What Can You Do To Understand & Prevent Lost Sales?

Posted on by Amanda Levine

Lost sales happen. We know it sucks but it’s all part of running a business. Fortunately, there are strategies that businesses can use to reduce instances of lost sales. Sometimes, all it takes is a little perspective and the motivation to pick yourself back up! In this article, we will talk about why you should pay attention to lost sales and provide you with some tips on how to prevent it. Let’s dive right in!

But first, what is a lost sale?

A lost sale is simply a missed sales opportunity due to instances of stockouts, lack of product information, and poor customer service. It may be referred to as lost income due to orders that could not be fulfilled for whatever reason. Now that we got that out of the way, let’s talk about the importance of acknowledging lost sales.

Why should you pay attention to lost sales?

One way to look at lost sales is that it allows you to better understand your customers and the overall efficiency of your operations. After all, failing presents us with a unique opportunity to learn and grow. Here are some reasons why you need to pay attention to lost sales:

  • A lost sale allows you to step back and reevaluate your sales approach. Are you paying attention to your internal procedures? Are you training your staff to provide great customer service? Are your products reasonably priced? If you don’t pay attention to the key processes within your business, it would be much more difficult to come up with a sales process that works.
  • A lost sale says a lot about your marketing and promotions. Or lack thereof! Losing a sale is not only a sales problem, it can also be seen as a marketing problem. One significant aspect of sales that businesses need to pay attention to is the alignment of sales and marketing operations. Knowing who your ideal customers are and how to properly target them enables you to craft valuable marketing promotions instead of just offering them a one-size-fits-all approach.
  • A lost sale means you’re doing something wrong. Whether it’s not listening well enough to the needs of your customer or not having an idea about who your buyers are, a lost sale means you’re doing something wrong. The best course of action to take is to look at your internal processes and determine areas that need improvement.

What are the most common reasons that contribute to lost sales?

Fundamentally, paying attention to lost sales means you want your business to improve. As a business owner, it’s important to recognize that sales play a pivotal role in the success of your endeavors. Sluggish sales growth can force companies to apply cost-cutting measures or, in the worst-case scenario, file for bankruptcy. To avoid that, you must know the most common reasons that contribute to lost sales.

  • Not Differentiating Your Product
    • Just what exactly sets your product apart? Now that more and more people are paying attention to the products that they are consuming, proper product differentiation makes you stand out in a crowded market while also establishing brand loyalty. To successfully set your brand and your product apart from your competition, make sure to promote the value that you offer by highlighting a problem that your product solves.
  • No Concrete Knowledge of Your Ideal Customers
    • Who are your ideal customers? By knowing who your ideal customers are, you will be able to gauge how you could provide value by solving a problem that they have. In addition, understanding your customers would give you an idea about improvements you can make to be able to meet customer expectations.
  • Lack of Customer Engagement
    • Are you building and nurturing a relationship with your customers? After researching who your ideal customers are, it’s now time to pay attention to customer engagement. Keeping customers engaged throughout the buyer’s journey lets you collect valuable customer information that ultimately influences buying behavior.
  • Lack of Staff Training
    • Do you properly train your employees? Businesses should recognize that employees can be amazing brand ambassadors. Well-trained staff will be able to showcase what sets your products apart and what value it provides to your customers.
  • Sales Forecast Inefficiency
    • Do you have a system in place to accurately predict sales fluctuations? As one of the most common business pain points, stockouts can lead to lost sales and customer dissatisfaction. Sales forecasting, if done properly, helps your business secure enough stock to satisfy customer demand even in the busiest shopping seasons.

Tips to Prevent Lost Sales

Sometimes, the greatest sales lesson can be learned from a sale that you weren’t able to close. After all, picking yourself up and moving on is an attribute of a great entrepreneur. However, you must learn from your mistakes and use them as an opportunity to improve your operations going forward. If you’re unsure where to start, we got you covered! Here are some tips to prevent lost sales:

