Software Stack Editor

From the everyday essentials you pick up at the grocery store to the latest tech gadgets, every consumer product relies on a complex network known as the supply chain. These goods start as raw materials before they end up transformed or packed inside factories, are shipped worldwide, and are sold to end users, both online and in physical stores.

The logistics behind these processes are often thorny and complex. That’s where supply chain management (SCM) comes in. Supply chain managers can unify an eclectic global mix of suppliers, shippers, and warehousers, all working together to bring desired goods to customers. Learn how intricate supply chains bring products to our stores and doorsteps.

What is supply chain management?

Supply chain management (SCM) is the coordination and management of the sprawling network that delivers a product from suppliers to customers. As materials move through supply chains—starting as raw components and ending up as finished products—supply chain management professionals oversee their journeys.

Supply chain management encompasses the planning and direction of all activities that affect sourcing, procurement, and logistics. Crucially, supply chain professionals must manage supplier relationships. They coordinate with supply chain partners—suppliers, factories, warehouses, distribution centers, intermediaries, and third-party service providers—to keep a steady stream of goods flowing to customers.

Effective supply chain management can improve efficiency, maximize productivity, reduce costs, and ensure the timely delivery of goods and services while maintaining high quality for the end consumer, making supply chain management important to businesses worldwide.

The importance of supply chain management

SCM matters to large conglomerates and boutique companies—like premium canned seafood brand Fishwife. Cofounder and CEO Becca Millstein emphasizes that finding the right supply chain partners can be tricky. “You really have to scrap it together,” she says on the Shopify Masters podcast. “In terms of supply chain, you really have to dive into the internet. You really have to use any possible connection you can to find your manufacturing partner.”

Becca’s supply chain management journey involved building a personal connection to her suppliers. In the case of the seafood industry, she explains, “most co-packers have MOQs, minimum order quantities. So originally, when I was speaking to canneries in Europe, I was hearing, ‘We have a 200,000-unit MOQ.’ For someone that does not have a bunch of cash lying around to buy tens of thousands of cans of fish, that was very intimidating.” 

She tackled her problem by working with smaller suppliers that could grow along with her business. “The way that I ended up hacking around that was working with micro-canneries in the US that had lower MOQs,” she says. “Then we scaled up those canneries by partnering with them and supporting them in purchasing new machinery that we were going to use and that they could use to make their own operations efficient.”

Becca’s hands-on, personal approach to SCM helped her cultivate strong relationships with her suppliers, letting them grow and thrive together.

How does supply chain management work?

1. Planning
2. Sourcing
3. Manufacturing
4. Delivery
5. Returns

Each component of supply chain management plays a role in a retailer’s core business functions because managing inventory is essential in retail. Here are the five main activities that a supply chain manager must oversee:

1. Planning

In the demand planning phase, companies develop a business strategy to balance supply and customer demand. Supply chain managers work with inventory managers to forecast demand, using historical data and market analysis. They also collaborate on inventory management, which determines the optimal levels of inventory to meet demand without overstocking or stockouts.

There’s also production planning, which schedules the production of goods to meet demand forecasts while controlling costs. Meanwhile, capacity planning ensures that the company has the necessary resources, such as equipment, labor, and facilities, to meet production needs. In these processes, companies rely on accurate forecasting.

2. Sourcing

Sourcing involves selecting vendors that provide goods to supply chain networks. Supply chain managers choose suppliers based on criteria such as cost, quality, reliability, and service. Strategic sourcing requires building and maintaining good relationships with suppliers, giving you reliable access to materials and services from within your supply network. The sourcing phase may include contract negotiations to establish terms and conditions for supplying goods and services.

3. Manufacturing

The manufacturing process involves turning raw materials into finished products. This link in the supply chain includes production operations such as assembly, fabrication, and testing. Quality control confirms the goods meet production standards and specifications, maintenance keeps manufacturing equipment in good working order to prevent downtime, and workforce management ascertains that skilled labor is available. These manufacturing processes work in concert to keep goods flowing through the supply chain network, meeting market demand as it ebbs and flows.

4. Delivery

In modern supply chains, delivery starts with order processing, which manages the receipt, processing, and fulfillment of customer orders. It includes warehouse management because many retailers keep a significant stock of goods on hand to quickly meet market demand. There’s also transportation management, which oversees the physical movement of goods from warehouses to customers, including selecting carriers and routes. Finally, distribution management oversees deliveries, ensuring they end up in the right place, at the right time, and in working condition.

5. Returns

Supply chain evolution includes the growing need to manage returns. This is particularly true in ecommerce, where customers often buy goods before they’ve had a chance to hold them in their hands. The National Retail Federation estimates that customers return one out of every seven purchases.

The returns category includes reverse logistics, which manages moving returned products from the customer back to the company. It also includes returns processing, where workers inspect returned products, determine the reason for the return, and decide on the appropriate action, including repair, replacement, recycling, and disposal. There’s also a financial component to this stage, as businesses must issue refunds or credit for returned goods.

Types of supply chain models

Contemporary supply chain solutions can follow several different models, which vary based on the nature of a company’s business processes and supply chain activities. Here are four well-known and effective supply chain models business uses:

Continuous flow model

The continuous flow model is suitable for businesses with stable and predictable demand for their products. With a steady flow of goods and materials throughout the entire process, this method emphasizes efficiency and consistency in the supply chain activities.

This model requires precise inventory management and inventory control mechanisms. Many supply chain managers use enterprise resource planning (ERP) systems to integrate everything from strategic sourcing and inventory planning to distribution center operations.

Continuous flow operations managers may choose to audit their operations with periodic quality testing, including use of emerging technologies like machine learning (ML) for data analysis and demand forecasting. This helps them anticipate market trends and root out problems in advance, so there’s always enough supply for their customer base.

Agile model

The agile model is optimal for companies that operate in unpredictable environments or produce customized products such as high-end electronics or custom furniture. Incorporating this inventory planning model into your supply chain helps ensure a focus on flexibility and responsiveness to specific customer needs and market changes.

In the agile model, supply chain sourcing can cope with global sourcing, in which managers develop strong supplier relationships and open lines of communication. When market demands call for production surges, these relationships can help spur suppliers to spring into action and provide the goods that companies need to keep their customers happy.

Efficient chain model

Here, the focus is on maximizing profit margins in highly competitive industries. Think global sourcing for clothing or consumer electronics. Advanced technology and data analysis play a key role in optimizing every step, from strategic sourcing and supplier relationships to logistics and distribution. As with other models, enterprise resource planning (ERP) systems integrate all the processes involved, ensuring smooth information flow and cost control. 

Although this model excels at competitiveness, it may require a larger upfront investment in technology and skilled labor. For instance, you may need workers with advanced degrees in operations management or supply chain management. You may also need top-of-the line logistics providers to give you a competitive advantage in data analysis and inventory planning.

Fast chain model

The fast chain model prioritizes speed. Supply chain managers use this model for turning raw materials into a final product in as little time as possible and then quickly getting that product to end consumers. This model lets you capitalize on hot trends, bring new products to market faster, and win business for high-demand items.

This approach may utilize just-in-time (JIT) inventory practices, reducing costs by minimizing inventory levels and guaranteeing materials arrive just as you need them in the manufacturing process. Logistics providers and distribution centers must be highly efficient to support rapid delivery times.

