Bean Ninjas’ Inaugural eCommerce Recession Impact Report 2020

9 July, 2020
Wayne Richard

Wayne Richard

14 minutes
eCommerce Recession Impact Report banner

Between the COVID-19 pandemic, a global recession, and the rise in murder hornets in the US, 2020 has been a crazy year. 

To think, we’re barely 7 months in. 😰

We wanted to gauge how six and seven-figure eCommerce businesses were faring through it all. 

Here at Bean Ninjas, we’ve worked with many eCommerce businesses, who are doing between $100K – $9M+ in annual revenue. 

Based on our observations and interactions in the industry, our original hypothesis boiled down to: 

eCommerce businesses with accounting processes and financial systems in place, like cash forecasting, are better off when going through a recession (than those that don’t have those things in place).

But, we wanted to be a bit more scientific than educated guesses and theories. After all, we’re a team full of accountants and bookkeepers. 

So true to form, we dove into our spreadsheets and got to work. 

Inspired by the detailed reports that our friends over at MicroConf, The Dynamite Circle, Ecommercefuel, and Empire Flippers have done over the years, we created our first industry report.  

In our inaugural Recession Impact eCommerce report, we’re sharing our survey findings and analysis, including: 

In a hurry and prefer to download a PDF version of this report for reading later? Click here to download now.


Before we dive into the details, we’d thought it would be important to understand a little more about the types of merchants who participated in our survey. 

Overall, we had just over 100 eCommerce entrepreneurs complete the survey. 

Ecommerce Report Overview Graphic
How are top sellers faring during the pandemic, and what strategies are they using to position themselves for success? Read the eCommerce Recession Impact Report. #ecommerce #BNEcomReport Click To Tweet

Average years in business  

The vast majority of merchants who completed our survey are experienced eCommerce veterans. 

In fact, 77% of eCommerce survey respondents have been in business for at least 3 years.  And, 57% have been in business for AT LEAST 6 years.  

eCommerce length in business

Team size 

As one would expect of a bunch of veteran sellers, most of our respondents have a team.  

In fact, 63% have at least 3 full-time employees on their team. 

eCommerce team size

Type of eCommerce business 

Unsurprisingly, Shopify was the eCommerce platform of choice. 43% of respondents use it as their primary eCommerce platform.

We were admittedly surprised by the low number of FBA sellers. While it could be that many sellers were selling across multiple platforms, including Amazon, we were still surprised that only 6% of sellers listed Amazon as their primary sales channel.

type of eCommerce business
43% of sellers use Shopify as their primary eCommerce platform. #ecommerce #BNEcomReport Click To Tweet


In terms of what these merchants are selling, it varied widely. The largest vertical – outside of “other” – was Fashion and Apparel with 17%. 

business industry


The survey was truly global as we had eCommerce sellers from 6 of the 7 continents fill out the survey. That’s everywhere but Antarctica. ❄️ 

U.S. and Australian eCommerce entrepreneurs comprised the top 2 countries represented at  29% and 31% respectively. 

eCommerce country they are headquartered in

Accounting and financial reporting trends 

As your resident bean crunchers, it is time to dive into the juicy stuff – the financial data and insights. 

Accounting software

Preferred Accounting software

For starters, it was great to see that 86% of sellers use cloud-based accounting software. 

A whopping 71% of the sellers use Xero. Followed in a distant second by sellers who prefer Quickbooks (14%). 

The likelihood of using cloud-accounting software increased, the more revenue a business made. 

In fact, 95% of sellers doing more than $1M in estimated annual revenue used either Xero, Quickbooks or MYOB. 

We’re scratching our heads at the 10%, who are either really big numbers’ people or gluttons for punishment, and still doing their bookkeeping manually through spreadsheets. Why though? 