  • Keep track of lost sales
    • Tracking lost sales gives you a better understanding of why you lost a particular sale. It’ll help you avoid practices that are causing a leak in your sales funnel and focus your energy on key areas that increase customer satisfaction. (Pro tip: Consider purchasing a robust customer relationship management (CRM) tool to easily track lost sales data.)
  • Improve your forecasts
    • Forecasting gives you an idea about the amount of inventory to secure to satisfy customer demand. Not only will you greatly reduce instances of overstocking and stockouts but you will also improve how you manage your cash flow. However, note that forecasts are not foolproof. Unforeseen external factors can always invalidate your predictions no matter how accurate you think they may be.
  • Calibrate your inventory management strategy
    • Proper inventory management gives you an overview of what goes in and out of your inventory. Are you storing too many products? Is your inventory turnover ratio helping or damaging your cash flow? Do you have enough products during peak shopping seasons? Having an efficient inventory management strategy enables you to better prepare for seasons with stronger demand and place orders ahead of time to prevent stockouts.
  • Build a relationship with your suppliers
    • The human factor plays a vital role in the success of a business. As an entrepreneur, your supplier will be your most important business partner. The approach you take with your suppliers impacts the way they service your business. One mistake many businesses make is putting too much focus on price. It’s only natural that you want the best margins but it’s equally beneficial to put quality and a trustworthy reputation first. In addition to proper inventory management, you should also consider building a relationship with a handful of suppliers to ensure that you are not relying on just one supplier’s capability.
  • Offer discounts and promotions
    • Offers and discounts are a great way to quickly attract potential customers and even those sales opportunities that you lost. It’s no secret that people prefer buying things on sale. Why not use it to your advantage and increase sales across the board?
  • Ensure you have enough financing
    • Owning a product-based business means inventory is your lifeline. Without it, you would not be able to sell products to meet the demands of your customers. If you’re unable to sell products, how will you earn money? Not having enough cash on hand to purchase additional inventory can hurt any business. While it pays to keep a close eye on your financing, it also helps to be knowledgeable about the different financing methods you can use to be able to acquire the inventory that you need. For your inventory needs, check out inventory financing.

What is inventory financing?

As the name implies, inventory financing is a financial product that lets businesses pledge purchased inventory as collateral to obtain a term loan or a line of credit. Typically, inventory financing serves as a last resort for small to medium-sized businesses that have exhausted other efforts to secure financing. One great inventory financing tool that businesses can check out is Kickfurther.

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. We connect brands to a community of eager buyers who help fund the inventory on consignment and give brands the flexibility to pay that back as they receive cash from their sales. This alleviates the cash-flow pinch that lenders can cause without customized repayment schedules allowing your brand to scale quickly without impeding your ability to maintain inventory. 

Key Takeaway

It’s always advisable to dig deeper and understand why you’re losing sales rather than just accepting it. By identifying the various reasons behind lost sales, you are already taking a huge step forward in reevaluating your approach and implementing a strategic plan that enables you to see growth in your sales funnel. 

Tips on How To Price Your Early Stage Startup Product

Posted on by Amanda Levine

While setting the right prices for your products sounds like a simple process, it’s not as straightforward as it seems. As a business owner, you must consider key factors such as researching pricing strategies, tracking how much competitors are charging, and understanding who your potential customers are. After all, determining your startup product price is one of the most essential elements in ensuring the profitability and long-term sustainability of your business.

Keep in mind that introducing your product at the price point means successfully satisfying your customer and laying the foundation for your business to succeed. In this article, we will talk about everything there is to know about pricing your early-stage startup product and identify various strategies you can employ to find the sweet spot between overpricing versus underpricing.

What is startup product pricing?

An ideal startup product price enables your business to be favorably positioned against your competitors. But before anything else, it’s important to note that the price of your product is determined by a myriad of different factors. For instance, having a deep understanding of your potential and existing customers allows you to price your prices depending on how much your customers are willing to pay. It will also allow you to personalize your sales and marketing efforts to be able to reach the right audience.

However, that’s just one piece of the puzzle. When coming up with a price for your startup product, it also helps to look at what your competitors are doing as well as the current economic conditions that may affect your customers’ purchasing power. Startup product pricing aims to find the right pricing structure for a particular product or service. While often overlooked, product pricing is an important process that businesses need to pay attention to to ensure that a business remains competitive.

What is the main goal of startup product pricing?

The main goal of startup product pricing is to ensure that your business can maximize its profits. It helps businesses remain competitive, increase sales volume, and successfully pull ahead of the competition. Another vital part of product pricing is understanding the concept of willingness to pay (WTP).

WTP refers to the maximum price that the consumer is willing to pay for a particular product or service.

We know what you’re thinking. Wouldn’t willingness to pay naturally vary from one customer to the other?

Yes, you’re absolutely right. However, the main incentive when establishing WTP is for you to make an informed decision when it comes to estimating your startup product’s price. It’s rare for businesses to use just one type of strategy to establish the price of a product. Usually, businesses use a combination of pricing strategies to calculate the best possible price for a product or service.

How do you price a startup product?

At its most basic, pricing a startup product involves adding up all the costs of production such as material costs, labor costs, and overhead costs. However, there are a few critical considerations to keep in mind to be able to complete your product pricing calculations.

