For fast-growing retail businesses, the focus on financing shouldn’t be about “risk” – it should be about readiness. With proper planning and the right funding, scaling up an e-commerce or traditional retail business should not feel like a gamble.
Percy Hung, CEO and founder of Choco Up, a provider of flexible, non-dilutive growth financing and data-driven advisory for digital businesses across Australia, Hong Kong, and Singapore, stresses that e-commerce businesses should see funding as an enabler of growth – not a gamble.
“The goal is to close growth gaps before they become barriers.”
Such growth gaps are most evident during the busiest sales windows of the year. Events like Black Friday, Cyber Monday (BFCM), 11.11, Prime Day and Christmas create unparalleled opportunities for e-commerce players to expand their customer base and boost turnover. But they also expose operational vulnerabilities – from strained cash flow to stretched fulfilment networks.
“BFCM is a vital opportunity for e-commerce businesses to capture increased sales,” Percy explains. “But success depends on strategic financial management and the ability to act fast.”
For SMEs, that often comes down to working capital. Maintaining stock at the right levels, investing in inventory forecasting, and capitalising on supplier discounts all require upfront cash. Without it, businesses risk losing sales and dissatisfying customers.
“Online retail moves at speed,” Percy notes. “Working capital financing allows businesses to avoid stockouts, reduce fulfilment delays, and strengthen customer satisfaction. It gives them the confidence to scale.”
Ahead of BFCM, planning is everything
As peak season approaches, founders who plan early and secure flexible financing are best positioned to capitalise on the surge in demand. For those businesses, growth isn’t risky; it is well-prepared.
Choco Up specialises in providing short-term working capital for inventory, marketing, and logistics, as well as practical guidance on scaling SME operations. Businesses can access funding without giving up equity or navigating the complexities of traditional loans. Funds drawn down can be repaid via an automated deduction from online sales, providing a seamless, risk-free financing solution.
As a past founder of e-commerce businesses, Percy learned key lessons about planning for BFCM and other high-profile sales seasons, which began with starting early and planning for various scenarios. “You need to lock forecasts, inventory, and financing three to four weeks out, and run best, base and worst-case models for trading.”
“Don’t rush big decisions: Timing matters. Make sure your decisions around expansion, market entry, and major hires follow data and capacity – not hype.”
Striking a balance between growth and profitability for an e-commerce startup is never easy, and the high-profile opportunity to boost sales that BFCM offers can be a double-edged sword, Percy warns.
“Balancing the acquisition costs associated with BFCM, and the traditional level of discounting that often drives volume during this period requires strategic thinking and spending – not just aggressive discounts.
“Acquisition costs inflate unpredictably due to fierce competition among e-commerce sellers around this time of the year, so it is critical to cap acquisition costs. Set guardrails on your customer acquisition costs per channel.”
Another key strategy is to carefully assess your operational scalability, Percy advises. “Test your supply chain and logistics to ensure they can handle the surge in volume without collapsing or causing costly delays.”
The profit vs discount conundrum
Despite appearances, it is possible to be profitable despite the cost of customer acquisition and discounting during BFCM. How do you achieve that? Percy offers three smart strategies:
“Firstly, shift your budget to high-intent audiences with high intention rates and owned channels as CPMs inflate. During peak seasons, multiple retail brands see two to four times higher conversion rates from owned lists versus cold ads, helping preserve contribution margin.
“Secondly, protect your margin with smart promotions: Tiered discounts, bundles, and loyalty multipliers will always beat flat, one-off discounts by lifting perceived value and average order value.
“And thirdly, use data-driven decision-making to adjust promotional tactics in real time. Look at what is working and what is not, and tailor your promotional campaigns and channels accordingly, to optimise your response – and sales.”
One e-commerce customer of Choco Up that achieved significant success last BFCM by adopting these strategies is BatteryMate, a Sydney-based retailer selling thousands of types of batteries.
“With its broad SKU set, variable demand, and cash tied up pre-peak, BatteryMate aced its demand forecasting and secured extra capital to pre-buy inventory without straining its cash flow. The company even managed to expand its product range to offer more battery models and boost sales further.”
Three lessons for all year round
Of course, a successful e-commerce growth strategy should not be focused on a single peak season: Successful online retailers are building customer loyalty all year round – and those who do will build sales naturally.
However, all growth comes with the challenges of scaling up, managing cash flow, and understanding customers. Percy offers three key tactics for managing growth all year round:
- Listen closely, learn quickly, and co-build with your customers – even when it gets messy.
- Growth is about solving real problems step by step – not chasing perfection or shiny trends.
- Understand your data: Measure what really moves your needle and focus on metrics that align to your business’s core value and economics.
Choco Up recently released a report titled A Founder’s Guide to Thriving in Peak Season. The report explains in detail how SMEs can plan, manage and finance growth during the moments that matter most.
