Funding your ecommerce Shopify business
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Talk to Rangewell – the business finance experts
We search the entire market to find the most competitive finance for your Shopify ecommerce presence
At Rangewell we recognise your professional status, and we work harder to find you better solutions - which can include 100% finance for many of your needs.
Funding your shopify ecommerce business
Ecommerce business is growing fast - and shopify is one of the biggest success stories, with 122% growth this year. At Rangewell we understand the potential of ecommerce - and we can help you find the funding you need to make the most of its potential.
The future of retail is online. Covid and lockdown may have both accelerated the process - when governments issued stay at home orders, brick-and-mortar retailers were forced to close and almost all of our daily habits had to change. Many people who had not discovered the ease and convenience of buying online were forced to do so, and most seem to have enjoyed the experience.
The United Kingdom already had one of the highest per capita eCommerce spends in the world - the lockdown simply accelerated the trend that has been growing steadily for several years. People use their screens at home to buy without going out and their mobile to take care of shopping while they are on the move.
With a marketplace made up of potentially billions of people around the world, if you are a retailer you need to take advantage of the potential of eCommerce.
Setting up your own dedicated eCommerce site would mean a huge investment in money and time - but fortunately, there is an easier way to get started - and which could get you an online shop open for business in the shortest possible time. Using an online platform - the digital equivalent of a marketplace - will let you set up your digital stall and enjoy the benefit of their popularity and marketing to bring customers to you.
There are several platforms which can help you set up an online shop - and one of the most popular is Shopify.
Shopify is a cloud-based eCommerce platform that big and small businesses alike use to build and manage their online stores, and its success has helped make Shopify one of the leading global eCommerce companies, which allows anyone to set up an online store and sell their products or services to customers anywhere in the world. They are headquartered in Canada, but their reach is truly international, and it has developed a highly reliable eCommerce platform for online stores. With such a broad client base, Shopify is extremely versatile and scalable. You can set up your Shopify store quickly and can scale it up as your business grows. Smaller businesses can build a basic store while larger companies can build more complicated stores with advanced functionality.
To meet these differing needs, Shopify has three subscription plans with different features and pricing. Shopify offers online retailers a suite of services including payments, marketing, shipping and "customer engagement tools".
In other words, it has everything you need to bring in customers, to help them browse and select from the goods you offer, and place orders and make payments. Then it can let you process their payments to your bank and ship products to customers.
It is a simple and proven solution for retailers of all kinds. The company reported that it had more than 1,000,000 businesses in approximately 175 countries using its platform before the covid crisis. The actual number of businesses - and the value of the sale they make - are now much greater.
Shopify is now the leading eCommerce platform designed for businesses of all sizes. Whether you sell online, on social media or in-store, Shopify has you covered.
How does Shopify work?
It's easy to get started on Shopify. After completing a brief sign-up form, you can get a 14-day free trial allowing you to pick a website template, build the online store, add products and most other things included on a paid subscription. In short, you can set up an online store in minutes.
You need to become a subscriber to unlock the full range of services. Once subscribed to a paid plan, you can start accepting payments in the online shop and connect it to a unique domain name.
Shopify is able to accept online payments in many different ways to ensure that your customers can pay you. The preferred method is ‘Shopify Payments’ accepting Visa, Mastercard, Maestro, American Express, Shopify Pay, Apple Pay and Google Pay. You can also connect nearly any other payment systems such as SagePay and Worldpay.
What can you sell?
Your choice of products has a crucial role in the success of your online business. You can focus on a single product line, then expand to multiple lines depending on your sector, budget and available resources. You can sell virtually anything on Shopify.
Physical products: A physical product could be something you make by hand, have manufactured, or stock that you buy in from a wholesaler in the usual way. Clothing, homeware, tools, toys - virtually anything you maigh expect to sell in a physical store.
Digital products: the scope for digital products is growing fast. This could include ebooks, email templates, audio or video downloads, e-courses, plans or clothing patterns.
Services and consultations: If you are a specialist consultant in virtually any field, from an interior designer to a life coach, your customers can book online or in-person consultations.
Ticketed experiences: Experience-based businesses can range from dramatic performances and travel and adventure to wine tastings and hands-on workshops. If you’re an artist or running a networking event, you can use Shopify to sell those tickets.
Classes and lessons: Customers can purchase, rent, and book lessons from you all through the online store.
Rentals: Rental businesses are technically service-based, even though a physical product is involved. So if you’d like to rent dresses or props, for example, you can use the Shopify platform.
Setting up your Shopify shop
Shopify provides an online dashboard where there are links to adding products, picking a website theme and more. There are plenty of themes available, both free and paid, allowing you to choose how your online presence appears. You might also want to look at a custom site design. Getting your store to stand out from your competitors, and using the same template design that dozens or hundreds of other stores are using is less than ideal. There are templates available in Shopify's store and the majority of established Shopify stores rely on a custom-designed theme, built with their brand aesthetics and online goals in mind
It's worth taking a look at the Shopify's selection of available premade templates, if for nothing more than inspiration. For established Shopify stores looking for a new design to improve performance and be more "on brand", a custom Shopify website design will be required - which can mean buying a special Shopify template from a third-party, or hiring a professional web design agency to design you a custom theme for your Shopify store.