  • Understand your buyers. Regardless of the type of product or service you are offering, it’s imperative for you to understand who your customers are. Having an understanding of your buyers will give you a better idea of how much your product is worth depending on the value that it’s providing your customers.
  • Evaluate your costs. The simplest way to determine the price of a certain product is to evaluate its production costs. How would you be able to determine the appropriate price for a product if you don’t know how much you are spending when making them?
  • Determine your desired profit. Now that you have evaluated your costs, it’s time to identify your markup percentage. Markup percentage refers to adding a certain percentage to the original cost to make a product in order to come up with a selling price.
  • Research your competitors. Researching how your competitors are pricing their products is a great way to better understand the market. Looking at what your competitors are doing can be especially effective if you belong in an industry with a lot of similar businesses as this strategy is mainly driven by direct and indirect competitors.
  • Choose a pricing strategy. Choosing a price strategy is important as it provides structure to the product pricing process. There are three main pricing strategies: value-based pricing, competitor-based pricing, and cost-plus pricing. In the next section, we’ll talk about some of the most common pricing strategies used by startups.

What pricing strategies are most common for startups?

It’s no secret that pricing strategy can be a complex process. Along with complicated calculations, pricing strategies also take into account market conditions, competitor pricing, raw material costs, labor costs, logistical costs, and other qualitative information. Fortunately, there are pricing strategies out there that can help you figure out how much you should charge for your startup product. Here are some of the most common pricing strategies for startups:

  • Value-based pricing – Value-based pricing is when products are priced based on how much customers are willing to pay for a product. As you may have guessed, this customer-focused pricing strategy heavily relies on WTP. Businesses that use value-based pricing often offer unique and valuable products to their target market. As a result, brands can use the customer’s perceived value to reflect the worth of a particular product.
  • Competitor-based pricing – Also known as competition-based pricing, competitor-based pricing is a pricing method that involves setting your prices based on the prices of your direct and indirect competitors. This type of pricing strategy uses the pricing structure of a business’s competitors while also paying attention to general trends in the market. However, the biggest disadvantage to competitor-based pricing is that it needs another business that offers a similar product to work. Without competition, it’ll be difficult for businesses to accurately gauge product pricing especially if they are new to the market.
  • Cost-plus pricing – Cost-plus pricing is a simple pricing strategy that adds all the variable costs associated with production such as labor, materials, and overhead. After evaluating all variable costs, a business then adds a markup percentage to determine a product’s final price. Cost-plus pricing is usually combined with another pricing strategy to make sure that companies are selling their products at a reasonable price. If you’re still unsure about how cost-plus pricing works, check out our example below:

Let’s say company X spends $10 to make product A and wants a 50% profit margin when selling it. Through the cost-plus pricing strategy, company X needs to sell its product for $20 to achieve its wanted profit margin.

Like most things in business, pricing shouldn’t be static. Businesses should have the capability to constantly monitor market trends, measure and monitor relevant data, pay attention to buyer personas, and keep an eye on raw material costs. Through the use of pricing strategies, you can get a better understanding of the optimum price that you should charge to maximize your profits and successfully differentiate yourself from your competitors.

Is there a pricing formula that can be applied to a startup?

If you’ve reached this part of the article, then you have probably figured out that pricing takes a lot of time and effort. Realistically, there will be times when you may have to experiment with your prices to be able to figure out the best pricing strategy to use for a particular product. Unfortunately, there is no one-size-fits-all approach when it comes to startup product pricing.

As with all important business decisions, product pricing needs an ample amount of time. While it’s true that there are a plethora of pricing formulas that can be applied to your startup product, it should still be up to you to determine which type of pricing formula would best meet your startup’s needs. Having a practical approach towards pricing enables you to set the appropriate price for your early-stage startup product. Remember, not paying attention to how your products are priced will likely lose you money.

How Kickfurther can help

Now that you have figured out how to properly price your early-stage startup product, it’s now time to determine how you will fund your inventory needs. Fortunately for you, one such financing option is Kickfurther.

In a nutshell, Kickfurther is an inventory financing platform that helps businesses raise money for their inventory needs. Instead of going to traditional financial institutions like banks and credit unions, businesses can tap into Kickfurther’s community of backers to fund their inventory through consignment. Supporters would then be offered a specified rate of return and get paid when a company successfully sells its inventory. If you want to learn more about Kickfurther, visit www.kickfurther.com.

