Step 1: Know your contribution margin by channel
Investors quickly look past revenue to what is left after product cost, fulfilment, payment fees, returns and the marketing spent to win the order. Break this down by channel — your own site, marketplaces, wholesale — because the answer is often very different.
Step 2: Show customers come back
One-off sales driven by paid ads are fragile. Group customers by the month they first bought and show how many return and how much they spend over time. Rising repeat purchase is one of the strongest signals an ecommerce investor can see.
Step 3: Pick the right kind of money
Ecommerce has more funding options than most sectors because stock and receivables can be financed. Using equity to buy inventory is expensive dilution. Consider revenue-based finance for marketing, inventory finance for stock, and equity for things that build long-term value.
- Revenue-based finance: repaid as a share of sales, suits predictable marketing returns.
- Inventory or trade finance: funds stock against purchase orders.
- Equity: technology, team, new markets and brand building.
Step 4: Explain where AI changes the economics
If you use AI, tie it to a number: lower returns from better sizing advice, higher conversion from personalisation, less wasted stock from demand forecasting, lower support costs. If you are selling AI tools to merchants, show the uplift your customers get and how you charge for it.
Step 5: Prepare the data room investors expect
Have monthly trading figures, cohort data, stock levels and ageing, supplier terms and platform dependency ready. Be open about reliance on a single marketplace or ad channel and what you are doing about it.
Ecommerce funding options compared
| Option | Best for | Trade-off |
|---|---|---|
| Equity | Technology, team, new markets | Dilution and investor expectations |
| Revenue-based finance | Marketing with proven returns | Repayments rise with sales |
| Inventory finance | Seasonal or large stock orders | Secured against stock, fees apply |
| Selling the business | Founders ready to exit | Loss of control; see our sell-side guidance |
Questions to prepare before you pitch
- What is your contribution margin per order after marketing and returns?
- What share of first-time customers buy again within a year?
- How dependent are you on one marketplace or ad platform?
- How much of the raise funds stock versus long-term capabilities?
- Where does AI measurably improve margin or conversion?
How KJ Enterprises evaluates ecommerce businesses
KJ Enterprises has built and run ecommerce brands through its Brands Lab group, so we look closely at contribution margin, repeat purchase and operational discipline. We are open to growth investment and to acquiring established online brands; owners considering a sale can also visit our Sell Your Business page.
If that describes your company, you can apply for investment. Related reading: the complete ecommerce funding guide and how to raise for a marketplace.
Frequently asked questions
Should I raise equity to buy stock?
Usually not as a first choice. Stock is often cheaper to fund with inventory or trade finance, keeping equity for things lenders will not fund.