Doing things the hard way meme

When you do your bookkeeping manually, you are not only wasting valuable time that you could be using to grow or streamline your business, you are also way more likely to run into any or all of these problems:

  • Inaccurate financial records 
  • Paying too much or too little in tax 
  • Inventory planning headaches
  • Cash flow shortages 
95% of sellers doing more than $1M in estimated annual revenue used either Xero, Quickbooks or MYOB.  #ecommerce #accounting #BNEcomReport Click To Tweet

Accounting team

accounting team

This was evenly split, with 48% of sellers doing their own bookkeeping. And, 52% either outsourcing to a freelancer or a third-party service, like ours. 

While we might be biased, there are a lot of advantages to outsourcing your bookkeeping be it through an in-house bookkeeper or a third-party service.  

The main advantage of hiring an in-house bookkeeper is that they can get to know your business inside and out as well as handling all of the day-to-day invoicing and bookkeeping tasks within your cloud accounting software.

You can expect to pay anywhere from $10 to $150 per hour for a bookkeeper depending on the scope of the work and how much experience they need to have.

The disadvantages are increased onboarding and management time.

Pro tip: If you’re going to bring your bookkeeping in-house, we highly recommend that you (the business owner) are well versed in knowing your numbers and financial reporting. That way, you can protect yourself from fraud and also ensure that you know what to look for when you’re working with your internal finance manager.

Now, if you want a more turn-key solution, third-party accounting services, like Bean Ninjas specialize in eCommerce and charge on a monthly subscription basis. We’re highly skilled in setting up accounting software and processing transactions accurately and consistently. We pride ourselves on delivering customer excellence and being recognized as leaders in the accounting space. 

Financial reporting 

business financial report frequency

85% of sellers review their financial reports at least once a month.  And, 46% of those sellers are reviewing their numbers at least weekly. 

We saw a strong correlation between reviewing your financial reports at least monthly and sales increasing or at least staying the same since the pandemic started. 

Pro Tip: Track key financial indicators daily via a scorecard or dashboard (i.e. These are numbers you lose sleep over if uncertain.). In addition, Cashflow, A/R, and A/P should be reviewed and forecasted fortnightly/biweekly and key internal financial management reports, such as your P&L and Balance Sheet monthly.

Cash flow forecasting

cash flow forecast

Considering the number of sellers who were still doing their own bookkeeping, we were pleasantly surprised that a whopping 73% of sellers have created at least one cash flow forecast.

And, 40% create cash flow forecasts at least once a quarter. 

For those who may be unfamiliar, a cash flow forecast can help you estimate how much cash will be moving in and out of your business for a set period.

There was also a strong correlation between annual revenue and cash flow forecasting.  

87% of sellers doing more than $1M in revenue have done a cash flow forecast compared to 73% of all sellers.   

Whether you are looking to create your first cash flow forecast and get into a quarterly rhythm, here are a few tips. 

A typical cash flow forecast should include the following: 

  • Beginning cash balance: The total cash on hand you expect to have at the beginning of the month.
  • Cash inflows: The sources of cash you have coming in each month. This could include cash sales, online sales revenue, or receivables collections.
  • Cash outflows: The expenses your business will incur during the period, including utilities, loan payments, rent, or payroll.

In addition, we recommend creating AT LEAST three different financial models – a best case, moderate, and worst-case.  This is especially handy in a recession where there are more moving variables. 

Michael shares some quick tips for cash flow forecasting in this video.

Want to improve your cash flow and get more confident with your numbers? Learn how to use Xero effectively for your eCommerce business with our free Xero toolkit. This includes our step-by-step guide to getting your Xero file in order, a Cashflow Forecast Template, and a Bookkeeping timetable template to help you stay on top of your finances & get current reporting. Download now

87% of sellers doing more than $1M in revenue have done a cash flow forecast compared to 73% of all sellers.   #ecommerce #accounting #BNEcomReport Click To Tweet

Government funding 

government funding

We won’t lie given the majority of sellers live in places that offered generous, COVID-19 government relief packages. We were surprised that only 60% applied for government funding.

48% of those have received it. The two biggest spending categories were: 

  1. Hiring (or rehiring) staff
  2. Investing in more inventory 

Revenue trends 

82% of sellers have an estimated annual revenue of $100,000 or more. And, 43% are doing over $1 million in revenue. 