Conclusion

The truth is that there is no all-encompassing approach when it comes to pricing your startup product. Not every pricing strategy will work for every kind of business as each business is unique. For business owners, the best course of action to take is to spend an ample amount of time researching the different types of pricing strategies and decide which strategy best meets their company’s needs.

Brand Positioning: Strategies & Tactics for Small Businesses

Posted on by Amanda Levine

Nowadays, businesses only have one thing in mind: standing out. Due to the congested nature of today’s business landscape, setting yourself apart from your competitors is becoming more and more challenging. Without differentiating yourself in such a congested marketplace, it can be difficult to sustain your growth and remain competitive. But, when it comes to getting ahead of the competition, where do you even start?

Fortunately, there are several proven strategies that you can employ to be able to stand out. One such strategy is brand positioning.

What is brand positioning?

Brand positioning is an often overlooked yet impactful part of marketing strategy. At its most basic, brand positioning refers to how a company sets itself apart from its competitors. It helps customers get an overview of a company’s values to influence their buying behavior. However, brand positioning is more than just highlighting your company’s unique selling point or coming up with a catchy slogan, it’s a comprehensive strategy that aims to boost your credibility and thought leadership.

When positioning a brand, one of the most important things you need to keep in mind is brand association. Brand association is when your customers attribute a certain quality to your brand. It fosters easier recognition of positive characteristics that help people remember your brand and ultimately differentiate you from your competitors.

Why is brand positioning important for small businesses?

Small businesses need brand positioning to stand out in a crowded marketplace. It enables them to understand their customers better and make informed marketing decisions. Brand positioning is an integral part of marketing as it encourages customers and potential customers to take notice of your company’s uniqueness. Through this, your customers will pay more attention to the quality of your product regardless of price.

What are the main goals of brand positioning?

While the main goal of brand positioning is to differentiate your business from your competitors, it should also support brand recall. Brand positioning is an all-encompassing strategy that provides consumers with visuals and concepts about a particular brand. In essence, it determines how you could best communicate to your customers in a way that’s consistent with your brand. Highlighting why your product is different and creating a unique impression in your customer’s mind positions you and your products to stay adaptable and competitive.

How to Improve Brand Positioning: Tactics and Strategies For Small Businesses

As previously mentioned, brand positioning is more than just writing a catchy tagline and developing a logo. Brand positioning enables your brand to appeal to your target market and potential customers. However, it’s important to understand that brand positioning doesn’t happen overnight. Brand positioning, like everything in business, needs constant work. Fortunately, there are several tactics and strategies that you can use to better handle your brand positioning efforts. Check out some of them below:

Know who your customers are

Before you get started on your branding campaign, you should first know who your customers are. Effective brand positioning means you have to have an idea of the products that your customers buy, what their interests are, as well as what influences them when purchasing a product. Having this information will help you create a persona for your brand and enable you to personalize your messaging in order to appeal to your target market.

Establish your brand’s personality

A critical component of brand positioning, establishing your brand’s personality humanizes your brand and makes you more relatable to your intended customers. While finding your brand’s persona sounds simple, it actually involves a lot of work.

Consider Nike’s Just Do It campaign. It has stood the test of time (it was first used in the late 80s) and is still considered one of the most innovative campaigns of all time. Regardless of how you interpret it, Nike’s Just Do It campaign served as an inspirational rallying cry that spoke to millions of aspiring athletes and everyday people that want to take care of their health.

Determine what sets you apart – and focus on it!

Determining what sets you apart defines what your company can uniquely offer. In essence, this means identifying your unique selling point or USP. Identifying your USP enables you to highlight the value you create and sell the problem that you solve.

One of the best tools that you can use to determine what sets you apart is market research. Through the use of concrete data, you will be able to obtain an unbiased view of the marketplace and recognize what you need to do in order to stand out. Not only does a unique selling point give you an edge in the marketplace, but it also puts focus on what your competitors lack.

Create a strong positioning statement

A positioning statement gives your customers an idea of what you can offer that others can’t. It essentially creates brand recall that would let you stay top-of-mind no matter how congested a particular industry is. According to Adhere Creative, a brand positioning statement defines how your product fits in your customer’s lives. This means finding the value in your product and focusing on how you do it better than your competitors. If you are in the initial stages of launching a company or a new product, make sure to establish a strong positioning statement that is aligned with your overall voice. If you’re unsure where to start, here are a couple of tips when developing a position statement:

  •     Identify your target market
  •     Determine your differentiators
  •     Craft a positioning statement with your target market in mind and the unique benefits that your products offer
  •     Evaluate your positioning statement and make sure it’s clear and concise
  •     Communicate your positioning statement consistently (and regularly!) across all of your platforms

Consistency, consistency, consistency

To ensure brand positioning success, you need consistency. In a brand positioning campaign, it’s important to make sure that your copy, graphics, and other types of content ties-in with your overall brand voice. This is key for leads and customers to gain a holistic view of your brand and your products. Contrary to popular belief, brand positioning not only applies to customer-facing marketing collateral, but also to a company’s internal messaging. Having employees “live and breathe” what you stand for is a surefire way to bolster your brand positioning efforts.

