How ecommerce businesses can turn an awkward liability into an earning asset
It’s not news that the world of e-commerce sales is changing every second of every day. Fifteen years ago, businesses were beginning to experiment with e-commerce, selling products on a marketplace or through an online store, and most were relying on an Excel file to track sales or using QuickBooks for accounting. At the end of each month or quarter, sales data was sent over to an accountant or bookkeeper to manually sift through—and this could take up to a month. Once the sales data was entered, there was still no guarantee that anyone would be able to truly understand the financial health of the business.How to make your data dance with the business instead of against it. #Webgility Click To Tweet
Fast forward a few years and e-commerce has grown at hyper-speeds globally, on social media, on every known device, and in the cloud. What’s more, now there are dozens of different sales channels on which to sell, fragmenting the massive amounts of sales data and adding more mystery to the puzzle. Unfortunately, this data still needs to be compiled, reconciled, analyzed, and acted upon for accounting and tax compliance, let alone for business development or growth. Sure, there are dozens of business applications standing by to help carry the data load, but often these apps are not integrated with one another, making relevant info ever more siloed. Suddenly the work has exceeded the scope of bookkeepers and accountants and even e-commerce business owners, who are often left with no resources to help them grow their businesses.
In addition to selling on different channels, an online retailer may use as many as 15 separate applications to run day-to-day operations, many of which do not integrate with one another. When a single sales order can require as many as 15 touch points, an online retailer doesn’t stand a chance against massive data entanglement. So all this sales data—which should be a great asset from which to learn more about retail sales and cycles—turns into a tremendous liability. And while paying for data entry and a business intelligence tool is certainly an option that many business leaders choose, even that lacks useful analysis and understanding of sales patterns, margins, and realistic goals. Fortunately the simple answer here lies in integration—connecting all data and operational systems is the solution that will lead to clarity, perspective, and synchronicity.
The truth is, multi-channel sellers who embrace today’s holistic online business solutions are often far more likely to become true experts in their area of sales. By embracing their data and making sure their systems speak to each other, e-commerce businesses are ultimately far more capable of scaling than those who remain in the world of analog data entry. Pulling back for a holistic view of the business empowers online retailers to stay ahead of their business. Driving revenue growth is easier with greater insight into the bottom-line, and deeper financial insight is essential for smarter business strategy.
What insights are needed to scale online? For starters, it’s important for an online retailer to know their most profitable items. Understanding margins helps determine the limits of individual store pricing as well as the limits of the market at large. And what are the buying habits of repeat customers? Who are their most valuable customers and what is each customer’s total lifetime value? What is the true cost of getting a product to any given customer? How do you measure efficacy of marketing campaigns? How do you know the marginal and total impact of selling on a marketplace? And how do you lower costs while increasing sales and profits? These are just a few of the many important data points multi-channel e-commerce businesses should seek, understand, and be prepared act upon.
Truly useful integrated solutions and the data they yield save owners time and guide them to answers they never thought to ask about their business. And because the pace of e-commerce is so fast, it’s crucial for business tools to operate in real time, so data from sales and operations can be analyzed immediately, not at the end of the quarter. With knowledge and access to their KPIs, e-commerce business owners can get in step with the business and become their own trusted financial advisor. By integrating e-commerce data with inventory, marketing, shipping, and accounting, online sellers can make the data dance with the business instead of against it and take the lead when it matters most.