selling online in the UK, there is little to stop you from becoming an exporter. You could sell to anywhere in the world as soon as you get an international order. You may not even need a high-cost e-commerce website. E-marketplaces like Amazon Global Selling or Alibaba provide a readymade route to take your wares to market to customers all over the world. Most will also be able to take care of the payments required. Paypal is a trusted, internationally recognised payment service, but other local payment services, such as Alipay from China, can also be useful. Of course, not all types of products or services are suitable for these online marketplaces. If you are dealing with a complex or high-value product, you may need to invest in international versions of your own website. You may have to think about translating your website into the local language of the countries you are targeting, to increase your visibility and accessibility. Never rely on technology to translate your site. Services such as Google Translate can provide a translation that is technically correct, but it’s vitally important to localise tone and make sure you get a real human - ideally a local - to sense-check what you are putting out. With help from your local experts, it can then be easy to buy AdWords and SEO expertise, and test with very little risk, just as you would with your UK-facing site. You could also buy the local version of your domain name to increase your local presence. Again, global payment systems like Paypal can make getting paid easier for direct sales to customers, but you may need to make arrangements with your bank to ensure that payments will be processed swiftly. Where will you sell? If translating your site sounds like a major headache, you may be tempted to conclude that the easier answer is to concentrate on selling to English-speaking countries. The US, most of Canada and Australasia certainly present opportunities – but you still need to ensure that your sales message is right for local markets. Some experts go so far as to insist that the US should actually be seen as 52 different markets, all with their own regional variations on language and sales rules and regulations – and all can be unsympathetic to new entrants who don’t get things right. It could be worth considering smaller markets such as Scandinavia, along with those across Europe. They can be more forgiving to new entrants – and fulfilment may be easier. What about the money? Managing your cash flow is also crucial if your business is to succeed across global markets. To help with cash flow planning, the first step is to find out from your bank how long it will take for you to be paid from international accounts. This can be up to 6 weeks in some cases – and there could be substantial bank charges for international transfers. Card payments may appear simpler, as they convert foreign currency into pound sterling as part of the service, and allow you to take advantage of a highly developed international payment infrastructure, but bear in mind additional credit card charges for international business can be an extra 6% on top of any standard charge and that exchange rates will fluctuate. You may, realistically, need help with cash flow when you start looking at e-exports. At Rangewell we can help, with funding designed to ease short-term cashflow problems, and with support specifically designed for exporters. To find out more about how we can help you take your business further, call our Export Advisory Team on 020 3318 2613.
Discover the potential of mobile sales
The smartphone is fast becoming the main way that people use the internet – but many small businesses are missing out on a £27bn mobile shopping boom because their websites aren't optimised for mobile shopping. One of the great things about the internet is that your small business can compete with big players. You don’t need a huge investment in retail premises – a well-designed website can be all you need to sell to customers anywhere in the UK – or even beyond. It has meant a sales boom for many retailers, from those with niche businesses to those serving the mass markets with clothing and groceries. But the internet – and web-based commerce – is moving fast. The website that was cutting-edge and which brought in sales from customers eager to go shopping with their laptops is now looking dated. In fact, it could be costing you sales – because it is not optimised for mobile users. There are more phones in pockets than desktops in homes. It’s hardly surprising that the time that people spend on their phones is increasing too. Waiting in a queue, sitting on a train, people look at their phone. It is a new development that could mean extra sales – if your business is ready to take advantage of the potential. New research has shown that many UK small businesses which discovered the potential of selling online a few years ago are now falling behind because the boom in mobile is changing the rules. They are failing to reap the potential of a huge boom in mobile shopping because their websites are difficult to use on smartphones and tablets. It is a growing problem. Shoppers are predicted to double the amount they spent on purchases made via mobile devices to £27bn by the end of this year, and that figure is set to pass £43bn by 2020. Many of the larger online retail businesses now see mobile as their primary sales channel. However, online payment provider PayPal has found that only around 18% of the UK’s small businesses have mobile-friendly websites. Potential customers are frustrated by sites that require awkward scrolling and make data input difficult on the small screen – and, which in the worst cases, simply cannot be used to buy with a smartphone. Does your website offer a poor mobile experience? Are you concerned about the potential costs of making your site mobile-friendly? Find out more about E-commerce Funding or apply today. Small businesses risk being left behind in the next stage of the online revolution Consumers said the lack of a mobile-friendly website was the biggest frustration when they want to buy with their smartphone. With mobile sales growing in virtually every sector, from travel to fashion to car parking – and even the banks offering mobile banking – it looks as though not having a mobile-friendly site means getting left behind. If you have an established brand, and potential customers are searching for you, the chances are that around 60% will be doing so on a mobile phone. Plus, it should come as no surprise that the most enthusiastic mobile shoppers are the younger generation, who are glued to their phones for virtually every aspect of daily life. As many as three out of every five millennials report that they go shopping on their mobiles every day. Mobile shoppers, in general, will go elsewhere if they find you have an unresponsive website. If they have to pinch and hold to see images, or can’t navigate easily to what they want, they will not hang around. Even being unable to find the checkout button at first glance might be enough to make them abandon their basket. The simple fact is if your website is not easy to use with a mobile, they will be going to your competitors who have mobile-friendly sites – and they will not be coming back. On the other hand, a mobile-friendly website delivers real benefits – in that it helps you convert more and generate more