What are some brand positioning examples?

Are you wondering if brand positioning works? Here are a few companies that have successfully positioned themselves over their competitors:

  • Dollar Shave Club – Quite possibly a contender for the best brand positioning strategy in the last decade, the Dollar Shave Club hit the ground running and attracted consumers towards their low-cost razors. However, that doesn’t mean that Dollar Shave Club products lack quality. The company has positioned itself as a leader in quality grooming products at a fraction of the price.
  • Trader Joe’s – Trader Joe’s brand positioning appeals to consumers that are looking for healthier alternatives. Put simply, Trader Joe’s highlights their health-focused products while creating a fun shopping atmosphere in each store. Another great thing about Trader Joe’s is that their products are reasonably priced. High-quality food at an affordable price? Genius.
  • Apple – It’s probably difficult to find a person in this world that has never heard about Apple and their products. From powerful laptops to sleek mobile phones, Apple’s message emphasizes the value that their products offer and positions them not only as a technology leader but also as a lifestyle brand.

Final Thoughts

The thing about brand positioning strategy, like everything in business, is that it really depends on the type of company you have and how you want to be perceived by the general public. It’s possible for companies to try and fail a couple of times before finding the right brand positioning formula. But once you establish the right brand positioning strategy for your company, it’ll be easier for you to shape consumer preferences and allow you to remain competitive in an oversaturated market.

About Kickfurther

Once you have established a great brand positioning strategy, expect your products to fly off the shelves! If you need additional financing to produce more inventory, check out Kickfurther. Kickfurther is an online inventory financing platform that connects brands to a marketplace of funding. 

The great thing about Kickfurther is that companies go through an extensive vetting process before they can tap into the Kickfurther community. This creative funding model is an innovative way for businesses to get the funding that they need without tying up their cash flow on inventory. For more information, visit www.kickfurther.com.

Tips on Requesting a Price Quotation From a Product Manufacturer

Posted on by Amanda Levine

In this guide, we’ll discuss price quotations, requests for quotation (RFQs), as well as the main difference between an RFQ and a request for proposal (RFP). We will also go through a couple of tips on how to successfully request a price quotation from a prospective product manufacturer. 

What is a price quotation?

Also known as a price quote, a price quotation simply refers to the fixed price required when producing a particular product. For product-based businesses, a price quotation is usually a document provided by the product manufacturer that details all the terms, conditions, and payment details associated when making a product. Once the business agrees with the provided quotation, both parties enter a business partnership with the potential to become long-term in nature.

How do I request a quote from a product manufacturer?

Requesting a quote from a product manufacturer involves a business process called a request for quotation or RFQ. Sometimes referred to as an invitation for bid, RFQ is a process that businesses use to urge suppliers to submit pricing quotations and payment terms based on specific requirements. An RFQ is an important aspect of the procurement process as it kickstarts the production of goods. The main goal of an RFQ is to solicit quotations from a group of shortlisted manufacturers with the purpose of comparing services, prices, and payment terms.

It’s important to note that a request for quotation shouldn’t be confused with a request for proposal (RFP). Like an RFQ, an RFP is a document that companies use to gather the necessary information about potential suppliers and/or contractors. While it may sound similar to an RFQ, RFPs are mainly used to acquire complicated information about suppliers and involve more than just price quotations.

The main difference between an RFQ and an RFP is that of scope. RFPs are used when a company needs detailed information about a potential supplier’s expertise, production efficiency, and logistical capabilities. In an RFP scenario, businesses are expected to use a more refined criteria when selecting potential suppliers in order to make sure that they will be able to meet their needs.

Is a Request for Quotation (RFQ) legally binding?

The short answer is no, it’s not. However, the details you include in an RFQ may be used in a legally binding document later on. A contract will only be established after a business selects a potential supplier.

How to write a request for a quote?

Now that you have an idea of what an RFQ is, you are ready to initiate the vendor selection process. The first step to requesting a quote from a prospective supplier is writing an effective RFQ letter. As previously mentioned, an RFQ usually comes in the form of a written document that aims to obtain critical information from vendors/suppliers. Here are some tips to help you get started:

  • What type of business do you have? