Shipfusion Blog

Capitalize on Loop’s eCommerce Line of Credit for the Holidays: Part 1

Having the right financing partner for your busy season can heavily impact the growth that your business experiences. Using a reliable and affordable financing instrument like Loop’s eCommerce Line of Credit can supercharge your growth by making sure you’re not leaving any money on the table. Below are some insights on how the right financing can make or break your holiday season.

Growth During the Holiday Season

The holiday season is one of the most important times of the year for any retail brand. This is the time of the year where brands launch popular promotions and huge marketing initiatives to delight their audience as they begin their shopping spree. In fact, in a typical year, holiday retail sales account for anywhere between 20%-25% of the year’s revenuebut 2020 is the furthest thing from a typical year:

  • Shopify reported an estimated 45% increase in the number of consumers buying things online they never used to buy before COVID-19. You’ve probably seen it yourself with an unprecedented increase in unique customers since March 2020!

The reality is clear, this will be the biggest holiday season for ecommerce brands ever. 

So how do you make the most of the avalanche of orders that’s coming your way? 

Stock Up

The first lesson taught at the Ecommerce 101 class is that in order to make a sale, you have to have a product. That’s why stocking up is one of the most important preparation tasks for any retail brand looking to capitalize on the holiday season.

Stocking up doesn’t mean “buying as much stock as you can”, but rather buying the right amount of stock as per your forecasted sales.

In typical times, a business owner would look at how much sales they did last year during the holiday season, research how much sales their industry did last year, and combine the two with an expected growth rate based on the previous year of growth at the company. The number they arrived at would be used as a benchmark for how much stock to order.

Here’s the catch though, last year nobody quite knew what 2020 had in store for them, much less how it would affect the eCommerce world. Because of this, retail brands are being forced to prepare for a much bigger holiday season than expected by ordering more stock than they would during a typical holiday season. However, some brands are falling behind by underestimating the amount of sales they will receive. It’s important to avoid running out of stock for obvious reasons; it’s lost revenue and lost market share as consumers will simply type in your competitor’s website and purchase the item in their store instead of yours.

In addition to the difficulties of a spike in sales, your inventory now takes longer to reach your warehouse. Due to COVID, manufacturers are taking longer to make your product, and shipments are taking longer to reach your warehouse. This means that if things go south and you run out of stock, it takes notably longer to restock and fix the problem. The fact of the matter is that not only do you have to order more inventory due to the COVID-fueled spike in online sales, but that you also have to order for longer periods of time than you previously did.

So, how do you ensure you can buy enough inventory to capitalize on the sales you’ll receive and avoid running into a stockout?

You can find Part Two of how an eCommerce Line of Credit from Loop could allow you to buy the right amount of inventory to capitalize on your growth and improve your margins here.