There are trade-offs to a fast chain model. Maintaining quality can be challenging. What’s more, the focus on speed sometimes leads to higher costs and greater risk of overproduction if forecasts are inaccurate. On the other side of the coin, if even one supplier goes offline or delivers an inadequate product, it can disrupt the entire supply chain and temporarily shut down operations. For this reason, the fast chain model may not be ideal for companies concerned with risk management.

It shouldn’t come as a surprise that your business’s prices can have a major effect on demand for your products. However, exactly how much impact can depend on various factors. If there are many substitutes for your product, a small change in price can result in a plunge or surge in demand. On the flip side, if you control a significant market share—or make an essential product—consumers might continue buying your goods even if you raise the price.

You can understand this relationship better by measuring how much a change in price changesdemand. This is known as the product’s price elasticity of demand, and it is crucial in helping you determine your business’s pricing strategy.

What is price elasticity?

Price elasticity is how a change in a product’s price changes the supply or demand for that product. A product may be either price elastic (meaning price changes have a major impact on supply or demand) or price inelastic (meaning price changes have minimal effect on supply or demand).

What is price elasticity of demand?

Price elasticity of demand (PED) is the specific measure of how much a change in a product’s price changes the demand. 

For example, a price increase for a life-saving patented medication will have little impact on market demand. Customers with no other options for treatment will pay the higher price, indicating that demand is inelastic.

On the other hand, if the price of canned sparkling water increases, there’s a high chance that consumers will switch to a different brand, choose other beverages, or simply drink still water. Demand for sparkling water would then fall, meaning that it is elastic.

How to calculate price elasticity of demand

You can calculate price elasticity of demand using the following formula:

PED = (percentage change in quantity / percentage change in price) 

If the result is less than one, you know that demand for your product is relatively inelastic. As the price rises and falls, the impact on the quantity demanded is minimal. If the result is one or more, demand for your product is elastic. As price changes, so does demand.

Let’s say you sell subscriptions to business accounting software for $15 per month, and demand hovers around two million users. After raising prices to $18 per month (a 20% increase), you notice that demand falls to 1.9 million users (a 5% decrease). You can determine price elasticity by plugging the numbers into the formula:

PED = 0.05 / 0.2 = 0.25

Because your price elasticity of demand of 0.25 is less than one, your software has relatively inelastic demand.

Types of price elasticity of demand

Demand for any product falls into one of five categories, although the two at either end of the spectrum are theoretical, as you’ll see:

Perfectly elastic

Perfectly elastic demand occurs when price increases—no matter how small—cause demand for the product to drop to zero. Conversely, any price decreases—no matter how small—causes the quantity demanded to surge infinitely. In real life, this never happens, but the concept of perfectly elastic demand serves as an endpoint for the full spectrum of relationships between price and demand.

Relatively elastic

Relatively elastic demand means that a change in price has an outsize impact on demand. This is typical of goods that are easy to live without and goods that have many potential substitutes. For instance, a modest increase in the price of down pillows might cause a disproportionate number of consumers to switch to pillows with polyester or bamboo fill, or to a different brand.

Unit elastic

Demand for a product is unit elastic if the percent change in price results in an equivalent percent change in demand. Let’s say you sell running shoes for $120 and decide to increase your price by 15%. If demand falls by exactly 15%, your running shoes are unit elastic.

Relatively inelastic

Relatively inelastic demand occurs when a price change results in a smaller change in demand; consumer desire for your product might shift, but not to a significant degree. An example of a relatively inelastic product would be gasoline. A price increase might cause some consumers to drive less, but most consumers would likely continue purchasing the same amount of gas, because they still need to drive to work or go grocery shopping.

Perfectly inelastic

Perfectly inelastic demand occurs when demand for a product remains constant, regardless of changes in price. Like perfectly elastic demand, this type only exists in theory, bookending the opposite end of the spectrum. Goods that approach perfectly inelastic would be those that are essential to life and for which there are no substitutes.

Why does price elasticity of demand matter?

Price elasticity of demand can have a significant effect on your business’s pricing strategy. If you operate in an industry where demand for your product is elastic, you’ll have to find the sweet spot that balances price and demand to maximize your bottom line. Finding this balance may take some trial and error. 

For instance, you may discover you can raise your prices without having a major impact on demand, but only up to a point. Once you reach a price where demand for your product starts to dip, you have to assess whether the additional revenue from higher prices outpaces the drop in sales. Eventually, you’ll settle on a comfortable price where any further increase results in lower revenue.

Of course, there are many other factors to consider when setting your price—and if you’re considering the long game, you may not want to start with a price that maximizes profit. In a penetration pricing strategy, you would try to increase demand as much as possible by lowering your prices to undercut the competition. If demand is elastic, considerably more customers will purchase from you in response to the low prices. Once you’ve established market share, you might experiment with raising your prices—and you might find that demand now is relatively inelastic. As consumers become reliant on a specific product, they grow more willing to pay higher prices for it. 

If you run a store on Shopify, you can use a variety of price monitoring tools to gauge price elasticity of demand—and you’ll be able to see clearly whether consumers’ willingness to buy your product is elastic or inelastic.

Reverse elasticity of demand 

The demand curve, which graphs how demand reacts in response to changes in price, can sometimes move in surprising ways. For example, an increase in the price of a staple good like rice might actually lead to an increase in demand. If a family pays more for rice, cutting into the budget for meat, they might end up buying even more rice to ensure they have enough food for the week. Demand would thus be elastic, but in the opposite direction from the one you might expect. In other words, the demand curve will show that the amount consumers seek increases as the price increases. 

In another example, if you sell high-end wine and raise your prices, demand may increase as customers perceive your product as more prestigious and desirable, even though there is no change in the product’s absolute value.

If you ever watched the 1995 film Clueless and dreamed of having Cher’s wardrobe software that let her pick out her daily outfits, take heart. Augmented reality fashion has now made this a reality. The technology provides a way for customers to “try on” products while shopping online.

But that’s only part of what augmented reality can do for fashion brands. Learn more about how it can enhance both the in-store and online shopping experience and why it has the potential to solidify brand loyalty.

What is augmented reality?

Augmented reality (AR) merges computer-generated 3D content with real life. Any electronic device (such as a phone, tablet, or laptop) with a camera can provide this experience via AR software. 

The software analyzes the camera’s video stream to identify and track the position of the user. With this information, it projects 3D virtual content by overlaying digital images onto the physical world. For the user, the rendered image on the screen will seem like a part of their real-world environment.

In the fashion industry, one way brands can employ augmented reality is to project their digital garment on a customer’s real-time image, providing virtual try-ons of clothes, accessories, and shoes. 

A brief history of augmented reality

Augmented reality as a concept dates back to 1968 when Ivan Sutherland, a computer scientist and Harvard professor, created the first head-mounted display. Users who wore the display would see computer-generated graphics. Other AR innovators, like researcher and artist Myron Kruger, blurred the lines between reality and simulation by creating interactive AR art. However, there was no distinction between augmented reality and virtual reality at the time. 

It wasn’t until 1990 that Boeing researcher Tim Caudell coined the term “augmented reality” to differentiate it from the fully immersive experience of virtual reality. In this decade, NASA and the US Air Force Research Lab used AR technology. Today, AR technologies have left the lab and have many uses, from art to gaming to social media platforms. 

How is AR used in the fashion industry?

The fashion industry has embraced AR in the following ways: 

Virtual try-on

Online stores are using AR to facilitate virtual try-ons, recreating the experience of shopping in a brick-and-mortar store. Unlike the in-store experience, virtual fitting rooms allow customers to try on clothes whenever they want, even outside business hours. 