sales. What can you do to go mobile? It may be possible to use your current website with a mobile device, but is it easy? You need to make the mobile experience as simple and enjoyable as possible. That may mean starting again with your site – or at the very least, setting up a link to a mobile site which will automatically be seen by users when they are viewing it on a mobile device. This will be recognised by the major search engines such as Google, and may even help bring you in more visitors. Your new site may look much like your existing web presence – but it is likely to have more images, less text and be responsive – meaning that whatever size of screen the user has, the site will adjust to fit it. Of course, providing this kind of site, along with support services, payment facilities and an interface with your internal systems is too important - and too demanding - to be left to just anyone. You need the services of experienced web developers who can demonstrate a record of success in producing mobile sites designed for e-businesses. This means an investment in your business. You should see rapid returns on that investment in terms of increased sales, but the initial costs may be high. At Rangewell, we are working with a growing number of businesses which are seeking funding to pay for the development of their mobile sales channels. We know the lenders who understand the importance and potential of offering a professional mobile presence. If you are ready to make the most of going mobile, simply call us to discuss the funding you need.
4 mistakes all businesses should avoid online
When it comes to getting seen and being readily accessible to your target audience, your online presence could be what makes or breaks your business. To ensure continued success, having a website it is crucial. But, only by having a flawless website can you truly soar to ever greater heights. It is your digital shop front and, just like a physical one, must have the same level of care and attention bestowed upon to it. Yet, despite the necessity many SMEs are not using their online presence effectively and are continuing to make serious errors, causing great harm to their business. To get you out of this conundrum, the experts at Rangewell have put together a list of some of the most common mistakes business owners make online and how to correct them before calamity strikes. Let’s get started! 1) Ignoring your SEO The absolute number one thing you cannot, and absolutely shall not do, is ignore SEO. Optimising your website for Search Engine Optimisation (SEO) is essential for getting your website to the top of search engines like Google. Your customers, the very audience you seek to attract in abundance, are all judging you. How can they see what your business is all about and what makes you so special if they can’t see you? To sort this out you need to focus on a couple of aspects: Verify your Google My Business listing: This makes it much easier for you to connect with your customers, ensuring that the contact details that they see are up to date and relevant. You can also ply your business in the right categories and provide a detailed description of your business. Embed a Google Map into your website: Another great feature provided by Google that you absolutely must take advantage of is Google Maps. By linking your business to Google Maps your customers and desired audience can find your much easier when conducting a search. Optimise meta tags and page content for local keywords: Keywords and meta tags directly affect the visibility of your content and it’s ability to lure customers to your website. Keywords or phrases are popular terms typed into search engines by your customers. So when you put these into your written content it increases the likelihood of them being seen in Google search listings. Meta tags are like that juicy worm at the end of a hook. They are a description or sample of your website’s content and highlights the relevant keywords used within. By looking at this, customers can better judge whether your website offers the products and services they want, increasing your click-through rate and boosting your overall ratings on search engines. Use consistent contact information across your online profiles: Providing the right information to your customers is an absolute must and needs to be consistent no matter where you write it. If it differs across a number platforms it’s going to cause a lot of confusion and annoyance amongst your customers. It’s such an obvious and easy-to-correct mistake that, if you haven’t done it already, you should really be asking yourself why! 2) Not having an accessible site for the modern connected user Your customers are impatient. If your website doesn’t load up fast they’ll soon get annoyed and move on. That’s lost business that’s likely been snapped up by your competitors. Unless you provide them with a loading screen, customers will only wait a maximum of 3 seconds before clicking back onto search engine results. To boost the speed of your website, Google has released Accelerated Mobile Pages (AMP). As the name entails these are much faster to load up on smart device like mobiles and tablets. If your website has not already been made compatible with AMP, you really must get it sorted as soon as possible. 3) Not communicating with their customers Part of being online is being able to communicate with your customers. You can now send newsletters, event invites, reminders, updates, terms and conditions changes, and promotions directly to your customers. However, they are able to communicate with you in turn and offer you crucial reviews. If you get a genuinely negative review, try not to take it to heart. Instead, learn from it and improve your products and services accordingly. Because your customers can now leave you reviews it makes it even easier for you to spot issues sooner and prevent them from causing real harm to your business. Talk to your customers! 4) Not joining up their data between online, offline and mobile Your customers are now able to browse the internet across a multitude of smart devices such as phones, tablets, flat-screen T.V.s and smart mirrors (Yes, smart mirrors really do exist!). However, due to the size of their screens, your website must be compatible with mobile technology. If it isn’t, it shows up like a massive cluster, looking completely squashed and disorganised. The result, as you know by now, is they get annoyed and go to your competitors instead. If you can’t adapt your current website then I’m afraid you must create a separate site dedicated to supporting mobile technology and develop a system where users are redirected to the most relevant site for their device. Naturally, making these changes can amass a hefty pile of costs. However, in order to ensure success and generate further sales, these must all be carried out despite this. But that said, you do not need the carry the costs alone. The business finance experts at Rangewell can help source the perfect finance solution to suit your business’s exacting needs. With our knowledge and experience in a number of sectors, you can gain access to an extensive array of packages including Business Loans, Invoice Finance, Revolving Credit, Merchant Cash Advance and much, much, more! Our values are simple – We’re on your side At Rangewell, our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.