Once you have designed your shop, you can add apps - which cover everything from customer support to marketing and reporting - giving you a complete e business that you can grow and develop as you gain experience.
It can be simple to get started on Shopify - whether you are looking for a completely new business, or are ready to take your existing bricks and mortar business online.
But you will need to deal with the costs.
The costs of getting started on Shopify
The costs of setting up on Shopify will vary greatly. They are priced in Dollars and can range from as little a $29 per month for a basic service to $2000 or more per month for Shopify plus.
On top of this, there are extra charges for credit card payments, and there may be transaction fees charged as a percentage on every sale you make.
But of course, there will be other costs. They may seem lower than traditional retail costs, where you will need expensive high street premises, but may still include:
- Staff costs
- Inventory management
- Equipment maintenance
- Storage/warehouse costs
- Refunds and returns
- Marketing and advertising
- Product photography
- Transactional/processing fee costs
But most crucial of all will be the cost of buying in stock. While this may be arranged on credit if you are a high street retailer with premises and a good sales record, it is much harder to secure credit from manufacturers or retailers if you are an eCommerce business - and virtually impossible if yours is a start-up venture.
The cost of stock may be kept to a minimum with some lines and in some sectors, keeping a very small inventory and ordering direct from suppliers, but you may be faced with a need to carry a reserve of stock worth anywhere between a few thousand to hundreds of thousands of pounds.
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.
Funding for eCommerce businesses
Traditional retailers are well catered for by traditional lenders, and can call on loans to support cashflow and to buy in stock secured on a number of assets - from the premises they operate from or the goodwill that they have built up.
Ecommerce businesses tend to suffer from cash flow shortages yet struggle to secure the funding they need as alternative lenders and banks typically don’t cater to their unique needs. Their underwriting processes generally don’t take all the factors, and ignore the relevant data points that are unique to the sector such as online ad performance, resulting in lower approval rates and small loan amounts.
At Rangewell we take a more entrepreneurial approach. We have developed an understanding of the sector and can provide a range of solutions.
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 ad costs and new inventory.
When orders and cash comes 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 - ensuring you avoid fixed costs and commitments which are unavoidable with a traditional term loan.
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 Shopify presence generates.
The level of funding you can arrange for your Shopify business will depend on the level of custom you can demonstrate. If you can show a record of successful selling, and ideally growing demand for your products, the lenders we approach on your behalf should be able to feel confident that your business has the scope to repay the funding they provide.
Can you be a start-up business on Shopify?
It is possible to start a business on Shopify with the minimum subscription level and basic services, and to call in stock from a supplier as you need it. This is known as dropshipping. It means that you don’t need to pay upfront for stock - avoiding warehouse costs and picking, packing and postage.
Many businesses have started in this way and gone on to major success.
But you will need to invest in your Shopify presence, and especially on your promotion online to bring in customers. You may still need to secure funding to cover your costs.
Start-up businesses are notoriously difficult to secure funding for. Many lenders will simply not advance funds to any business that does not have a record of a year or two successful trading.
However, at Rangewell we can often help you arrange funding for a Shopify start-up, based on your own sound business plan and some funding of your own.
Why you need financial solutions from Rangewell
The eCommerce market is growing very fast, and few lenders are able to keep up with the potential it offers.
They may find it difficult to lend to a business that has no physical presence, and may not even carry its own stock - because it is outside their lending criteria.
At Rangewell, we take a different approach. We know that your eCommerce business is a new type of venture - but we understand the potential that it offers - and the kind of funding that you need.
As experts in all aspects of business funding, we know the lenders who share our understanding and can help you secure the funding you need from them.
Whether you are just setting out in eCommerce, or an established Shopify trader ready to make the most of the potential your business has started to display, we can find the lenders who will work with you to provide the funds you need.
We are on your side. We know that lenders will vary significantly in what they offer, and even a fraction of a percentage point can make a substantial difference to what you actually pay each month. It means that getting expert support to find the most appropriate deal is essential to make the most of the potential of your eCommerce business
Our knowledge can not only help you secure the funding you need for your Shopify-based business - but it can also save you a great deal of cash.
REAL EXAMPLES OF WHAT WE CAN DO
Help arrange start-up funding for a Shopify venture
Find the most competitive funding for stock for a Shopify store
Arrange funding to help a succesful Shopify business expand into a multi-language service
Secure rolling finance to fund the growth of a Shopify store
Discover our range of finances
Every type of finance for every type of business
Our goal is very simple - to help businesses find the right type of finance as quickly, transparently and painlessly as possible.