Are you waiting for Amazon to pay you so you can buy more inventory – and keep your business afloat? This is a common dilemma that many sellers find themselves in.
What financing options are out there- and are they right for you? In this post, we’ll tell you everything you need to know. Keep reading to learn more about Amazon seller financing.
What is inventory financing for Amazon sellers?
Inventory financing for Amazon sellers will help you get a lump sum or cash so you can order inventory without waiting on Amazon to pay you.
If you use Amazon financing processing usually takes just a few moments and you might not even have to put your inventory up as collateral. In some cases, there isn’t even a credit check (this makes Amazon inventory financing a unique and far more desirable option compared to getting financing from a bank).
To qualify, you’ll simply need to leverage your account health and sales performance. This will make you eligible for a cash advance or inventory loan – there’s no tangible collateral needed. You just have to show that you’re capable of repaying the loan with your business income.
However, a majority of Amazon sellers will need to use alternative solutions for inventory funding. Luckily, there are plenty of options out there, some that may even be a better fit than Amazon financing. A little later on we will look at alternative inventory funding solutions.
Common reasons Amazon sellers seek inventory funding
Amazon sellers and businesses are not always like traditional businesses. This abstract nature of the inventory can make it tough for sellers to get approved for a loan. Therefore, Amazon sellers are often left searching for alternative inventory funding options. After all, the whole foundation of an Amazon business is based on the products they sell. A lack of funds can send Amazon sellers in desperate search of funding. This is one of the most common reasons Amazon sellers seek financing.
Another common reason Amazon sellers seek inventory funding is to improve cash flow. Purchasing and holding large quantities of inventory can disrupt cash flow, especially when Amazon can take a while to pay for sold inventory. Inventory funding can help improve cash flow and alleviate financial stress.
Most common inventory financing options for Amazon sellers
Here are a few of the most common ways for Amazon sellers to get inventory financing.
Amazon Lending is a relatively new option that is offered, as you might guess, by Amazon itself. These direct loans allow sellers to borrow working capital from Amazon at rates that are less than credit cards. The application process is simpler, but the loan amounts tend to be smaller. However, you’ll have the money quickly.
Amazon sellers may also qualify for SBA or Small Business loans. Usually, these are small (a few thousand dollars or so). You may not have the money as quickly as if you were working directly with Amazon Lending.
Another way to get inventory financing is to put it on your credit card. This isn’t always the wisest choice, financially, since credit cards tend to carry high interest rates. If you need to float those costs for longer than one month (the typical billing period on a credit card), credit cards are not advised. However, for short-term expenses when you’re in a pinch, credit cards, particularly business credit cards, are just fine.
Merchant cash advances
This is a type of financing that will allow you to get a cash advance based on the purchase and sale of future credit card income. You don’t have regular fixed payments but instead, the lender will recoup a set percentage of your credit card sales each day.
A 7(a) loan is a loan offered by the SMall Business Administration. It provides short and long-term working capital and has minimal eligibility requirements. Most 7a loans are repaid with monthly payments or principal and interest.
Inventory funding with Kickfurther
One of the best Amazon inventory funding options for sellers is offered by Kickfurther. Kickfurther can connect you to a community of backers that can help you fund the inventory you need, at up to 30% lower cost than other options. It gets better – you won’t have to pay a dime until you sell. You can fund millions of dollars’ worth of products in just an hour, making it a great option for Amazon sellers who need inventory – and fast.
Benefits for Amazon sellers financing their inventory
There are countless benefits for Amazon sellers who choose to finance their inventory. Here are some of the most noteworthy.
Relieve Short Term Cash Flow Issues
The most tangible benefit of financing your inventory as an Amazon seller is that you will be able to leverage your account health to get inventory financing fast. You won’t have to worry about stock outs or lost sales.
Secure Cash for Extra Stock
Another Obvious benefit of Amazon inventory financing is that it will let you buy extra stock for important selling dates like Black Friday or Prime Day. Since you have the money you need, you can buy more inventory to turn it over faster – and make more money.
Add New Products
Are you thinking about adding new products to your inventory – or perhaps adding completely new and unrelated products? If so, financing might be the best bet. This will give you the cash you need to add new products so you don’t miss out on big opportunities just because money is tight.
Take Advantage of Special Offers
Finally, Amazon inventory financing will allow you to take advantage of special offers. You might find that slower months are a good time to buy inventory, since you’ll enjoy off-season discounts. When you have the right financing in place, you can take advantage of these special offers regardless of your cash flow, something that can help save you money.
How fast can my business get Amazon inventory financing?
It depends on the financing option you choose. For some, like Kickfurther, you can get the financing you need in less than an hour. For others, you may have to wait a day or two for your sales profile to be verified (or your credit to be checked).
Qualifications to obtain inventory financing to be aware of
In order to get inventory financing, you’ll usually need to be a product-based business (obviously, service-based businesses are not eligible). You should have been in business for at least one year and meet the lender’s minimum requirements. Some will only lend to businesses that need hundreds of thousands of dollars worth of inventory to make the loan worth the investment.
You may also need to provide a detailed financial history, including financial records like tax returns, profit and loss statements, and inventory turnover ratios. At Kickfurther you will need to sell a physical product(s) or non-perishable consumables with revenue between $150k to $15mm over the last 12 months. If you meet these minimum requirements you should create a profile to get started.
How Kickfurther can help
If you’re an Amazon seller, you likely already know what it takes to succeed in this competitive business sphere. Do everything you can to be successful – and take advantage of Amazon inventory financing options for sellers. Remember, Kickfurhter can help you meet your goals – while saving you time and money.
Kickfurther makes funding your Amazon inventory easier. With a 99% funding success rate and 1000+ opportunities funded, Kickfurther is proven to help small businesses thrive. Kickfurther is the world’s first online inventory financing platform that enables companies to access funds that they are unable to acquire through traditional sources. Perks such as customized repayment schedules and fast funding (sometimes in as little as one hour) are sure to benefit your business.