While product photos, descriptions, and customer reviews can help customers make more informed purchasing decisions, a virtual fitting room lets them envision themselves in the clothing item more clearly, adding an extra dimension to the customer experience.

Fashion shows

AR solutions have made fashion shows more accessible. What was once only for those working in the fashion industry is now available to a global audience. 

With AR fashion shows, models walk in front of green screens before they hit the runway. AR software then streams the footage to give online audiences a 360-degree, front-row view of the event—no matter where they are.

Runway collections

As fashion brands turn their runway collections into digital content, fashion enthusiasts can interact with the virtual garments before they are available for purchase and see what they look like on their bodies. This can give customers a way to connect to luxury brands that are hard to access. 

Brand narrative

AR tools let fashion brands tell their stories in new ways, which can help them establish a connection with existing and new customers and deepen customer loyalty through memorable experiences. 

For example, luxury brand Cartier partnered with Snap to use AR technology to immerse consumers in 1917, the year it launched its Tank watch line. The campaign walked viewers through significant moments in the company’s history, showcasing the evolution of the product throughout the century. The watch sat at the bottom of the screen, updating with each time jump. When users reached the present day, they could virtually try on the new Tank Française model.

AR mirrors

AR mirrors, or smart mirrors, impose images of a chosen product onto the onlooker’s reflection. Virtual clothing can be an alternative for in-person shoppers who don’t like using dressing rooms or who want to try on multiple items without changing repeatedly. Not only do AR mirrors provide an immersive experience, butthey can also recommend clothing based on body type and preferences.

An example of AR in the fashion industry

Global brand Rebecca Minkoff is a fashion house specializing in handbags, accessories, and clothing that has welcomed technology, including augmented reality. “When people have the intent to shop without physically being able to touch and see a product, the more options you can give them to create that confidence is helpful,” says Sarah Sheldon, Rebecca Minkoff’s senior director of global ecommerce and digital, in an interview on the Shopify Masters podcast.

The brand uses 3D modeling and AR to portray the most realistic image of its products so that shoppers can get a better look at the textures and shapes of a garment, so they feel confident they understand the product’s physical attributes before they make a purchase. 

For the brand, integrating AR has been successful; those who used its 3D modeling tools were 44% more likely to place an item in their shopping cart in comparison to shoppers who didn’t. Additionally, those who used augmented reality to visualize a product in their physical environment had a 65% chance of purchasing the product. 

“We’re always looking for exciting ways to connect and inspire shoppers with our new designs,” says Uri Minkoff, cofounder and CEO of the brand. “Now with video on our Shopify Plus ecommerce store, Rebecca Minkoff shoppers will see our collections brought to life.”

No country specializes in everything. That’s where international trade comes in. For example, Portugal produces world-class port wine. France, meanwhile, exports champagne. Thanks to international sales, you can drink champagne in Portugal and port wine in France. 

Wine sales are hardly the only example of import and export business transactions, however. From food and drink to heavy machinery, businesses have found success in importing and exporting goods all over the world. If you’re looking to gain a foothold in international business and have a knack for logistics and deal-making, an import-export business may be for you.

What are import-export businesses?

Import-export businesses are companies that specialize in buying goods from one country (importing) to sell domestically, or in selling domestic products abroad (exporting). They operate in international markets by navigating logistics, import and export regulations, customs procedures, and market demands.

The import-export business model is all about connecting customers to the foreign goods they want to buy, regardless of where they live. When products find their right markets, importing and exporting can be a highly profitable business.

22 import-export business ideas

An importing and exporting business requires excellent logistical skills, but it also requires a solid business idea that can scale to the global market. Here are some export-import business ideas that may inspire a business of your own.

1. Specialty teas: Import teas from countries like China, India, and Japan, and export to regions with a robust tea culture like Canada and the UK.

2. Textiles and fabrics: Import high-quality textiles from countries like India, China, and Turkey, and export to fashion markets in Europe and North America.

3. Wines and spirits: Import fine wines from regions such as France, Italy, and Australia, and export domestic libations to countries with developing wine markets.

4. Coffee beans: Import premium coffee beans from Colombia, Brazil, and Ethiopia, and export to international customers in coffee-loving countries like Italy.

5. Automotive parts: Import and export automotive parts and accessories among the US, Mexico, and Canada, where trade agreements enable and encourage such automotive industry exchanges.

6. Handicrafts: Import traditional handicrafts from regions like South Asia and Africa, and export locally made handicrafts and art to online boutique platforms with an international customer base.

7. Organic foods: Export organic produce and food products from countries with established organic farming practices to health-conscious markets.

8. Electronics and gadgets: Import consumer electronics from manufacturing hubs like China and export to other countries with high demand for tech products.

9. Furniture and home décor: Import furniture from mass producers in Mexico and Vietnam, and export US products from furniture-making hubs such as High Point, North Carolina.

10. Spices and herbs: Import small-batch spice blends from countries like India and export them to gourmet food markets and restaurants. 

11. Fashion accessories: Import trendy fashion accessories from fashion-forward countries such as Italy and France, and export local fashion accessories to customers in foreign countries.

12. Health and beauty products: Export natural and organic beauty products using online marketplaces.

13. Jewelry and gemstones: Import precious and semi-precious gemstones from regions like Africa and South America and export handmade jewelry to international buyers.

14. Pet supplies: Export bespoke, domestically made pet products to countries with a burgeoning pet culture.

15. Sports equipment: Import and export sports gear and equipment from countries known for quality manufacturing.

16. Art and antiques: Import and export unique art pieces and antiques to and from the world’s art markets.

17. Toys and games: Every country has children, so selling toys and games may be one of the best import-export business concepts in terms of a reliable customer base. Import innovative and educational toys from reliable supply chains throughout the global market.

18. Pharmaceuticals: Import generic and specialty medications from countries with established pharmaceutical industries and export to markets in need. Note that US pharmaceutical trade regulations often are particularly restrictive, but this can be a profitable venture for those who can break through.

19. Chemicals:Chemical exports make up a large part of the international market. As with pharmaceuticals, the chemical export-import field isn’t easy to break into, but if you can manage to operate on a global scale, you can create a highly profitable business.

20. Renewable energy solutions: Import solar panels, wind turbines, and other renewable energy products from manufacturing hubs and export to markets that value and invest in sustainability.

21. Footwear: Import high-quality or unique footwear from renowned manufacturing countries and export to fashion-conscious countries with high market demand.

22. Software: Developing software and selling it in a foreign market can be a relatively manageable import-export business idea because you can sell digital products without wading into onerous international trading requirements such as drafting export declarations and obtaining an export license.

How to choose the right import-export business idea

1. Conduct thorough market research
2. Identify your target market
3. Evaluate local manufacturers and suppliers
4. Develop a business plan focused on global trade
5. Understand local regulatory standards
6. Leverage export directories and networks
7. Assess financial viability and risks

Starting an import-export business can be a rewarding venture, but it requires careful planning and consideration. Here are seven steps to help you choose the right import-export business idea:

1. Conduct thorough market research

Researching markets is crucial to identify profitable export business ideas. Analyze consumer preferences, demand trends, and competition in both your home country and target countries. Use valuable resources such as trade databases, industry reports, and export directory providers to gather insights. Determine which products are in high demand. 

For instance, consumer electronics may be highly sought after in one country, while fashion accessories are more desirable in another.

