Growing a business in a recession #EUCatalyst

By Chris Dawson May 28, 2012 - 12:43 pm

iwoca hosted a session at ChannelAdvisor Catalyst today with a panel of established sellers and industry specialists to give an insight into their businesses covering everything from financing, sourcing, marketing, inventory management and logistics.

Christoph from iwoca kicked off with an overview of UK Ecommerce in the midst of a recession. We’re doing surprisingly well – The UK is the crown jewel of Ecommerce with the 15%+ growth forecast on top of the £70 billion online retail sales annually.Online retail is predicted to be as high as 23% of total retail by 2016 with £1 in every £4 spent being online.

John Pemberton, Founder of GMDC Global explained that his growth is coming from two sides, general Ecommerce growth but also by expanding onto new marketplaces. Maksim Burdilov, Founder of Smart Parts is seeing growth of 100% year on year mainly through embracing new marketplaces as they open, for example Amazon Germany and expanding the number of product lines he carries.

There’s definitely great opportunity for online retails and Alistar White, Founder of Ultimate Styling highlighted Amazon FBA as his intended way to expand. John doesn’t see the UK as the key for growth but sees cross border sales as the biggest opportunity for expansion. He pointed out that for the past year the Euro has been attractive against Sterling. However being unsure of the situation in Europe he is looking to countries such as Australia and Brazil where there are significant trading opportunities along with favourable exchange rates.

One of the issues all panelists agreed on was that finance was an issue. With unlimited funds they’d all invest in more stock and smarter ways to handle the stock, with two agreeing that Amazon FBA was the way to go. John accessed an EFG loan underwritten by the government. However once pre-approved it took almost seven months before the funds were released including the government changing the scheme in the middle of the application process.

Alistar and Maksim’s businesses are both self financed. They both started with an initial investment and have expanded their businesses from the profits they generate. Growing a business without external finance is definitely possible although it can mean a business will grow slower than if they were able to access finance.

Anthony Trollope from The Wholesale Forums said he sees many start up businesses relying on credit card borrowing to fund their first stock purchases. Others are relying on friends and family but for those without collateral traditional bank finance is almost impossible to access. The most likely way to access finance would be a loan guaranteed against your personal house.

The opportunities for Ecommerce in the UK are great, especially for sellers who are trading overseas. The biggest problem for the panel were access to finance for both stock and warehousing. The warehousing issues can be solved with Amazon FBA, but that means access to finance for stock becomes the biggest block to business growth.

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