What COVID-19 Means for Ecommerce StartupsApril 18, 2020, 7:52 p.m.
The COVID-19 epidemic and its spread globally have affected many small businesses. My main objective through this article is to provide some perspective to help those businesses grow.
To combat coronavirus, he called for a complete lockout globally, affecting millions of small businesses, including online commerce. A temporary closure of manufacturing facilities, disruptions in logistics, over-paid supplier inventories, conservative consumer spending, fixed overhead costs and overdue vendor payments are seen to be significant contributors to e-commerce financial and cash-flow pressures. . Now most online commerce companies are focusing on improving their financial position, whether it is cash on hand and outgoing, short-term capital, or identifying financial risks.
To help you improve your cash-flow and financial position, we have prepared a list of some points that will navigate you in this uncertain time and help you to be better prepared to take advantage of the recovery.
On this day, the most important direction is to keep your financial system up-to-date and prepare a list of possible business effects.
In order to understand the current financial condition of your business and to identify the best possible actions to maintain your business, it is very important that you update your financial statements. Financial Ratio - Analyze statements using profitability, liquidity, leverage and efficiency ratios.
Identify alternative revenue streams
During the lockdown, some brands have started manufacturing essential items as per their convenience so that the sale of those essential items can compensate for the slowdown in their business and also support the community in this difficult time.
Another example is one of the restaurants that started selling new products online during lockdown.
You can think of expanding your business to other relevant countries, where you are seeing low or medium level disruptions of the Covid-19 epidemic.
Find out if there are any other paid ancillary services that can be offered, doing so will help you bring in additional revenue.
For example: If your company is of fashion apparel, you can provide some special time fashion consulting sessions by establishing a relationship with some fashion influencers.
If your products are of a fitness category, you can tie up with any good nutritionist and provide a diet planning service to your valued customers.
After this epidemic, try to identify consumer spending trends over the next few months, and see if it is possible to expand your business into those high-demand product categories.
Think of all the possible alternative revenue streams, understand each holding capacity, and see if you can take axes in one or two different directions in the short term.
COVID-19 has gained momentum as a result of customer acquisition as the market situation is favorable for some brands. For example, cannabis sales have increased significantly, as California has called cannabis companies an "essential business" for their health benefits. In this case, self-quarantine gets stuck at home to try new products, especially those with positive mind and body characteristics.
Now is the time to move forward with confidence.
Eventually things will return to normal because whatever the rate of infection, eventually its rate decreases, even if there is a slowdown in the markets, people return to work. However, the timing of this rebound is still not clearly revealed and how long it will remain so is not yet clear. In the interim, brands that do not fit the immediate needs discussed above may need to change the way they communicate value propositions to their customers and capitalize on opportunities to change consumer preferences.
There is a lot of uncertainty for small businesses right now, but at the same time it is a tremendous opportunity for them. Stay healthy, and use this period for your benefit so that you can improve your actions in the future.