The immediate, post-referendum Brexit hysteria is fanning the flames of uncertainty and changing the UK political and economic landscape on an hourly basis.
Aside from the various macro effects, this kind of uncertainty presents online multichannel sellers with daily, real-world issues around supply, demand, fulfilment, profit and cash-flow. In this sense, it’s no different planning for and reacting to any other seismic event. Sellers need to manage the uncertainty and protect their assets, their sales and their cash, until they’re navigating less stormy waters.
We’ve long been selling the benefits of diversifying your operations across other channels and into cross-border trade where you can access less competitive markets or regions with serious growth potential. That’s not going to help you before the summer’s out, unless you’re doing it already, so here are 4 things multichannel sellers can be doing right now, to help themselves.
Hedge your (currency) bets
In the aftermath of Brexit on the 23rd June 2016, UK-based sellers are taking a major currency hit on the goods they import from overseas and the items they sell in a foreign currency which may need repatriating at some point, into pounds sterling. Some of the bank and marketplace currency charges can be quite onerous.
‘Natural’ hedging involves looking to sell more products where you’re buying them, but this may not be something you can switch on straight away. You might not have the time or inclination to become a financial hedging guru, so enlist the help of currency experts, like Volo partners Currencies Direct or WorldFirst. These specialists often offer much improved exchange rates, and you can use them to hold foreign monies from your historical overseas sales to fund your ongoing purchases in the same currency.
Get to know your cash flow
There’s never a bad time to get friendly with your data. You should review your low margin items and your sales forecasts and make sure you understand the short term financial impact. Take a look at your pricing and see if you can raise prices in some areas while still staying competitive. Check your competitors’ responses to the current squeeze on profitability, either by manually sampling or using automated repricers.
This is when you really need good visibility into your stock levels, and the different speeds your stock is moving at, because it informs how muck stock you need to re-order. This is probably not the time to be securing marginal discounts by ordering larger volumes. The less you can re-order, without selling out, the better your cash flow. The less dead or slow-moving stock you can be stuck with, the better.
One option you might consider is using drop-ship arrangements, which means that you can avoid importing and holding stock in your own warehouse. This de-risks your operations to a degree, since you can simply fulfil your orders on an ‘on demand’ basis. This way you’re only paying for the stock you’re selling and – depending on your contractual relationships – when you’re selling it.
Of course, when you go virtual, or at least partly virtual, you lose some control over the order fulfilment and shipping side of your business. With reliable drop-ship partners, however, the virtual option gives you flexibility and reduces your financial exposure.
Rent your resources
Finally, a word on resourcing. Right now you’re probably looking at your plan for the rest of the year and re-evaluating your level of confidence – or nervousness – around how you resource that plan. You want to keep moving, and you want to do it wisely, with the best chance of success, right?
You could always rent that resource, rather than doing it yourself. The Volo network of partners is a bank of specialist, on demand resources – from niche experts through to full managed services provides – that you can hire, rather than taking on the resources directly. Operational expenditure can often trump capital expenditure in uncertain times.
That’s the here and now, but who knows what will happen beyond the immediate short term? A range of other ecommerce and business experts attempts to peer through the incredibly snowy Brexit crystal ball and read the medium-to-long term runes for ecommerce here and here.