If you’re ready to take your ecommerce business to the next level, you probably know that you’ll need to invest in growth — and may even need financing to cover such an investment. But when it comes to ecommerce financing, there are a lot of considerations and unknowns. After all, this space is vast and you don’t necessarily have the time it takes to make sense of it all.
To help you determine if you’re ready for financing and where to start, here are 5 things you may not know about the space.
1.The high cost of a missed opportunity
In ecommerce, opportunities for growth often come about unexpectedly, like a supplier’s flash sale on inventory, for example. But it’s not always possible to take advantage of these sales, especially when your income isn’t paid out in real-time. So when you don’t have the necessary cash to buy inventory at a sudden (and expiring) discount, you miss the opportunity to turn it for a higher-than-usual margin.
What’s more, if you experience a sudden surge in sales, run out of inventory sooner than expected, and are unable to pay for a resupply order in time, you risk losing a lot. After all, if you can’t meet growing demand, you could run out of stock and lose sales. So instead of growing your business and increasing profits, you’re losing money and jeopardizing your ability to sell all together.
Thankfully, financing can help you avoid all of this — and chances are, the cost of financing is not nearly as high as the cost of these missed opportunities.
2.Banks may not be the answer
Financing and banks seem to go hand-in-hand, but when it comes to business financing — and especially ecommerce financing — your bank may not be the answer. After all, banks simply don’t understand your business. For one thing, their long application process (which usually takes weeks if not months) prevents you from taking advantage of most growth opportunities. Not only that, banks don’t see Amazon as an asset or understand your full potential. Instead, their antiquated systems rely heavily on credit (especially your personal credit) and involve site visits to actual storefront businesses. So even if you’re doing $300,000/month on Amazon, they have a hard time seeing that as an asset, especially if your inventory is spread across multiple FBA warehouses. On the contrary, they consider ecommerce sellers to be too risky, making approval rates lower.
3. Business financing is different from personal financing
Fortunately, bank financing isn’t your only option. There are a variety of financing solutions — both business and personal — out there. But you should really only consider business financing. After all, it is NOT the same as personal financing. On one hand, business financing leverages the health of your business to help you take things to the next level. For example, investing in a proven product to turn more inventory more quickly or taking advantage of a flash inventory sale to maximize your margins. However you use it, at the end of the day, business financing is a tool to help fuel your growth.
In this way, business financing is different from personal financing. While it’s rarely a good idea to live beyond your means or take out a personal loan that you may have trouble paying back, accepting outside financing to grow your business is 100% different. With personal loans, you stand to lose money, but when you take out financing and put that extra cash right back into your business, chances are you’ll make money.
One of the biggest mistakes small business owners make is to think of business financing the same way they think of personal debt. One is a tool while the other is a liability.
4. Financing needs to change fast
As a business owner — especially an ecommerce seller — your need for financing can change fast. Sure, you may not need it today, but you could tomorrow. After all, your supplier could run a flash sale on inventory and, because your income hasn’t been paid out yet, you don’t have cash readily available to bulk up on product at a discount.
At the end of the day, demand can change at the drop of a hat, especially on platforms like Amazon where demand is seemingly unlimited. No matter how much you plan and predict, you never know when sales might blow up, leaving you needing cash ASAP. So even if you think you don’t need financing, you should understand all your options now — that way you can act fast when your need for financing actually arises.
5. You can get approved for financing in 24 hours without a credit check
The next time you wake up needing cash fast, don’t panic. There is a way to get financing in as fast as 24 hours without a single credit check. How? Payability.
Payability offers perhaps the most ecommerce-friendly financing solution out there — after all, their products are designed specifically around your needs and pain points. Payability evaluates your account health and sales performance to advance you your marketplace income or pay you daily and in real-time. For example:
- Instant Advance: Payability buys a certain amount of your future receivables up front and at a discount, giving you a large lump sum of cash you can use to invest in big growth opportunities.
- Instant Access: Payability pays you your marketplace income one business day after making a sale, so if you have $1,000 in your account on Monday, you’ll get $800 of it on Tuesday (the rest is kept on temporary hold to cover returns/chargebacks and released to you when Amazon releases your balance).
- Seller Card: Access your income even faster, including on weekends and holidays, and earn cash back rewards on your purchases.
- Multichannel Financing: Payability’s solutions are available to to sellers on Amazon.com, Walmart, Jet, Tophatter, Etsy, NewEgg, Shopify and more.
Since 2016, more than 2,500 marketplace sellers have used Payability to increase cash flow and grow their businesses. Take Gina Goldring, for example. She grew her Amazon business by 50% in one month after getting an Instant Advance. Learn more about how Payability can help your business grow this quickly at http://go.payability.com/Nozani and get a $200 sign on bonus and discounted Instant Access fees.