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5 Ways to Finance Your Amazon Business Expansion
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As an established Amazon seller, you are likely looking for ways to take your business to the next level. There are several ways to get there, whether it is by expanding internationally, adding new products, adjusting your business model (such as moving from wholesale to private label), setting up shop on another online marketplace, or taking advantage of seasonal trends and/or big opportunities like Prime Day or the lucrative Q4 season.
While the possibilities are seemingly endless, actually putting a growth strategy into action can be a challenge. After all, you need money to invest in these growth areas (or any for that matter), but cash can be as elusive as an Amazon seller. Unless you have a large pile of it lying around, you’re stuck waiting two weeks for your income.
To prevent the cash flow gaps that come from Amazon’s payment delay, you may want to consider financing. Here are five options that can increase cash flow and allow you to fund your next business expansion:
1. Savings and Credit
As a successful Amazon seller, you may have access to a pool of funds to help with your expansion — or at the very least, a credit card. It can be tempting to use either of these for growth since you basically have immediate access to funds at no cost (unless, of course, you don’t pay your credit card bills in full or on time). However, your savings isn’t an unlimited source of cash and using a credit card could negatively affect your credit score if not used responsibly.
2. Bank Loans and Lines of Credit
You could go to your bank for a business loan or line of credit, but there are a few things to keep in mind. While banks offer high dollar amounts, low interest rates, and long payment terms, the application process can take months and approval rates are low, especially for online businesses. Banks also rely heavily on your personal credit score when evaluating your business loan application, so if you have a low FICO score or only a couple years of business history, an approval is unlikely. Not to mention the approval process is long, leaving the door open for another seller to come by and buy the inventory out from under you while you’re waiting to get approved.
3. Online Business Loans
There are several online business lenders that have streamlined the lending process to make it easier for business owners to get financing. Unlike banks, the application process is fast and simple and approval rates are high (even if you have a low FICO score). Loan terms are also different from banks: loan amounts are smaller, payment terms are shorter (often with daily or weekly auto-debits), and interest rates are higher. You can typically get funding in a matter of days versus a bank’s weeks-long (sometimes months-long) process.
4. Amazon Lending
As a seasoned Amazon seller, you may have seen an offer in Seller Central for Amazon Lending, an invite-only financing program that the e-commerce giant offers to eligible sellers. That means you can’t apply for an Amazing Lending loan, but if you qualify, they’ll notify you directly with a binding offer — i.e. the terms (including loan amount, payback, and cost) are “take it or leave it”.
There’s also a solution designed specifically for high-growth Amazon sellers like you: Payability, a financing company that pays you 80% of your Amazon income one business day after making a sale.
Here’s how Payability works: if you have $5,000 in your Amazon account on Monday, Payability will pay you $4,000 of it on Tuesday. The rest is kept on hold to cover any necessary returns or chargebacks and is paid out according to Amazon’s regular two-week payment schedule. Essentially, it’s your income as you earn it for a 2% flat fee on gross sales.
With immediate and daily access to cash, the possibilities for expansion are endless. Just ask Gifts Fulfilled — a gift basket company that has grown exponentially using Payability. If you’re ready to see this kind of growth for your own Amazon business, visit go.payability.com/Feedvisor to sign up and get a $200 sign on bonus. Sellers with $50,000+/month in sales may qualify for reduced rates.
Check out this short video from the Payability YouTube channel for more on how it compares to other financing options. To see what real customers are saying, search Payability on TrustPilot, Web Retailer, and BBB.