E-commerce 101: How To Get Funding?
Updated: Nov 19, 2021
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How to get funding for an e-commerce shop?
In a recent article, we saw how much Covid-19 has made way for an ever-present digitalization of everyday life. With everything going remote at every level of society - from the working world to daily purchases -, so have our interactions, and the flourishing of e-commerce is one among many obvious markers of this behavioral and economic shift.
Today, from the comfort of our home, any conceivable product is merely a few clicks and credit card digits away. However, while prospects of success are appealing to new entrepreneurs, striking gold does rarely come about with the wave of a magic wand, let alone when competition is ever so harshly unforgiving. Not only are ideas primordial when tackling e-commerce strategies, but so is funding for long-term sustainability.
Mapping out a strategy to get e-commerce funding
Whatever the nature of any business endeavor or the line of products meant to be advertised - in our case, be it drop shipping or an e-commerce store - there is no beginning without initial funding. Not only will it be needed at every step of the way but seeking funding is doubly important in the early stages, as there are inevitable expenses to be taken into account when setting up your online platform. It most certainly begs the question of who to turn to to get started. That is precisely what we are about to shine some light on in this article.
Website creation and product research
As an entrepreneur, your starting point, and possibly your least sparing source of expenses, is the search for adequate suppliers and the creation of a functioning user-friendly e-commerce platform. Being the dedicated meeting point of both your customer base and yourself, uttermost attention to detail and overall care are a must in conceptualizing your website, with a particular emphasis needed on reliability, accessibility, and layout. Unless you know your way around designing or are noticeably computer savvy, you had better ask for a professional's assistance.
Once the technical side of things is out of the way and your interface looks and feels the way you envisioned it originally, it is time for you to figure out the logistical aspect of your e-commerce store, that is, the sourcing of the products you wish to sell. Purchasing products and building up stock, discussing the details of your contract with respective suppliers all play an equally important part in setting up your online presence and credibility.
One great predictor of success for any online business is a consistent marketing strategy. Although we have already touched on the importance of market research in another article, we cannot possibly stress enough how impactful well-conducted web marketing campaigns are at ensuring the solidity of a brand. Leaving that part to skilled professionals entails extra expenses, however.
Getting started: self-funding
You will have understood by now that the best possible approach to getting into e-commerce is to not only refrain from making spur-of-the-moment decisions but furthermore weigh in your options. Taking the time to properly work out a business plan will tremendously help you get a clearer look at the big picture and draw up a realistic budget. Once that is done, only then will you be able to determine the most appropriate course of action for extra funding. Now, if your financial means are not lacking, self-funding your platform could very well do the trick.
When branching out, if any, the financial means at your disposal are decisive and will in part influence the rate at which your e-commerce store grows. Thus, whenever savings are an option, you have everything to gain - or nothing to lose. Not to say anyone should rush headlong money in hand, quite the contrary, but by relying solely on self-funding, you ultimately owe no one money but yourself if things turn out unexpectedly.
Sometimes, the relative personal freedom savings give are simply not enough to enable you to effectively take your project to the next level. In such a case, and before thinking of taking out a bank loan, getting relatives or other trustworthy people you know to either lend you parts of the target amount or even partake in the adventure may prove helpful enough in gathering the necessary sum to pursue your activity.
Whereas the above has its limits as a funding source, crowdfunding, however, could very well be a viable alternative, provided that your project is deemed worthy of interest to draw enough attention. One particularly note-worthy advantage of said method is that backers can at all times, in return for special deals and offers, donate more than the initial goal set for the entire duration of the campaign. A more in-depth internet search will get you several results to compare and choose from.
E-commerce funding solutions
As stated before, applying for a bank loan should come last in your plan of action, given that many banks may ask that you provide a guarantee or give proper evidence of the feasibility of your project. Therefore, always ask yourself whether the amount of funding needed is truly worth the trouble.
To help you find the best-tailored solution to your funding problem, we, at Funding Routes, have been working closely with a list of different providers supportive of young e-commerce entrepreneurs. We have got you covered with the best funding deals on the market and are looking forward to hearing from you!