Estimate annual eCommerce revenue

2018 vs. 2019 revenue trends 

2019 vs. 2018 Revenue trends

It appears that 2019 was a great year for most eCommerce sellers, with 86% saying their sales either increased or stayed the same year-over-year. 

Recession & Covid-19 revenue trends 

Sales trends since the pandemic and recession started

As one might expect, the number of sellers who have seen sales decline increased. However, this number is less than we would have expected. 

57% of sellers still saw their revenue either increase or stay the same since March.

Interestingly enough, 64% of businesses doing more than $1M in annual revenue saw their revenue either increase or stay the same in Q2. 

This anecdotally matches up with what A2X saw in the same time period. 

Denym Bird of A2X says, “During the last few weeks, A2X saw big MOM growth in not only sign-ups, but also in payouts processed by A2X from our existing clients – this is echoed in one of our connectors, Shopify’s recent financial report for the quarter who reported 62% increase in MOM customer signups.”  

A quote from A2X

And, Gregory Elfrink of Empire Flippers adds, “At the end of Q1 we saw a lot of sellers still wanting to sell their business (nothing out of the ordinary though in terms of supply there) but many buyers were hesitant to pull the trigger on actually acquiring. 

In Q2 we saw the market come roaring back in terms of acquisitions, and towards the end of Q2 we started seeing more eCommerce store owners wanting to sell their businesses. Most of these businesses have either stayed the same or actually have grown over the last few months, so it appears the various things going on in the world did not impact them badly and may have actually helped them with more people turning to online shopping. It still remains to be seen how the rest of the year will play out, but we’re confident that there will be an ample supply of high quality businesses for sale throughout the year, and a ton of buyer wanting to acquire those businesses based off what we’ve seen the last 3 months.” 

A quote from Empire Flippers

Post-COVID-19 revenue predictions 

While the future isn’t as rosy as 2019, 80% of sellers are optimistic that their sales will increase or at least stay the same in this “new normal.”

Post Pandemic and Recession Sales Predictions

Angus Capel of Xero adds, “There are three factors that will likely reshape the future of business in Australia: youth underemployment, generous but time-bound government support and a rocket under online shopping. Year on year to April, pure play online retail increased its proportion of total retail sales by 133 percent. 

Underutilised in the workforce, digital native Millennials and Gen Z’s have a moment in time to enter the eCommerce honeypot while supported by public funds. Online-only micro-businesses leveraging the reach of social networks are more accessible than ever. 

While socially attuned, Millennials and Gen Z’s are likely to be inexperienced with business operation. Good systems, practices and advice based on rich business data will determine their ability to capture profits in markets made more competitive through drastically lower barriers to entry.” 

A quote from Xero

Another indicator of a rosy eCommerce outlook is around hiring. 

Alexander Harling of Dynamite Jobs says, “In March, when the pandemic began picking up, the traffic to our site ( shot up by 50%. However, the new jobs being posted dramatically decreased. Many companies had to cancel their new job opening in anticipation of the worst. 

Now (in June), we are seeing all the numbers up. More companies than ever before are hiring remotely and it feels like everyone is looking for a remote job.

So there is a big trend in work moving remote when possible. What will be interesting to see is if the trend sustains. Companies are facing the challenge of adopting remote culture and learning how to manage team members when they aren’t in the same room. Many companies are treating remote work culture exactly like office work culture and the transition is not going well. For teams to succeed that are new to remote work, they are going to have to adjust their culture and have work focused on results and not just attendance.”  

A quote from Dynamite Jobs

Marketing & advertising spend

marketing changes since the pandemic and recession started

One of the more interesting findings from this survey was around marketing spend. It appears that 38% of sellers have increased their marketing and advertising budget since the pandemic started.

Another 1/3rd have kept it relatively the same. 

And, the final third slashed their budget, presumably to preserve more cash flow.  