2. Identify your target market

Define your target markets, considering factors like economic stability, import regulations, and the purchasing power of overseas buyers. Study the local market to determine which products are not readily available and could fill a gap. Tailor your marketing strategy to appeal to specific demographics within these target markets, ensuring that your product aligns with consumer preferences.

3. Evaluate local manufacturers and suppliers

Establish strong relationships with reliable, local wholesale suppliers who can provide products consistently and reliably. When interviewing each local manufacturer, assess their capacity to meet export demand and their compliance with international standards. 

4. Develop a business plan focused on global trade

Create a comprehensive business plan that outlines your business skills, marketing strategy, and organizational structure. Include details on how you will finance your operations, whether with your own money or external funding. Plan how you will organize logistics, including shipping, warehousing, and working with a customs broker to navigate import-export regulations in a foreign market.

5. Understand local regulatory standards

Familiarize yourself with the regulations for the different countries you hope to do business with. Ensure compliance with customs requirements, tariffs, and trade agreements to avoid legal issues and delays. Working with a knowledgeable customs broker can help streamline this process and provide valuable knowledge on navigating international trade laws.

6. Leverage export directories and networks

Use an export directory provider to find potential overseas buyers and establish initial contacts in other countries. Participate in global trade shows and online marketplaces to expand your network and gain exposure.

7. Assess financial viability and risks

Evaluate the financial aspects of importing and exporting products. This includes costs of production, shipping, tariffs, and the marketing of a particular product. Conduct a risk assessment to identify potential challenges, such as political instability or currency fluctuations in target markets. Ensure you have contingency plans in place to mitigate these risks and protect your investment.

Cash flow is the core of any business—money is what keeps your company alive. 

Your business’s free cash flows are an indicator of its financial health. They show how much money your company has to pay its balances and potentially invest back into growth.

Free cash flow yield takes that one step further and shows how much cash flow can be paid to a company’s investors per share that they own.

What is free cash flow? 

Free cash flow (FCF) is the money a company has left over to repay its debts, pay out dividends to stakeholders, reinvest in itself, or save once it’s paid off all of its expenses. Free cash flow is a subset of cash flow, a broader term used to describe the money entering and leaving a company’s bank accounts.

FCF is reported on the balance sheet, a record of the funds flowing in and out of your company over a given period.

How to calculate free cash flow

To calculate your business’s FCF, take the total cash generated from your operations and subtract your capital expenditures (i.e., investments in long-term assets, like property, equipment, or patents).

Free cash flow formula

The basic free cash flow formula looks like this:

Free cash flow = cash from business operations – capital expenditures

A positive free cash flow means that a company generates cash, which, if high enough, could be reinvested in new products, marketing initiatives, or employees. It can also mean the company is in good financial shape and can afford to pay dividends to shareholders.

A negative FCF may indicate a company is struggling financially and may not have enough cash to invest in new products or employees. It may also show the company isn’t generating enough revenue to cover its capital expenses.

A negative FCF ratio could be a sign of trouble and may warrant further investigation by its owners.

Free cash flow example 

Let’s say you’re a freelance social media marketer and need to calculate your free cash flow to see if it’s financially feasible to hire an assistant for 20 hours a month.

Your financials for the year look like this:

• Net income: $50,000
• Depreciation/amortization: $0
• Change in working capital: -$35,000
• Capital expenditure: $7,500

Your free cash flow will be: $50,000 + $0 – (-$35,000) – ($7,500) = $57,500.

This means you have $57,500 in available cash at your disposal, which you can use to hire an assistant. Or, you can reinvest the funds back into your business by buying a new laptop or marketing your services online.

The importance of free cash flow

Free cash flow is a valuable metric for businesses of all sizes, as it shows how much money a company has to draw on. Several players review this metric for different reasons:

• Business owner. To understand their company’s ability to generate cash, so they can manage their cash flow efficiently, improve business operations, and make strategic investment decisions on profitable ventures. 
• Investors. To assess a company’s performance and whether it can raise new funds, pay out dividends to its shareholders, and pay back debts, so they can make informed investment choices. 
• Lenders and creditors. To determine a company’s legitimacy and analyze its creditworthiness and ability to meet financial obligations.
• Analysts. To estimate a company’s intrinsic value and determine whether its share market price is undervalued or overvalued. 

You’ll know whether a company has sufficient money to reinvest or pay out shareholders depending on its free cash flow yield ratio.

What is free cash flow yield?

Free cash flow yield describes how much free cash flow is available in relation to a company’s market capitalization—that is, relative to the company’s stock market value. Free cash flow yield is used to calculate how much money is paid out to stakeholders through interest and dividends.

Here is the free cash flow yield ratio formula:

Free Cash Flow Yield = Free Cash Flow Per Share / Market Price Per Share

Free cash flow yield is important because it shows how much money a company has available to pay dividends to shareholders.

Levered cash flow yield

A levered free cash flow yield is the amount of money your business has after it’s paid off all of its expenses and obligations.

Levered FCF yield is vital because it not only points to your company’s financial health but is also used to calculate how much funds are available to pay out to equity investors.

The formula for calculating levered free cash flow yield includes earnings before interest, taxes, depreciation, and amortization (EBITDA), as well as capital expenditures (CAPEX)—the money your company uses to buy fixed assets—and change in net working capital. The formula is:

Levered Free Cash Flow Yield = EBITDA − Net Working Capital − CAPEX − Mandatory Debt Payments

Unlevered cash flow yield

An unlevered free cash flow yield is the amount of money your business has before it’s paid off all of its financial obligations. A high unlevered FCF yield means a company has a lot of cash available to reinvest in its business or distribute to equity holders.

The formula for unlevered FCF yield includes earnings before interest, taxes, depreciation, and amortization (EBITDA), as well as capital expenditures (CAPEX). The formula is:

Unlevered Free Cash Flow Yield = EBITDA − CAPEX − Working Capital − Taxes

Levered free cash flow yields are typically higher than unlevered ones because they consider the impact of debt on a company’s finances. When a company carries large debts, its levered free cash flow is lower than its unlevered free cash flow because interest payments on the debt reduce the amount of money available for other purposes.

Free cash flow vs other financial statements

Free cash flow is a powerful metric financial analysis, but how does it compare to other financial statements? Here’s an overview of the key differences.

Free cash flow vs operating cash flow

Free cash flow is money left after accounting for capital expenditures or outflows. It represents cash that you can invest back into the business, repay creditors, or distribute to shareholders. Operating cash flow is the money a business generates from its primary revenue-producing operations. It’s more about a company’s liquidity and tells whether your business has enough cash to operate without needing outside financing.

Free cash flow vs working capital

Free cash flow is the money left over paying the costs of running a business, like rent, payroll, taxes, and inventory costs. You can reinvest these funds into the business or use them to pay down debt or pay dividends to shareholders and owners. 

Working capital is the money you have left over to meet day-to-day and short-term obligations after accounting for current liabilities. It measures your company’s liquidity and short-term financial health.

Free cash flow vs EBITDA

Free cash flow is the money a business has left over after paying capital expenditures, such as payroll, equipment, inventory, rent, and taxes. The business is free to use these funds as it sees fit. EBITDA represents the money a business earns before accounting for essential and certain capital expenses. It provides a clear understanding of a company’s financial performance and profitability based purely on the strength of its core operations.

