As a business owner of a growing e-commerce company, you’re likely feeling the mounting pressure of supply chain issues, increased inflation, and changing sales tax nexuses. While these challenges are concerning, you would do well to see all of the opportunities on your horizon.
Innovative e-commerce accounting software solutions and the right financial professionals on your team can help you navigate these challenges and emerge on top of the e-commerce food chain. As e-commerce evolves as a whole, 2025 will present emerging businesses with acquisition opportunities and an ever-growing market flooded with consumers shifting to an online purchasing model.
At Fully Accountable, our team of accounting controllers and fractional CFOs combine the latest e-commerce accounting software with superior business strategies. If you’re looking to navigate the challenges e-commerce businesses face in 2025, you need foolproof financial directives and a confident approach. Continue reading to learn financial strategies for businesses that will help your e-commerce business grow.
Combating Inflation
While inflation has come down significantly since mid-2022, it’s still above average. Much of this is due to the supply chain issues facing e-commerce companies.
Housing, cost of labor, energy – you name it – prices are up. Business programs such as the Paycheck Protection Program have stimulated the markets. Because the government has been giving consumers money, businesses have been able to sell despite inflation. With those programs winding down, it remains to be seen whether consumers will continue their buying habits. This type of activity has recession written all over it and e-commerce businesses would find it wise to implement contingency plans.
E-commerce companies should plan for continued inflation, which means higher inventory, labor, and shipping costs. Essentially, you should plan on everything being more expensive in 2025.
Beware of Interest Rates
The Federal Reserve raised interest rates several times since the pandemic, making it more expensive to borrow money in the hopes of reducing inflation. With inflation trending down in 2024, the Fed is finally lowering interest rates, but the wheels of government are infamous for moving at a glacial pace. Because of this, e-commerce businesses must closely consider how raising capital will affect their cash flow.
E-commerce business owners should plan for more expensive business loans and credit lines. They should consider refinancing loans due to historic lows and try to lock in rates for debt if they can. Lastly, if you are considering financing, you should do it ASAP.
Supply Chain Problems
Supply chain issues were a major concern during and after the pandemic, but the issue has largely diminished in recent years, but it’s more present than ever in the minds of e-commerce store owners who rely on overseas suppliers.
Not meeting demand leads to lost sales, which can ruin financial projections. You should order in further advance, carry more inventory to account for delays, budget for increased costs, and stay informed of price increases.
Utilize Acquisitions
Recently, there have been numerous acquisitions for businesses conducting eCommerce. Since there is substantial cash flow in markets, aggregators have begun buying direct-to-consumer businesses. In other words, if you are consistently turning a profit, you’re in high demand right now. Private equity firms are also looking for returns on their funds raised.
With the continued increase of eCommerce businesses, the long-term benefits of acquiring eCommerce businesses are appealing to larger companies and institutions. Whether you’re looking to buy an eCommerce store or sell your own, 2025 will be a good time to consider both.
Increasing Payment Methods
Customers will continue seeking more convenient payment methods in 2025 and eCommerce businesses need to respond to the increased demand. Providing a full suite of payment options is an easy way to increase sales. Decreasing customers’ checkout time builds trust in your brand and ensures your customers notice how convenient you make their purchasing experience.
eCommerce companies should also be on the cutting edge of technology. Here are some of the payment options eCommerce companies should consider implementing in their businesses:
- Apple pay and fingerprint payments through smartphones: half the iPhone users out there utilize Apple Pay for purchases, with that number growing every year. E-commerce businesses would do well to implement advanced payment methods into their company payment structure.
- Bitcoin and other blockchain currencies: cryptocurrencies continue to affect consumers’ daily lives and your eCommerce business should capitalize on this growing number. More and more companies are considering these valid payment options.
- Fintech options: Fintech options such as Klarna make it possible for customers to buy now and pay later. PayPal, for example, has implemented a “Pay in 3 offer” making it easy for customers to spread out their transactions over longer affordable durations.
Instant Analytics and Sales Optimization
E-commerce platforms, such as Shopify, have analytics tools for tracking sales, customer demographics, inventory, and more. With real-time analytics in-hand, upcoming e-commerce companies can adjust to a rapidly changing markets and streamline the sales process.
If you combine these tools with machine learning, you can make more informed sales projections and determine where you are losing sales, minimizing your bounce rate and cart abandonment.
Excitement Around Growth
Despite all of the obstacles the pandemic has brought, there still remains a silver lining. Throughout the pandemic, e-commerce has increased and shows no signs of slowing. E-commerce retailers face market opportunities if they navigate the supply chain and inflation challenges correctly. Acquisitions and inventory control are critical for e-commerce companies wanting to stay relevant.
With the threat of further lockdowns and the pandemic still looming, consumers are likely to continue to commit to their purchasing habits. In other words, online shopping is here to stay. The more companies can take advantage of this shift, the more prosperous they will be in the future.
Fully Accountable Will Guide You to Sustained Financial Success In the New eCommerce Landscape
The past few years represent a seismic shift in the business landscape. The ongoing pandemic has fundamentally changed the way consumers view their shopping experience. With the overall market volatility caused by the pandemic, there is a tendency for companies to shy away from the challenges they face.
Change opens doors for advancement, and the eCommerce companies that take advantage of these emerging opportunities will achieve the success and growth they desire.
Hiring a team of financial professionals such as Fully Accountable maximizes your ability to make smart strategic financial decisions and take advantage of the new e-commerce landscape. Navigating the e-commerce landscape can be tricky and present high-risk rates. With supply chain issues, changing tax nexuses, and high competition, you need proven strategies from financial professionals who know how to get you results.
Contact Fully Accountable today and put your eCommerce business’s financial success in the hands of controllers and fractional CFOs who understand how eCommerce is changing. The opportunities are ripe for the picking; you just need to know where to find the fruit.