Juliana Jackson of Omniconvert says, “A recession always brings out the best and the worst in people. There is no middle ground. That’s how it has impacted eCommerce as well, with some businesses increasing their sales by 25-30% while others were shut down for good. 

The impact of COVID-19 in this industry is undeniable. While it has indeed shut many businesses down, it has also helped digital commerce speed up in terms of growth and development with at least 5-6 years in just 3 months. 

What an eCommerce owner or manager should be extremely aware of is that the consumer has changed. They purchase differently, they have different intents and different emotions that drive their buying behavior. An approach majority of eCommerce businesses had during the crisis, even now where we seem to see a bit towards the end of it, is to focus on customer acquisition only as a growth strategy, however, that has set them back in terms of recurring revenue even more as acquisitions alone are not a sustainable growth strategy. 

This is the time of the consumer and if eCommerce managers do not move towards the consumer’s needs and observe their behavior and craft their online experience based on those well they are doomed in the time to come. 

Customer Experience, Customer Value are here to stay and only a few will understand this the easy way.”

A quote from OmniConvert

Pro Tip: We noticed a positive correlation between sellers who engage in regular cash flow forecasting and the willingness to spend on marketing and advertising. 42% of these sellers have since increased their marketing budget, compared to just 30% of those who don’t do any cash flow forecasting.

Top performing marketing channels Pre and Post-COVID-19 

One of the most interesting observations was that the top marketing channels remained virtually unchanged. 

These marketing channels for eCommerce sellers were:

  1. Email 
  2. Paid Social 
  3. Organic Social Media
  4. SEO 
top marketing channels pre pandemic

The only thing that did change was that eCommerce prioritized paid social a lot more after the pandemic started. This was largely driven by lower ad costs at the height of the quarantines and stay-at-home orders. 

top marketing channels since the pandemic started

Taylor Holiday  of Common Thread Collective says, “Not surprisingly, the cost to advertise (CPMs) dropped substantially in March, crawled back slowly in April and May, and have now returned to their pre-quarantine baselines.“ During that time, we cataloged a number of brands with record-breaking success

What most had in common was (1) joining forces with truly essential causes and (2) offers for price sensitive shoppers that discounted by still drove AOV through either bundles, pay-now pay-later checkouts, or free gifts set at specific cart-value thresholds.

Perhaps even more valuable to brands looking to grow now and through the holidays isn’t data pulled from the last few months but YoY data on cost and ROAS. 

Even though CPMs have normalized, the sky is anything but falling. In fact, 2020’s CMPs are actually 27.11% lower than 2019’s. And ROAS is up 22.03%.

The keys are to (1) examine your own present data within historical context and (2) to work into your head and heart one reality: decreased efficiency at scale is disproportionately valuable compared to misleading metrics like single-account ROAS.”

A quote from Common Thread Collective

In a hurry and prefer to download a PDF version of this report for reading later? Click here to download now.

Business pivots 

business pivots since the recession started

We were a bit surprised by how few companies pivoted their businesses since the pandemic and global recession started. In fact, just 34% of businesses made any significant changes.

Of the minority of businesses that made changes, 69% of them were doing less in $1 Million in annual revenue.  

The biggest shifts were:

  1. Channels – Brands switching from prioritizing wholesale and offline channels to selling direct to consumers, through Amazon, and through their website. In several instances, sellers had reported switching to
  2. Markets – Multiple sellers chose to sell different products to different markets, shifting their portfolios away from industry/niches heavily impacted by COVID-19 eg. tourism, and focused on selling into less-impacted markets.
  3. Spending – Some sellers reduced expenses. Others invested in business strategy by hiring a coach/consultant; hiring contractors to support improved delivery, or in training to be able to provide future services.
The top 3 pivots taken by 6-figure+ sellers during the pandemic were 1) channels, 2) markets, and 3) spending. Read the full 2020 eCommerce Recession Impact report for more. #ecommerce #BNEcomReport #covid19 #whitepaper Click To Tweet

Here’s what one respondent shared about their unique pivot:

“Being in Thailand, we have started to undertake major changes in our portfolio, to be less reliant on tourism. Even when Thailand is fully open again, we believe tourism will not recover any time soon. We have moved to do more small batch imports, which keeps things exciting and have a faster turnover, but at a lower margin.”