Free cash flow vs profit 

Free cash flow (FCF) is the amount of money a business has left after accounting for operating expenses and capital expenditures. It measures a company’s profitability but is not equivalent to overall net income. Profit is what remains from a company’s revenues after deducting costs, and shows the immediate success or overall financial performance of a business.

Earn more free cash flow for your business

Free cash flow gives business owners and stakeholders, like investors, lenders, and analysts a picture of the money a company has available to spend at a given time, its performance, and its ability to stay in business.

Knowing how to calculate your company’s free cash flow and regularly monitoring and tracking it can help you position your business for the future, reduce debt, and make wise investment choices that drive growth.

Building a sales or marketing funnel from scratch can require considerable trial and error. You have to identify where your audience spends their time, what sources of information they value, and how to grab their attention. 

What if there was an easier way? Well, there is: Funnel hacking allows you to skip the guesswork and use the strategies that have worked for your competitors. Careful study can help you build an effective funnel from top to bottom. Here’s how.

What is a marketing funnel?

A marketing funnel is a model of the process a potential customer moves through as they become aware of your product and eventually decide to purchase it. Typically illustrated as an inverted pyramid, it shows customers moving through three stages: awareness, consideration, and conversion. 

In the awareness stage, you market to a broad audience to generate leads. In the consideration stage, you market to an audience familiar with your brand. And in the conversion stage, you market specifically to the leads most likely to convert.

What is funnel hacking?

Funnel hacking is the process of building a marketing funnel or sales funnel by studying your direct competitors’ marketing strategies, and then applying the insights you gain to your own business. 

The funnel hacking process involves looking at how competitors engage with their audiences at each stage. Once you identify the key elements that make your competitors’ funnels work (from their digital ads to their content marketing and price tiers), you can adapt those elements for yourself.

What are the benefits of funnel hacking?

No matter how experienced you are in the realm of digital marketing, funnel hacking can help you succeed in a few ways:

It provides a practical rubric

Sure, you could start with a standard sales or marketing funnel template, but looking at a real-world, tried-and-true model is less likely to leave you suffering from blank-page syndrome. 

Whether or not you use the same techniques as your competitors, having concrete examples of how they engage with their audience at each stage of the funnel can spur your creative thinking as you devise your sales and marketing process. At the very least, you’ll be able to see what type of marketing techniques they use to guide you as you make decisions.

It helps you differentiate your product

When you funnel hack, you don’t simply copy-paste your competitors’ marketing funnel and call it a day. Your product stands apart from the other offerings on the market—something you need to communicate to potential customers. 

Funnel hacking can help you refine your value proposition by highlighting the areas where your competitors’ marketing tactics are not ideal for your product. Use the tactics that serve your product and discard the rest.

It helps you increase ROI

By implementing your competitors’ most successful marketing strategies, you might generate more return on investment (ROI). 

As a funnel hacker, your goal is to eliminate waste—money wasted on poorly targeted ads, unappealing product features, and marketing copy that doesn’t land with your audience. By researching what works for your competitors, you can spend your time and resources on proven tactics that appeal to your audience and prompt them to click that Buy button.

How to use funnel hacking

1. Identify your competitors
2. Study your competitors’ positioning
3. Study your competitors’ traffic sources
4. Sign up for your competitors’ marketing emails
5. Reverse-engineer your competitors’ marketing funnels

Funnel hacking is a relatively straightforward and intuitive process—it can even be fun. Here’s how to use it to build your marketing funnel:

1. Identify your competitors

Create a list of all of the companies selling products similar to yours (if you haven’t already, it might be worth conducting a full competitive analysis). Include both direct competitors (which sell products similar to yours to a similar audience) and indirect competitors (which sell higher- or lower-end versions of your products to a different audience). 

Studying how direct competitors market their products is more likely to yield marketing strategies you can directly apply, but you can still gain insight from how your indirect competitors position their products to a slightly different audience.

2. Study your competitors’ positioning

This is where the real sleuthing begins. Survey your competitors’ websites, ads, and social media accounts to understand how they reach their audience—particularly at the top of the funnel. To start, you can use the Meta Ad Library to search for competitors and see if they’re running Facebook ads or Instagram ads. You can also browse the brands’ social media pages to see what kind of content they publish and how their audience engages with it. Take screenshots as you go, and record your observations for reference later.

3. Study your competitors’ traffic sources

Various tools can help you see where your competitors’ traffic comes from. Semrush and SimilarWeb, for example, provide traffic analysis tools that let you see your competitors’ traffic sources—whether that’s organic search, referral sites, social media, ads, or something else.

Additionally, Ghostery and the BuiltWith Technology Profiler are plug-ins you can use to see what type of tools your competitors use to identify their traffic sources. For example, if you find a competitor uses Meta pixel, you know they’re aiming to drive traffic via Facebook and Instagram. You may also learn what email provider, loyalty platform, and personalization apps they use. 

4. Sign up for your competitors’ marketing emails

By subscribing to your competitors’ newsletters and marketing emails, you can see how they target those who are already familiar with their brand or have made purchases before. 

For a couple of weeks, assess the emails to see how they fit into a larger strategy. Do your competitors offer promo codes? Upsells? Are the emails individualized in any way? Go to your competitor’s site and leave some items in your cart to see if you get an abandoned cart email. Record your findings and highlight the aspects of the email marketing strategies you like.

5. Reverse-engineer your competitors’ marketing funnels

Once you’ve gathered as much information as possible, sketch out your top competitors’ marketing funnels. Break down the different types of marketing techniques they use to target potential customers at each stage of the funnel, then highlight the details you like that apply to your brand. 

Instead of copying successful funnels entirely, look for the most effective techniques and adapt them. If a competitor is gaining traction on Instagram with clever and irreverent posts, you might consider revisiting your brand voice guidelines to incorporate a sense of humor. If you notice a competitor makes persuasive offers in their abandoned cart emails, you could do something similar.

Once you’ve rolled out your marketing funnel, test, iterate, and refine until it’s firing on all cylinders. 

It’s normal to see your profits fluctuate throughout the year. One of the biggest seasonal demand spikes comes during the holiday gifting season; in 2022, Shopify sites saw a 17.5% increase in shoppers in November, with a whopping $7.5 billion in sales over the Black Friday/Cyber Monday weekend alone. Weather drives other trends—swimwear sales rise with warmer weather, while snow shovels sell rapidly after the first snowfall.

When a business does most of its sales during one season, it’s a seasonal business. These businesses thrive during huge demand periods and then go dormant during the off-season to cut costs. Seasonal businesses are perfect if you have extra time during certain months or want to earn extra cash without a year-round commitment. Here are some seasonal business ideas to get you started.

Top seasonal business ideas

You typically need a business license to offer commercial services, so plan to register as a legal entity to set up your business. Here are 16 ideas to start your own business around a seasonal trend:

Farmers market booth

Selling at a weekly farmers market, where you sell products to hungry crowds, is a classic summer business idea. Beyond produce, you can offer handcrafted items, art, and baked goods as well.

While most booths are not free—they can cost between $20 per day to several hundred dollars per season—farmers markets do most of the marketing for you and typically draw a large crowd of locals and tourists.

Firewood sales

Looking for a winter business idea that keeps you warm during the cold months? Try selling firewood. Start small by collecting and chopping old trunks and stumps from friends and neighbors.

Remember, you can’t sell the wood right away unless you want to sell it cheaply as “green wood.” The best firewood is seasoned, or left to dry out, for at least six months for softwood (like cedar or spruce) or a year for hardwood (like oak or birch).

