A continuous need for working capital is one of the key challenges Amazon sellers face on a regular basis. Finding the right financing service provider and the best loan model that suits your specific needs is paramount for expanding your Amazon sales and getting you to top seller status. Often, sellers cannot buy a potential best seller product because they don't have enough spare funds at the right moment to invest in new stock.
If you want to start selling new stock you would typically need to pay for the inventory first. Moreover, you need to ship and store that stock incurring additional costs which could take a significant portion of your working capital.
Many online sellers start their Amazon business using an organic reinvestment model whereby they sell one stock lot and then use sales proceeds from that lot to finance the next round. This might be a good starting concept but it naturally slows your growth, and may force you to forgo some good business opportunities. Even if you already have a top selling “winner” product, you might not be able to ensure you have adequate stock in place ready for delivery to buyers because your working capital recovery is not fast enough to replenish and ship new stock from suppliers in a timely manner. As your online selling business grows - your overall costs will increase, making it increasingly important to ensure availability of adequate working capital.
Access to a financing service which suits your eselling operations is key to ensuring your working capital needs are satisfied.
Unfortunately, traditional lenders such as banks, do not effectively finance online sellers since their core lending products typically cater for more traditional brick-and-mortar businesses. It is therefore harder for Amazon merchants to secure adequate financing from traditional lending institutions despite eCommerce’s strong growth rates compared to traditional businesses. Finding a good financing option beyond traditional channels is often a necessity for Amazon sellers.
Some of the signs that you should start getting financing are as follows:
- You have been a successful Amazon seller for some time and are confident that you can grow your online business and increase earnings if only you had more funds to invest in additional inventory
- You have found a unique/high-quality product which could well end up becoming a bestseller but you simply do not have enough capital to buy adequate stock
- You have a clear growth strategy and you know how much capital you need in order to achieve your growth target
Here are some of the workable financing options available to Amazon sellers:
1) Banks Loans
These are typically not easy to secure, more so if you do not have a good credit history.
Moreover, many banks won’t want to lend to Amazon sellers because online selling financing is outside of banks’ lending appetite. Lastly, the terms and conditions of the bank loans and repayments are in many cases not suited to the realities of online selling.
2) Credit Cards
An easier and more common (albeit often insufficient and expensive) funding option for many small businesses and entrepreneurs. The higher your credit rating, the higher your credit card limit will be. Plus you might be eligible for additional rewards and perks associated with your specific credit card program which could help you to further enhance your business funding.
3) Supplier Credit
Some suppliers and service providers offer credit terms to their eseller clients. The most typical credit periods are either 30 or 60 days. However, in many cases, supplier credits are only available to established sellers with long track records. In addition, while supplier credits might be available to you, suppliers still tend to prefer receiving the payment upfront and might offer better prices and preferential treatment to those sellers who can pay in advance.
4) Amazon Lending
Amazon does have a lending program but it is available on an invitation-only basis and is limited to active merchants based in the US, the UK and Japan. Since it is available by invitation-only, you cannot actually apply for a loan but rather need to wait until Amazon themselves decide that your selling activity is “satisfactory” and deserves a loan offer. Amazon also has sole discretion for deciding what the terms of lending will be. A seller has no option to negotiate a better deal and can only accept or reject what Amazon offers. There is no flexibility associated with Amazon loans which makes it less attractive to the few sellers who qualify.
5) Specialized lenders for Amazon sellers
The lending industry is starting to provide customized financing solutions for Amazon sellers.
Specialised lenders tend to better understand online business models ensuring their financing solutions cater to the specific needs of Amazon sellers.
Currenxie specialises in helping online sellers repatriate their sales revenues from global marketplaces, and now offers financing for Amazon sellers.
These are some of the key benefits of using Currenxie financing solutions
- Fast online onboarding and quick financing limit approval
- Flexible financing terms are customized to each seller’s specific needs
- Currenxie pre-pays your suppliers and logistics providers and collects the borrowed amount directly from your future Amazon sales revenues thus freeing you up to concentrate on your core business – Amazon selling
- You get free collection accounts in key constituencies where Amazon platforms are available to third party sellers
- No setup or maintenance fees
- You will enjoy the pro-rata daily financing interest and a transparent withdrawal rate of just 1%
- Currenxie offers only the fairest real-time mid-market FX rates
- A fully-functional online platform and a dedicated mobile app allows you to manage your Amazon receivables and withdrawals directly from your Currenxie account wherever you are and whenever you want
Please contact us on firstname.lastname@example.org to find out more!