Fashion ecommerce has become a mature and highly competitive sector. With increasingly high marketing costs and lower margins, it’s necessary to consistently control costs and implement financial management best practices to ensure profitability of ecommerce.
It was a real pleasure to attend the lesson of an expert in the field, Leonardo Pecchioli, whom we thank for this engaging lesson on Financial Management in Fashion E-commerce at the Digital Fashion Academy.
Financial planning is a fundamental activity to ensure profitability of fashion e-commerce and, as explained by Leonardo Pecchioli during the lesson, it consists of specific phases and key moments:
1. Formulation of initial budget assumptions for the next year based on historical data;
2. Creation of one or more budget scenarios;
3. Budget approval (sign-off), essential for operation and alignment among stakeholders;
4. Monitoring of performance and implementation of corrective actions during the year;
5. Adjusting financial forecasts for the current year based on actual performance.
These steps can occur in different ways within companies depending on the financial culture and the size of the company itself. Some companies may anticipate budget preparation, while others may postpone it.
The important thing is to have a shared budget, approved and anchored to measurable objectives.
During the lesson, we explored the meaning and use of key financial KPIs, such as Net Revenue, Gross Margin, Contribution Margin, EBITDA, EBIT, as well as topics like account for Variable Costs and Fixed Costs and the financial management of returns.
Leonardo Pecchioli is the Chairman at Keros Digital SA, in addition to being a former CFO of a global #fashion brand and an expert in #digital and #omnichannel #ecommerce.
#management #commerce #digital”
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