Once your wood is seasoned, sell the wood in bundles. If you have a pickup truck, offer local delivery for an extra fee.

Food truck or booth

Mobile or pop-up food and beverage sales offer a great seasonal business idea, especially if you’re already in the restaurant industry. While startup costs can be significant—from ingredients to staff to the truck or booth—food trucks can bring significant revenue in a short span of time. You can advertise at events, farmers markets, or high-traffic areas.

Food trucks and booths aren’t just a summer thing: in the colder months, ask local skating rinks or ski resorts if you can set up a hot beverage stand on their property. Look into setting up your booth or truck at local events during various holiday seasons.

Holiday decorator

Many people love the holiday season but prefer outsourcing some of the work, meaning there are plenty of winter business ideas you can try to make extra cash. Try gift wrapping, holiday light installation, or themed decorating for homes and commercial businesses. If you’re crafty, try custom ornament sales, holiday baking and decorating, or costume sewing.

House care

If you’re handy or have experience in home maintenance, start a home service business. In the summer, offer specialized services like painting, roofing, or window cleaning, and focus on weatherproofing in the fall and winter. You can also start a fencing business or an indoor cleaning business. Begin solo to minimize startup costs, and hire seasonal help as your business grows.

Lawn care and landscaping

If you’re looking for summer business ideas during the growing season, start a landscaping business to design and maintain green spaces for homes and businesses. Essential tools include a lawnmower and a way to transport it, equipment like pruning shears, a string trimmer, fertilizers, and pest control solutions. Offer package deals for the entire summer to secure steady weekly work. 

Outdoor equipment rental

If you live in an area with great access to outdoor activities, consider starting a rental service for equipment like kayaks and paddleboards. If you live in a mixed climate, you might run a bike rental business in the summer and rent snowshoes and snowmobiles in the winter.

Conduct market research to identify high-demand activities or untapped niches.

Outdoors guide

If you have hiking and camping experience and enjoy being outdoors, become a camping guide to help seasonal visitors make the most of their trips to your area. While summer camping is popular, winter-season camping offers snowshoeing, ice fishing, and more. You can also sign up to be a local camp counselor for a simple seasonal job. 

Pet sitting

When pet owners go out of town for summer break or winter holidays, they need reliable care for their animals. Offer in-home visits to feed cats and walk dogs, or turn your house into an all-inclusive pet hotel for drop-offs. With dedication, you can turn your seasonal pet-sitting gig into a full-time job.

Plant sales

A great business idea leverages your skills. So, if you have a green thumb, why not sell plants? Sell cut flowers, vegetable starts, and herbs in spring and summer; in the winter months, run a Christmas tree farm or sell evergreen wreaths, depending on market demand. 

Pool cleaning business

Pools require a lot of cleaning and fine-tuning—filling, skimming, vacuuming, scrubbing, balancing chemicals—which many homeowners prefer to outsource to a professional. Start a pool maintenance business to help set up pools for summer, keep them swim-ready through the warm-weather months, and overwinter them when the weather starts to cool.

Seasonal sport instructor

If you excel in a seasonal sport—like swimming and surfing in the summer, or skiing and ice skating in the winter—offer your skills as a seasonal instructor to kids or beginners.

Start by reaching out to local venues—pools, beach clubs, ski resorts, or skating rinks—to see if they have open positions. With a strong health and fitness background, you can also offer personal training or one-on-one coaching.

Snow removal services

If you live in an area with heavy snowfall, start a snow removal business to clear driveways, sidewalks, and steps. Many homeowners and local businesses pay a pretty penny for this service.

Be prepared for a significant initial investment in equipment (like a small tractor or plow attachment for a truck) if you plan on plowing large areas, and expect to work irregular hours to keep up with the weather.

Tax preparation services

In the US, taxes are due every year on April 15. Many individuals and business owners need help preparing and filing their taxes during tax season, so you can offer your skills with tax software as a seasonal consultant.

To get started, apply for a preparer tax identification number (PTIN) through the IRS. You can also participate in the IRS’s Annual Filing Season Program to enhance your resume.

Tour guide

If you live in a tourist hotspot, start a business as a tour guide. Offering walking tours is a great low-cost business idea, since all you really need is solid local knowledge and an effective marketing strategy.

For a more upscale experience, offer bike or bus tours. For a unique business idea, tailor your tour to a niche target audience like coffee enthusiasts or ghost hunters.

Upcycling

As warm weather arrives, garage sales and flea markets thrive. Hunt for bargains, then clean, repair, and update the items to resell at a profit. Specialize in a niche—like wood furniture or vintage sweaters—to hone your expertise and market your business offerings to a narrower target market. You can resell your upcycled items locally or through your own ecommerce store.

According to a report by the National Education Association, teachers in the United States make 5% less on average than they did 10 years ago when you adjust for inflation. Today, the average starting teacher salary sits at $44,530 per year.

In this landscape, teachers are exploring side hustles to earn money on top of a standard teaching salary. With entrepreneurship on the rise and one report projecting there will be more than 86 million freelancers in the US by 2027, side hustles have never been more popular. Learn more about the best side hustles teachers can pursue to make extra money.

Side hustles for teachers

Here are some side hustles for teachers that can provide extra income outside of a primary job:

Sell lesson plans

If you’ve developed educational materials during your time spent teaching, consider making more money from those materials outside of your teaching job.

Teachers can sell lesson plans, presentations, worksheets, flashcards, and other original educational materials to other teachers through online platforms like Sellfy, Classful, and Teachers Pay Teachers. These educational materials can range in price depending on the size, topic, and quality of the materials.

Create online courses

You can also channel your teaching skills into online classes for paying customers looking to develop new skills. For example, a math teacher could produce a video course about statistics, or a history teacher could develop an online course in the form of a podcast exploring a specific time period in history. Teachers can set their own rates and sell their work on platforms like Thinkific, Udemy, and Teachable.

Offer tutoring services

Another way for teachers to make money outside of their standard teaching positions is to offer private tutoring services to paying clients. Pay varies widely for tutors based on what they’re teaching and where, but tutoring rates can typically range anywhere from $15 to $80 an hour.

For example, you could teach English to adult clients who primarily speak a foreign language or help high school students prepare for standardized tests like the SAT. Tutors can work with local clients in person or find potential clients online through platforms like Wyzant, Preply, and Tutorly.

Administer tests

Teachers can pick up a second job overseeing standardized tests at schools in their area to earn additional income. Test proctors manage and supervise tests like the ACT or SAT, final course exams, and even licensing tests for a variety of industries like construction, real estate, architecture, engineering, and law. Test proctors make roughly $15 to $20 an hour, depending on the type of test and their location.

Become a freelance writer

You can apply the writing skills you’ve developed as a teacher to freelance writing. Copywriters can create a variety of written materials for individuals and businesses, including blogs, website copy, advertisements, newsletters, and technical manuals.

Freelance writers can earn anywhere from a few hundred dollars a month to more than six figures per year, depending on the number of assignments and quality of clients. Freelance writers can use platforms like Upwork or Fiverr to connect with clients and build their writing portfolios.

Work for a summer camp

If you love the outdoors, consider making some extra cash during school breaks by working as a summer camp counselor. Camp counselors organize and lead outdoor activities and supervise campers to make sure they’re safe and enjoying their experience. Teachers can lend their skills at day or overnight camps to earn extra money while school is out.

