Demaurio Clark if you have started an e-commerce business or are already running one for sometimes. Now, you may know the importance of managing your e-com finances well. This post will discuss various levels of e-com finance management to upgrade your revenue to profit.
Essentials of e-com finance management by Demaurio Clark
If you are keeping your business to grow it up or want to sell. It off at some point, profit is an important number to keep an eye on. For this, you have to:
- Do a thorough audit of the business revenues and also assess and calculate what the COGS % is. Figure out what best you can do to bring down that percentage by negotiating. With the suppliers, purchasing in larger quantities for discounts, or switching to another supplier, which is more cost effective.
- There are some “must-have” operational expenses, too, which you may not be able to work around like the e-com platform. All you can do to deal with these is negotiate the rates with service providers and also hosting solutions, etc.
- Figure out your cost of acquisition and also check whether you are heading to profit by targeting or value marketing. Once you get a good hold of these channels, which may work within your limits, try to optimize those.
- Decide about your team and also office operations’ approaches. To find out the unique expenses that move the dial of your business.
- Create a budget and a standard financial operations model and delegate someone to analyze these numbers every month and also reiterate. Always lead the business from a financial perspective.
Once you adopt these strategies as suggested by Demaurio Clark, you may identify yourself as a serious e-com entrepreneur. Who is set to make money from the business? This is a long work to achieve, but it can be quite comprehensive. In terms of the numbers that you need. To monitor and also keep track of your business’s growth.
COGS is the short form of Cost of Goods Sold, which is the primary number you need to control. The cost of goods is the actual price of goods or services you make or acquire and also sell. The things involved in the COGS calculation are the raw materials, goods finished. The labor involved in creating the products or offering services, advertising spent, and the shipping costs.
COGS is also an important number as it can be a make or break deal. For a business in many typical scenarios. If you have a good margin on the COGS, then you have the scope of operating the business profitably. If your margins are shrinking, then it may be tight for the business to move on successfully.
By now, you know the bare basic of what to look for operating your e-com business finances. Well from where you can start building up your success strategy and move forward. Research properly and also find what your requirements are before you undertake it.