Tips on running an effective e-commerce business
Small Business Guides
8 min read
Whether you are a full-time e-commerce retailer or selling goods and services online as a side gig, these are the tips that will help you build an effective e-commerce business in Singapore.
Move your accounting online
If you want your business to work smarter and faster, online accounting software will be a good investment. A reliable accounting system will help you track and report on key business metrics such as financial state of your business, accounts receivables aging, operating margins and inventory turnover. Having a good handle on these business metrics will help you manage your cash like a pro – and take advantage of new opportunities.
Most importantly, cloud accounting allows you to scale in an easy and cost effective manner. This will free up time for you to focus on running the business and bringing in the sales.
Optimise your inventory management
Managing your goods well is a trade off. You must balance the real cost of holding it with the opportunity cost of sales. Here’s an outline of how you can approach this:
Use actual sales data - time, item, value, payment method etc. to create sales records
Adopt accounting software that integrates with your inventory management system, and use your sales records to create reports
Make demand forecasts using the reports to understand what products are worth holding
Assess the percentage sales and revenue that each item represents to prioritise the items to hold
Factor in lead time for replenishing the item i.e. delivery time, delay, processing time etc.
Inventory optimisation done well, will free up cash and reduce investment in working capital, improve cash flow, reduce wastage and improve customer relations. It’s important that you’re using the right inventory and order management tool for your business - and even better when it connects into your accounting software. Check out these inventory apps that connect into Xero online accounting software.
Understand the importance of business reporting
Business reporting can help business owners identify problems, find opportunities and adapt to market conditions. Every sale, every purchase and every transaction creates data. Business reporting helps you use this data intelligently and inform you on how your business is currently performing, and helps you set the strategy going forward.
When your business data is stored in your online accounting software, you can generate in-depth financial reports in just a few clicks, without the need to enter or calculate your data manually.
A good financial reporting tool will allow you to build accurate and intuitive reports all year round which can shed light on many areas in your business such as:
Identify your most profitable goods or services
Identify late payers
Improve your cashflow
Track your sales trends for more accurate forecasting
Engage with your customers
Customer relationship management is an art. The digital world has opened doors for small businesses to deliver top-notch service and engage in two-way dialogues with potential customers. For example:
Facebook makes it easy to start conversations with people who ‘like’ your business. Other social networks can be used in the same way. Remember, if you offer something of value to your customers, they’ll spread the word about your business.
Email newsletters are still very popular, helping you share news and special offers. Your customers can reply easily, to discuss their options with you.
A Twitter account lets you start discussions with your existing and potential customers. For the best results keep your tweets light, friendly, interesting and helpful.
There are plenty of social media resources online, but an important place to start is learning how to handle any negative feedback, which is much more visible online. Our guide to handling customer complaints will get you started.
Running a business is no easy feat but ensuring you automate as much administrative work as possible will help you go from sweating the small stuff, to big-picture thinking.
It’s great that Xero integrates with other key systems we use like Shopify and Tradegecko. It makes life so much easier that they all talk to each other. Also, using apps like receipt bank that uploads invoices and receipts directly into Xero, is a huge time-saver.
Our customer's story: The Mindful Company
The Mindful Company is a digitally-native jewellery brand that runs on Xero online accounting, Shopify and TradeGecko - e-commerce and inventory apps respectively, that connect into Xero. Find out how The Mindful Company’s founders, Ciara and Ling, can spend more time on their business purpose and less time on the books by using online tools for their business.Read more