Managing Fast Growth And Stock Shortfalls In Ecommerce

Running an ecommerce store is an exercise in managing the balance between stock, cash flow and customer demand. In a perfect world, you’d be selling all your stock and constantly replenishing it as customers continue to buy. 

However, the reality is rarely that simple. Most retailers find that they either fail to meet stock demand, or go into debt buying stock as they wait for purchases to come through. Rangewell recently worked with a successful ecommerce retailer who had experienced a huge surge of success and customer interest, going from £100,000 in annual revenue to £1.5m in just 18 months. 

The retailer had a clear challenge: their products were in-demand and profitable, but lead times meant stock was rarely in the country when they needed it. To avoid disappointing customers or being penalised by Amazon due to ‘out of stock’ status, the retailer needed a cash flow injection. This investment could then be used to increase stock holding and eliminate the risk of long lead times. 

Why we were able to help

Rangewell’s ecommerce broker team are specialists in identifying the most appropriate and affordable opportunities for businesses seeking investment. We work with lenders who know ecommerce inside and out, so can finance you in ways that suit your business’ specific needs (for example, splitting repayments based on sales rather than fixed limits.) 

In this case, the retailer approached our team and explained his need for additional funding to support greater stock volume purchasing. In addition, the retailer discussed the nature of their business and our ecommerce experts quickly identified the main challenge was having to wait for peak ‘spikes’ of demand to be able to finance future stock purchases. Knowing this, we could advise the client on a finance deal that would enable them to buy stock well in advance of demand without relying on customer sales for cash flow. 

After the first no-obligation chat, we had established all of the facts needed to narrow down which lenders we knew would be interested in the client’s business. This meant less hassle for the lender as they didn’t need to ‘shop around’ and could instead choose from ecommerce finance lenders that understand the industry.

Crucially, we chose lenders who recognised the value of the client’s successful growth and could offer more favourable terms. 

Ultimately we were able to negotiate a finance package that ensured the client could invest in the stock they required to accommodate for periods of even the most peak customer demand. Without having to rely on cash flow, the client could concentrate on selling and generating increased profits, from which a portion could be used to pay back the finance deal.  

About ecommerce finance

Ecommerce is a growing field in the UK, accounting for around 36% of all total retail sales in the UK. Globally, ecommerce is a phenomenon that has found audiences in virtually every country and fuelled the growth of new supply chains, new technologies and even new facilities (such as ecommerce warehouses). 

However, the very nature of ecommerce necessitates investment: from designing or enhancing your website through to sourcing stock and establishing logistics for shipping. While some ecommerce success stories discuss small-scale sellers who built from the ground-up, the reality is that 2022’s level of competition demands more of ecommerce businesses. 

To drive success, you need funding for advertising, stock, storage, shipping and more. While you may have capital you can harness, finding a specific ecommerce finance lender can help alleviate the capital risk and instead create a package that combines the funds you need with repayment terms that suit your business and growth plans. 

For businesses, ecommerce is complex with numerous lenders offering various products with complex and opaque repayment structures.

Contact the team at Rangewell today and we’ll talk you through ecommerce finance options on a no-obligation consultation. We work with lenders across the whole of market and will find the ones most likely to support you, your business and your growth.