Conquering the eCommerce supply chain crisis

By Karlyn McKell | November 03, 2021
Conquering the eCommerce supply chain crisis

Across the globe, consumers are ready to buy, but retailers are struggling to keep online inventory in stock due to a supply chain crisis that’s been years in the making.

We’re seeing disruptions like never before due to increased demand, inventory shortages, rising shipping costs, and laborers leaving the workforce. And experts predict it’s going to get worse before it gets better.

The good news is you can conquer the chaos and keep your eCommerce supply chain moving and growing. The below insights will allow you to not only navigate the crisis, but scale your store despite logistical challenges.

A Closer Look at the Supply Chain Crisis

The COVID-19 pandemic both amplified and created new vulnerabilities in the supply chain. Factory closures at the beginning of the pandemic led to inventory shortages as demand skyrocketed post-lockdown. Savings and the desire to buy increased with the introduction of stimulus checks and spending cutbacks on travel and transportation.

Manufacturers are still struggling to recover as they experience the same challenges getting raw materials as sellers experience getting the final products. Shipping costs continue to rise as the workforce declines and ports around the globe are backed up.

Each link has flaws creating significant delays.

According to the Institute for Supply Management survey, 75% of U.S. businesses have reported logistics disruptions as a result of the COVID-19 pandemic.

These delays come as the cost to ship a 40-foot container between the U.S. and Asia has increased 500% since the same time last year, and more than 20 million containers are stuck at ports globally.

How to Protect Your ECommerce Business From Supply Chain Disruptions

There are multiple links in the supply chain that have vulnerabilities. As an eCommerce seller, many of those disruptions are beyond your control. Focus on protecting your business by strengthening the links you can influence, such as the suppliers you choose to work with and the technology you utilize.

1. Invest in Resources That Get You Out of Crisis Mode

When you experience logistics disruptions, it’s easy to slip into a survival mindset where you’re reactive and stressed. Investing in the right resources and technology will help you stay proactive and profitable.

Utilize technology to monitor each step in your eCommerce supply chain – from procuring a product batch to inventory reaching your buyer. Our free supply chain planning software lets you get a bird’s-eye view to prevent surprises and allows you to focus on growing your business.

Forecasting technologies are another excellent investment, especially in a time where you can’t rely on data from years past to manage your logistics system.

2. Forecast Future Supply Chain Orders

Logistics disruptions are inevitable. Forecasting utilizes past and present data, as well as trend analysis, to form predictions. Creating a plan based on forecasts is the best way to keep momentum when you experience something unexpected.

Forecasting each step in your eCommerce supply chain makes it easier to pivot when disruptions occur. When you have a complete picture, you have clarity on adjustments that minimize impact. You may not have those insights otherwise.

3. Maintain a Healthy Cash Flow

As they say, “cash is king.” Having cash available, rather than waiting for on-hand inventory to become cash, accelerates your growth.

Adjusting as a response to logistics disruptions can cost money. You may have to pay more for manufacturing or shipping as costs rise. You may also need to increase your advertising budget to stay competitive.

With cash-on-hand, you can respond to consumer behavior by reordering inventory or launching new products as needed.

And importantly, having a healthy cash flow also allows you to pay yourself while your store reaches its full potential, rather than being money tied up in the business.

Increase your cash flow by finding a reliable and flexible source of capital. 8fig offers equity-free capital that responds to the fluctuations in your business.

4. Find Dependable Suppliers & Manufacturers

It’s easy to choose the most cost-effective supplier or manufacturer, but it’s critical to have resources you can rely on to avoid supply chain disruptions. It may mean you pay a bit more upfront, but trusting you’ll get your product is invaluable for your eCommerce supply chain.

Vet your suppliers to make sure they offer both quality and dependability. Find a team you can trust, and then work to build relationships with them rather than switching suppliers each quarter.     

According to the Institute for Supply Management, 53% of U.S. businesses struggle to get insights on their eCommerce supply chain from suppliers overseas. End-to-end visibility lets you know as early as possible if there’s a potential problem. If there are logistics disruptions, you’ll want your manufacturers and suppliers to know and like you to get support when needed. 

5. Expand Your Store With Confidence

Being an eCommerce seller in a supply chain crisis can certainly be overwhelming, but you are an 8-figure seller in the making. You’ve got business savvy, and a product consumers want; otherwise, you wouldn’t be where you already are.

And consumers are ready to buy. According to a survey by Deloitte, the forecast is bright this holiday season.

  • 73% of shoppers are expected to spend more this year
  • 40% of retail executives expect double-digit online channel growth

You can conquer the eCommerce supply chain crisis. Avoid slipping into a survival mindset and remain growth-focused in 5 ways:

  1. Find resources and technology that get you out of crisis mode. 
  2. Plan out your logistics and forecast for growth.
  3. Find a reliable source of capital to maintain a healthy cash flow.
  4. Work and build relationships with dependable suppliers and manufacturers.
  5. Stay confident. The buyers are there, and you can strengthen your eCommerce supply chain.

8fig is here to help you forge a future not limited by supply chain disruptions. We offer flexible, equity-free capital continuously aligned to your logistics needs. Set up a free 8fig Growth Plan and receive full access to our supply chain planning software, and apply for capital today. 

Your 8-figure business awaits.


Business Insider | Deloitte | Supply Chain Dive | Moody’s Analytics

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