Pro Tip: One thing to keep in mind is to ensure that you are still following all sales tax regulations in order to avoid any tax penalties and fines.

Graham Martin of TaxJar says, “As states continue to report sharply declining sales tax revenue due to COVID-19, we unfortunately expect states to turn their energy toward non-compliant eCommerce businesses. When seeking new sales tax revenue, states generally look toward sectors – like eCommerce – that appear stable enough to pay their sales tax bill should a state find that the business is sales tax noncompliant. Right now, as eCommerce businesses are shoring up risks, is a good time to ensure you don’t have any sales tax compliance surprises – such as new states with “economic nexus” – waiting in the wings.” 

Graham Martin tax jar quote

Another interesting finding that we found was that 23% of the people who pivoted their business didn’t apply for any government funding. 

Amazon Trends 

Admittedly, we didn’t have enough FBA sellers fill out this survey to come to any definitive conclusions.

However, given the small number of sellers who listed Amazon as their primary sales channel and the larger sentiment in eCommerce communities, we think there’s a growing trend of brands trying to diversify away from Amazon. 

In fact, Kiri Masters, of Bobsled Marketing, says, “Many larger brands are now inquiring about growing their sales on Walmart. Walmart has signalled their dedication to grow both customers and suppliers through a raft of initiatives this year: Walmart fulfillment services, ad platform modernization, shopify integration, and aligning store and online buyer teams. While Amazon should be the port of call for most brands due to their continued dominance, Walmart could be an interesting platform to get in on early.”

quote from Kiri Masters

In addition, we’re also seeing more tweets like this one, from Eric Bandholz, founder of Beardbrand, it only confirms our gut instinct that more brands are trying to be less reliant on Amazon. 

Beardbrand founder tweets about Amazon

We expect this trend is likely to continue given the heightened restrictions many brands saw at the peak of the shelter-in-place orders and the usual restrictions and increased competition that come with selling on Amazon. 

So, back to our original hypothesis

We set out to create this report to test our original hypothesis. 

“eCommerce businesses with accounting processes and financial systems in place, like cash forecasting, are better off when going through a recession (than those that don’t have those things in place).” 

It turns out we were partially correct. 

On the one hand, we saw a strong correlation between eCommerce businesses, who continue to grow quarter over quarter in revenue, also regularly use cloud accounting software and do cash flow forecasting. 

In fact, 95% of businesses doing more than $1M in estimated annual revenue used cloud accounting software. 

And, nearly 2/3rd of those businesses also saw their revenue stay the same or increase since the global pandemic and recession started.  

However, we have to be careful not to confuse correlation with causation. 

Just because you use Xero, check your financial reports weekly, use inventory management software, and set up quarterly cash flow forecasts doesn’t mean that your business will grow next month, quarter, or year. 

However, all of these things do help you know your numbers, which will help you make better business decisions. 


Want to improve your cash flow and get more confident with your numbers? Learn how to use Xero effectively for your eCommerce business with our free Xero toolkit. This includes our step-by-step guide to getting your Xero file in order, a Cashflow Forecast Template, and a Bookkeeping timetable template to help you stay on top of your finances & get current reporting. Download now

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Posted By

Wayne Richard

Wayne Richard

Wayne is a management accountant who forged a 15-year career with tech heavyweight Hewlett Packard before starting his own cloud accounting firm in Tucson, Arizona. Fate (and the Internet) brought him to discover Bean Ninjas via a blog post. Two years later and Wayne’s involvement with Bean Ninjas had grown from a blog comment to contractor to equity partner. When Wayne isn’t managing a global team and equipping entrepreneurs with the financial tools they need to enjoy business success and lifestyle freedom, he’s being an everyday superhero to his wife and five children. Wayne is Bean Ninjas resident e-commerce expert.

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