Teach summer school

Similarly, you may consider working as a summer school teacher to earn more outside of the traditional school year. Summer school teaching salaries depend on the specific subject, age range, and school district. Teachers can apply for part-time or full-time positions at local private and public schools, online teaching programs, and colleges or universities looking for adjunct professors during the summer.

Run after-school programs

If you have time after the school day ends, you can research what after-school programs are available in your school district. Consider applying for a part-time job helping sports teams, coding programs, or videography or drama classes.

For example, a high school teacher could pick up a side job as a coach for a soccer team at the same school where they work. Having an existing connection with the school or district may make it easier for them to find openings and build connections with hiring managers, who may already be familiar with their work. The pay for helping with after-school programs varies widely based on the particular school district and program.

Become a virtual assistant

Teachers wear many hats, and their organizational and multitasking skills can make them well suited to being a virtual assistant. Virtual assistants help clients with tasks ranging from scheduling and email management to data entry and general administration.

There is a huge market for virtual assistants, and teachers can access a range of potential clients through platforms like Fancy Hands, Zirtual, and Indeed. A virtual assistant position can be a flexible part-time job to supplement a teaching salary; the average pay is roughly $25 an hour.

Write a book

If you have unique insights about a subject and are looking for a creative outlet, you may want to consider writing a book. Teachers often have specialized knowledge in a particular field, which can make their books—whether academic or literary—informative. For example, a physical education teacher could use their unique skills and perspective to write a book about fitness and health.

You may then decide to go the route of traditional publishing or choose self-publishing an ebook. Although making money from an ebook takes time and marketing effort, it can bring in extra income from sales through a platform like Amazon Kindle Direct Publishing.

Pick up odd jobs

If you want to generate a little extra cash while choosing your own hours, explore platforms like Taskrabbit, Handy, and Thumbtack. Clients post odd jobs on these platforms that range from pet sitting and dog walking to house cleaning and furniture assembly. As a teacher, you can pick up odd jobs at your own pace to make money outside of your primary job, with rates varying depending on the specific job.

You can also choose to work for a delivery or rideshare service, which allows workers to make their own schedule. Other side hustles may include renting out extra space, earning money through affiliate marketing programs, or even using an online platform like Shopify to launch an ecommerce store.

Navigating the internet is like exploring a vast, vibrant city, where each website represents a unique neighborhood with its distinct atmosphere, culture, and purpose.

When browsing an ecommerce site, you’ll find a variety of products, descriptions, and reviews to help you make an informed purchase; a travel blog treats you to captivating stories, stunning photos, and insider tips; and social media offers an endless stream of updates, photos, and videos from friends, family, and strangers.

Despite the diversity of websites, they all share commonalities that bind them together. Here’s a deep dive into these essential components and the various types of sites you can create for yourself or your business.

What is a website?

A website is a collection of several web pages and related content that exist under a common domain name (ex. shopify.com). They can include multimedia elements like text, images, and videos, ecommerce functionalities like shopping carts and payment gateways, and interactive features like forms, polls, and chatbots.

Websites are accessed through a web browser, a software to access and view web pages, with a unique uniform resource locator (URL), a web address directing to a specific resource. Websites can serve various purposes, from providing information and entertainment to enabling communication and facilitating online transactions.

How do websites work?

Websites work by storing their content on web servers, or computers that host website files and make them available to users across the internet.

When a user enters a website’s URL into their web browser or clicks on a link to the site, the browser sends a request to the web server hosting the site’s files. The server responds by processing the request, retrieving the necessary files, and sending the requested assets back to the user’s browser, which renders these files into web pages, allowing users to interact with the content.

Website vs. web page vs. web server

A website is made up of multiple web pages, and these web pages are stored on and delivered by a web server. Here’s what each of those terms mean:

Website

A website is a collection of web pages linked together via a common domain name and stored within a web server. The purpose of a website is to provide an easily navigable place for users to explore related content like individual product pages within an online store or articles on a news site.

Web page

A web page is a single document within a website, on the web, that contains text, images, or other multimedia elements. It’s typically written in HyperText Markup Language (HTML) and can be accessed by entering its unique URL into a web browser (like Google Chrome, Firefox, or Safari).

They are the building blocks of a website, and each single web page serves a specific purpose. For example, an ecommerce website may have multiple individual web pages for each of its products, an About Us page detailing the brand and its mission, an FAQ page, a blog, and a contact form.

Web server

A web server is a computer system that hosts website files and makes them accessible to users over the internet. It stores all of a website’s components, including web pages, images, videos, and databases. When a user requests a specific web page by entering its URL into a browser or clicking on a link, the web server processes the request and delivers the appropriate content to the user’s device.

Components of websites

Whether you’re building an online portfolio that serves as a digital business card or a personal blog to publish articles, websites share many of the same fundamental components. Here are the essential elements that make up a website:

• Homepage. The main page that serves as the starting point for visitors, a homepage provides an overview of the website’s purpose and guides users to other relevant pages.

• Web pages. These are the individual documents that make up a website; all the web pages are typically linked together through a navigation structure to create a cohesive browsing experience.

• Web address. A web address, also known as a URL, is a website page’s unique identifier on the Internet. Users can access specific pages by entering a URL into their web browser or by following a link from a search result on a web service like Bing or Google.

• Domain name. A domain name is the human-readable part of a web address that identifies a website, such as “shopify.com.”

• Domain extension. A domain extension, also called a top-level domain (TLD), is the suffix at the end of a domain name, such as “.com,” “.org,” or “.net.” Domain extensions can indicate the website’s purpose, region, or type of organization.

• Web host. A web host is a service that stores website files on servers, making them accessible to users online.

• Navigation. Navigation features help users get from one page to another on a website, and they can look like a navigation bar, drop-down menu, or breadcrumbs that connect and organize different pages.

• Content. Content refers to all the information, text, images, videos, and other media presented on a website.

Static vs. dynamic websites

Static websites display the same content for every user, regardless of their interactions or preferences. Each page of a static website is a separate HTML file and remains unchanged unless manually modified by the website owner or developer. Examples of static websites include personal websites and blogs, or informational websites that don’t offer ecommerce functionalities or require frequent updates.

On the other hand, dynamic sites display content that can change based on user interactions, preferences, or sources. A dynamic website relies on server-side scripting languages like PHP, Python, or Ruby to generate content on the fly, pulling information from databases or external application programming interfaces (APIs).

An example of a dynamic website is an ecommerce website where product prices and availability are updated in real time based on user actions and stock levels.

Types of websites

Here are some of the most popular types of websites:

News

A news website covers current events, politics, entertainment, sports, and other topics of interest. Major news outlets like BBC, NPR, CNN, and Fox News all have large websites (and often mobile apps as well). News sites are often regularly updated throughout the day to keep readers informed. While many news websites are freely accessible, some content and articles may be hidden behind a paywall that requires readers to pay for a monthly or annual subscription.

Social networking

LinkedIn, Facebook, Instagram, and TikTok are all examples of social networking sites that allow users to share content and communicate with friends, family, colleagues, and users with similar interests. While these platforms are accessible through web browsers, many users primarily interact with social networks through dedicated mobile phone applications for convenience and added features.

Ecommerce

Ecommerce websites, hosted on platforms like Shopify or BigCommerce, allow businesses to sell products or services online. They provide features such as secure payment gateways, product catalogs, and shopping carts. Customers can browse, purchase, and receive goods or services without visiting a brick-and-mortar store, making shopping more convenient and accessible.