Is your website losing your business money?
If you’re aiming to garner interest in your business, there can be no substitute for having a great website. It’s of vital importance for keeping your existing clientele and attracting new customers. Although more business owners are choosing to develop an online presence, not all websites are made equal. So now we must ask ourselves that all-important question – is your website losing you money? Is your website up to scratch? Despite the necessity for a well-organised and beautifully designed website, many SME owners still haven’t created a professional website. This seriously hampers their ability to spread their message and make further sales. A website is your digital shopfront, it is the first thing your customers see and judge your business by. So don’t underestimate the benefits, getting your website up to scratch is imperative. Don’t lose money and customers to a bad website – fix it! How can you improve your business? If you’re intent on creating a website for your business, you either have to do it right or not at all. There is no middle ground. Customers should be able to gather, at just a glance, what your business is all about. They should be able to see your commitment to quality and be reassured that they’re getting the best value for their money. As well as containing professionally-taken photographs, cramming it with tonnes of useful information about your services, products and sector-specific news is an absolute must. These are just some of the obvious points to aspire towards, but there is still so much more potential to unlock in your website. So delving into the nitty-gritty detail, here are some more aspects to consider: Security If your customers are to pay online, the very least they can expect is for your website to be secure. Now more than ever, customers are on guard for anything that could expose them to online theft or fraud. Customers can now install add-ons to their browser that will review your site’s security rating before even clicking. One of the key aspects that customers will scrutinise is your SSL Certification. Plus, if your business is still using simple HTTP instead of HTTPS, it is very likely that search engines such as Google will penalise your website, reducing its ranking. In addition, if your security is weak, or SSL certificates are out of date, customers will be warned away by a big red pop up in the middle of their screens. Mobile functionality Increasing numbers of British consumers are choosing to conduct their business across mobile platforms. Because of the varying screen sizes between smart devices, your standard website simply won’t do. When accessing any website across a mobile device, the last thing they want to be doing is pinching the screen to zoom in. Be proactive rather than reactive, either optimize your site to fit better and more orderly onto smaller screens or create a parallel mobile-based website for mobile users to be redirected towards. Your customers are busy people, they’re looking at websites whilst on the go. So if it is not arranged and presented neatly for them they’ll simply shop elsewhere. Testing and troubleshooting Testing your business is a must. Sure, it may look professional with lots of neatly laid out images and text, but how does it perform in practice? Is it easy to navigate? Do the payment sections, such as your Paypal Express Checkout option, work correctly? Do shopping cart areas allow customers to edit their orders? How long does it take for pages to upload? Customers are impatient and unforgiving. If sections of your website aren’t working or allow customers to access them properly they will move on and shop elsewhere. It’s also worth noting that even a half-second longer than normal loading time can drive away business. Customers have been conditioned to expect a page upload in 3 seconds tops, any longer and they’ll become agitated and leave. How can you fund improvements to your business’s website? Of course, making changes to your business’s website does cost a pretty penny. As well as dedicating your time and energy, you may need to fork out for additional equipment and outside expertise. So rather than part with large sums of your capital, you could minimise the burden on your business by, instead, accessing the alternative finance industry with Rangewell. Why Rangewell? Our values are simple – We’re on your side. Our services are clear and transparent. We support a wide range of SME businesses of every shape and size, for finding every type of finance. Follow us on Twitter and LinkedIn for business tips and tricks, and feel free to call us on 0203 637 2340 if you’d like to chat about what we can do for you.