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No matter what their target market, every successful e-commerce business depends on its cash flow. Indeed, studies have indicated that as many as 82 percent of business failures can be attributed to poor cash flow management.
And while there are many issues that can affect cash flow, few are more important for e-commerce entrepreneurs than their ability to make sound decisions based on supply chain data. 8fig, an e-commerce planning and funding platform, aims to empower e-commerce entrepreneurs to make smarter business decisions with better data.
As Roei Yellin, co-founder and Chief Revenue Officer of 8fig explains, “E-commerce supply chains are complex and made up of many interconnected stages, each of which incurs expenses for the seller. Since e-commerce brands must pay these various supply chain costs well before they get their product in stock or see revenue from sales, they often end up in a cash flow crunch. However, with sufficient tools to monitor each stage of the supply chain, sellers are able to take control of their cash flow management and ensure financial stability.”
A Free Supply Chain Planning Tool
A key part of 8fig’s offering to e-commerce businesses is a free supply chain planning tool that is available to businesses of all sizes.
As Yellin explains, “8fig’s planning tool allows sellers to map out the movement of goods and capital across their supply chain in order to visualize their cash flow over time. This allows them to identify areas where compounding expenses may put a strain on their working capital and make adjustments accordingly. 8fig’s planning tool works on a product-by-product basis. This gives eCommerce sellers a better understanding of their full financial reality and the intricacies of each product. They are then able to accurately plan their cash flow and growth over the long term.”
This visualization of the product lifecycle is quite in-depth, including vital metrics such as cost of freight and logistics, potential marketing expenses and more. This is matched with demand forecasting and projected sales performance for the product line so that entrepreneurs have a better understanding of the pricing strategies and sales numbers that would be necessary to turn a profit.
Translating and Visualizing Financial Data
Ask Yellin what makes 8fig’s platform special, and he is quick to cite its ability to make cash flow management more understandable to e-commerce founders, while also giving them added flexibility.
“Our unique supply chain planning tool gives sellers the ability to map out their cash flow across the supply chain for each product. Then, they can plan their cash flow and optimize their supply chain to better suit their needs. We also provide eCommerce sellers a sales analytics dashboard complete with sales metrics, forecasting data, benchmarks and more. We then provide funding based on this information, ensuring a cash flow-friendly payment and remittance schedule. Not only that, but our funding plans are flexible. When we say flexible, we mean that sellers can adjust any aspect of their plan in real time to reflect the natural fluctuations of their business.”
With such data in hand, e-commerce entrepreneurs have the information they need to better understand the associated costs with the various individual parts of their business.
This in turn makes it easier to understand the best course of action for each product line — fueling decisions such as when to order a particular product, how much inventory to order and how much should be spent on marketing.
This data also makes it easier for business owners to evaluate these decisions in light of their cash flow and sales forecasts so they can implement actions at the right time to achieve the biggest market impact. When presented in an easy-to-understand visual framework, decisions based on better data and key activities, such as opportunity cost analysis, become more efficient.
Equity-Free Funding Options
In addition to its free supply chain planning tool, 8fig is enabling e-commerce business owners to follow through with their decisions by providing equity-free funding based on their supply chain data.
“Unlike other funding sources, which provide capital as one lump sum, 8fig funding is continuous,” Yellin explains. “After analyzing sellers’ supply chain cash flow, we identify the stages where they are short on working capital and inject cash into their business continuously, right when they need it, over and over again. This ensures a cost-effective and low-risk funding plan that fosters growth. Remittance schedules are separate and custom-built for each seller’s unique needs to ensure cash flow stability.”
Notably, the supply chain planning tool enables users to adjust unit economic expenses based on the projected funding remittance schedule to ensure the viability of a venture. Rather than making decisions for the entrepreneurs, the supply chain planning tool and funding model aim to work together to help e-commerce founders make the best decisions for their business’s needs and goals. This also helps e-commerce businesses avoid taking out higher-interest loans or utilizing equity-based investments as they try to scale.
With funding available to sellers on Amazon, Shopify, BigCommerce and other leading e-commerce platforms, 8fig’s unique model is able to facilitate a long-term relationship that helps sellers to scale successfully and better manage their supply chains.
Better Data for Better Decisions
“Without accurate, high quality data, sellers are unable to make educated decisions about their business and frequently end up running into trouble,” Yellin says.
“Countless sellers lack a full understanding of their cash flow across their supply chain due to a shortage of data. This can lead to a cash flow crunch, debt, and even bankruptcy. Once sellers gain control of their cash flow across their supply chain, they are able to stabilize their finances and begin the process of growing their business.”
By pairing a free supply chain planning tool with a flexible funding model that is cognizant of ever-changing cash flow situations, 8fig seems well poised to help others accomplish their e-commerce growth goals.