Why managing costs is key to growing your retail business

Retailers operate on notoriously thin margins, which means every cost counts. Here’s how to spend smarter with hummpro.

In retail, effective cashflow management is all about keeping your costs under control. From big-ticket items like rent and payroll, to smaller ones like replacing the light globes in your shop or office – costs can quickly add up and eat into your margins, which are already notoriously thin. And with most retailers purchasing stock upfront, once you fall into a cycle of negative cashflow, it can be hard to get out.

While you might be able to negotiate attractive credit terms with your suppliers, that’s not always an option when it comes to buying digital advertising on Facebook or paying your utilities bill, for instance. This is where a buy now, pay later solution like hummpro comes in handy. You can use it to cover your everyday business expenses without impacting your cashflow, and when it’s time to make your interest-free repayment, you can choose a timeframe that works for you based on your finances.

Here are some ideas for managing some of the biggest costs in a retail business — and how hummpro can help.

Buying inventory

Having enough stock to meet consumer demand, but not so much that you’re stuck with leftover product at the end of the season, is a delicate balance. And even the best retailers struggle to get it right. Using your historical transaction data and market insights to inform your buying decision is a good way to ensure you’re investing in the right amount — and right type — of inventory.

With access to up to $30,000 in interest-free finance, you can also use hummpro to order stock and get at least 30 days before you need to make a repayment, shortening the gap between the money leaving your account and sales flowing back into your business.

Running a store

Together with wages, rent payments represent the biggest monthly expense in most retail businesses. While the last few years have seen many bricks-and-mortar stores close down, the reality is that over 90% of sales are still made offline. Making sure your store is profitable when you factor in all of the operating costs is key. This includes everything from your fixtures and fittings and point-of-sale system, to your business insurance, staff wages and signage.

You can use hummpro anywhere Mastercard is accepted to pay for the things you need to operate your store, such as packs of thermal paper for your cash register, or a cleaning service to tidy up your shop after hours,

Providing a great customer experience

Retailers pay $87 on average to acquire a single new customer. While this isn’t as high as some industries, when you consider how many sales you need to make just to break even, it can really add up. That’s why customer loyalty is so important in the retail sector. It’s generally much cheaper to persuade an existing customer to make another purchase than to convince someone new to buy from you.

Offering discounts and perks to incentivise repeat purchases, or sending customers a gift on their birthday, are popular ways to drive loyalty. But if you’re worried about the return on investment, remember you can always defer your hummpro repayments interest-free to get some more breathing room.

From buying inventory to fitting out your store, hummpro can help you keep the cost of running a retail business under control.