Keep growing with your webshop: 3 tips for optimal cash flow

The first quarter of a year often provides excellent new growth opportunities. Suppose your cash flow allows it. Perhaps you have bought the extra stock you need to store somewhere, or you are now investing heavily in marketing campaigns to attract visitors to your webshop again. You do all this even before orders start flowing in. How do you optimise your cash flow to keep growing this year?

To get your cash flow in order, the first thing you can do is look at what is going out. The best thing is to reduce these costs wherever possible. After all, you can record sales, but if your expenses tower above them, you are nowhere. So you can negotiate more favourable terms with your supplier, but this is not within your control. What you do have direct control over is your inventory management.

Those who buy smart have some

It is challenging to maintain stock levels without buying in excess, especially during a peak. After all, stock comes at a high cost: you must buy far in advance and rent your storage space. And if you overstock, you will have less money in the coffers. Indeed, if you have to sell excess products at a discount, less money also comes in.

To make your stock more efficient and cheaper, calculate your ideal purchasing. You can track these figures manually, but this is a lot of work. As an Active Ants customer, you can easily view this and more data in our WMS system. Here you have real-time insight into your warehouse movements, stock numbers and turnover data. As a result, you only buy a little. And the less money tied up in stock, the more money you free up for your operations.

Make your cash flow constant

Where you cannot reduce costs, you can at least make them more predictable. By doing so, you create a constant cash flow. After all, as a webshop, your costs can vary a lot depending on how many products you sell. After all, the more orders you place, the more money you spend on packaging, shipping and staff. This all weighs on your potential profit.

If you outsource your fulfilment, you pay a fixed price per order for storage, packaging and shipping, whether 10 or 10,000. If you then sell more, you don't automatically incur more costs. As a result, your operating profit is much higher. This difference is most remarkable at high sales volumes, such as during the December peak.

After all, a fulfilment party can do more work for this amount than if you were to do it yourself. Personalised packaging costs you a lot of time and work. You may need to hire extra staff for it. At Active Ants, we use a packaging machine that can print your personalised design. Other time-consuming tasks, such as your returns management, can also be outsourced to us. This will increase not only your operational profit but also your service level.

Predict your cash flow

Knowledge is power, especially when it comes to your cash flows. You can keep an overview of this yourself, but this takes a lot of time and is also prone to errors. An administration software is no luxury when it comes to optimising your cash flow. It can also give you additional insights, such as your profit margin per product. Active Ants customers can view daily sales and other current turnover data in our WMS system. We also think along with you by offering an extra generous payment period of 2 to 3 weeks.

Once you have insight into your cash flow, you can make better business decisions. For instance, do you lean too much on one sales channel? You could invest in other types of media to reduce business risks. Is one sales channel performing poorly? You can adjust your marketing accordingly or conclude that your money is better spent elsewhere.

In addition to this up-to-date data, you can use software to forecast your future cash flow. At Active Ants, you can use our unique forecasting tool for this to see how your sales and turnover will develop. This allows you to estimate when you will have less money to spend and avoid cash flow problems. You can also determine the best time to invest. This way, you can continue to grow your business, even after the busy December month.

Working capital in order with Active Ants

With a good cash flow, you can pay your bills, keep stock, and invest and grow your e-commerce business. With Active Ants, you can free up working capital through intelligent inventory management, increased operational profits and real-time insight into your cash flow. This means you only buy a little and can offer a higher service level to your customers. Moreover, you avoid a tight cash flow and know exactly when to invest. This leaves your hands free to focus on marketing and strategy.