Blog

Blogs are websites or sections of websites where individuals or organizations post content on various topics such as film reviews, recipes, fitness tips, or personal experiences. While many blogs are standalone personal sites, businesses also incorporate blogs into their websites to share industry insights, engage with customers, and establish thought leadership in their respective fields.

Blogs are frequently incorporated into a website’s search engine optimization (SEO) strategy to attract site visitors. By providing valuable content that targets relevant keywords, SEO blogs can improve the website’s ranking on search engines.

Portfolio

Portfolio websites serve as a digital showcase for professionals such as product designers, content writers, and wedding photographers to present their best work to potential clients or employers. Having your own website allows you to curate and display your projects, skills, and achievements in a personalized and visually appealing way.

Education

Educational websites provide users with informative content, resources, and learning materials on various subjects—often through interlinked web pages that are easy to navigate and explore. Educational websites cater to a wide range of learners, from students and educators to professionals seeking to expand their knowledge or acquire new skills. They often include features like online courses, interactive tutorials, and discussion forums.

Wiki

Wikis are collaborative websites that allow users to create, edit, and contribute content collectively. The most well-known example is Wikipedia, but there are countless wikis dedicated to popular fandoms of TV shows, computer games, and books. On these wikis, fans can explore and contribute to the lore, characters, and history of their favorite fictional universes.

Government

Government websites, which end with the .gov domain extension in the US, give people access to official information, services, and resources related to various government agencies and departments. These publicly accessible websites often include online forms, public records, and information about laws, regulations, and government programs, serving as a digital bridge between citizens and their government.

Nonprofit

Nonprofit organization websites serve as a platform for these organizations to showcase their mission, goals, and initiatives, and to engage with supporters and potential donors. These websites often include features like donation portals, event calendars, and informational resources.

Personal

Personal websites are digital spaces where individuals can express themselves, share their thoughts, and showcase their skills or experiences. These are often static websites made using simple content management systems (CMS) that eliminate the need to code.

You never get a second chance to make a first impression, and a good one goes a long way. On social media platforms such as TikTok, your profile picture may be one of the first things someone sees. Whether you’re running a brand account or a personal one, having a PFP that showcases your personality is paramount. 

Learn how to create and upload an eye-catching TikTok PFP to put your best foot forward. 

What is a TikTok PFP?

A TikTok profile picture (PFP) is a small, circular image displayed on your profile page and featured in your content as an identifier. The minimum acceptable image size is 20 pixels x 20 pixels. Upload a larger image—around 200 pixels x 200 pixels—with a 1:1 aspect ratio for the best results. This will give you the most flexibility when it’s time to crop your photo. You don’t need to start with a round image. TikTok will automatically crop your profile photo into the correct shape when you upload it.

Tips for creating a great TikTok profile picture

Your profile photo is the image you present to the world (on social media, at least). Here are some strategies to help make yours memorable:

Express your identity

Similar to crafting a writing tone, you want the tone for your profile picture to reflect your aesthetic. If you’re running a business account, use colors and fonts that match your brand guidelines. Similarly, for a personal account, select an image that hints at the tone of your content. For example, use a goofy pic if your content is mostly humorous or a photo on the beach if your content is travel-focused.

Design something unique

You don’t need to use a photograph as your profile picture. Many accounts use graphic design elements to create a custom TikTok PFP. This approach may benefit brands that aren’t associated with a single person or figurehead. If you have a business account, using your logo or company name in your PFP makes it easy for viewers to identify your account.

🎨 TOOL: Create professional logos in seconds

Maintain visibility

Blurry, dark, or pixelated images are hard to see in the TikTok app. Start with a high-quality image to ensure your final photo is focused and clear. Choose a crisp, well-lit picture as your starting point, then preview your image on the app before you publish it. 

Note that profile pictures are small, and some images or designs that look great on a monitor may be hard to see on a mobile device. Double-check to ensure the text is legible and everything fits within the round display. 

Try a GIF

TikTok allows you to set a GIF as your profile picture if you want. These short, looping animations are composed of a series of still images. Using a GIF as your PFP can give other users insight into your personality, sense of humor, and style.

For example, a fashion influencer could use a GIF depicting herself modeling an outfit. This moving image would convey glamor and gravitas that a still image couldn’t capture. A comedian might use a GIF of herself smiling and shrugging to represent her light-hearted tone.

Edit your photo

Consider adding filters, text, and illustrations to help your PFP stand out. Filters enhance your photos or convey a particular mood or aesthetic, text boxes can help convey information, and emojis can add a dash of fun.

How to upload a profile picture on TikTok

There are multiple ways to change your TikTok PFP. Find step-by-step instructions for two methods below. 

How to upload a new image

1. Navigate to your profile page
2. Select “Edit profile”
3. Tap “Change photo”
4. Select your photo
5. Crop the image
6. Save and post

This approach provides the most photo selection options. Choose this method if the image you want to use isn’t already in your camera roll or if you haven’t granted TikTok access to all of your photos:

1. Navigate to your profile page

Launch the TikTok app. Tap the profile icon on the bottom right-hand corner of the screen to head to your profile page. 

2. Select “Edit profile”

Locate the gray “Edit profile” button under your account name. Tap the button to open up the editing page. 

3. Tap “Change photo”

Your current profile picture should appear at the top of this page. If you haven’t uploaded a photo yet, you’ll see a gray circle. Tap the camera icon over the image that reads “Change photo.”

4. Select your photo

After you tap “Change photo,” the app will bring up a list of options. You can choose between “Take photo,” “Upload photo,” and “View photo.” Choose “Take photo” if you want to use the camera on your mobile device to snap a new picture or selfie. 

The “Upload photo” option allows you to select a new photo from your phone. “View photo” brings up a larger version of your profile picture so you can take a closer look. Take a new photo or select the file you’d like to use by tapping on the image thumbnail. 

5. Crop the image

After you choose your image, the app will display a preview of your profile picture cropped into a circle. You can adjust the cropping by pressing down on the image and dragging it across the screen. 

To adjust the size, use two fingers to zoom in or out. Zooming in too much may result in a blurry or pixelated image. If you upload a rectangular image, adjust the cropping so that the subject is visible within the circle. 

6. Save and post

Tap the red “Save and post” button once you’re happy with your edits. This page includes an option to “Post this photo to story.” Uncheck the circle next to this box if you don’t want to share a story slide featuring your new profile picture.

How to upload an existing image

1. Navigate to your profile page
2. Press your profile picture
3. Select your photo
4. Edit and post your PFP

If the image you want to use is already in your camera roll or on TikTok, you can use this streamlined method to change your profile picture: 

1. Navigate to your profile page

Open the app. Tap the “Profile” button on the bottom right corner of the screen to open your page.

2. Press your profile picture

Your current PFP will appear at the top of your profile page. Press and hold down on the image to bring up a list of options. Be sure to press on the photo itself, not the blue plus sign at the bottom of the image.

3. Select your photo

Tap the gray “Change photo” button beneath your profile picture. The app will automatically display your photo library and a gray thumbnail with a camera icon. Tap the image you want to display or use the camera button to take a new photo.

4. Edit and post your PFP

After you select an image, the app will display a preview of your new profile picture. Drag the image across the screen to adjust how it’s cropped, or use two fingers to adjust the size. Tap “Save and post” to publish your photo. Uncheck the box next to “Post this photo to story” if you don’t want to share an image of your new PFP to your TikTok story.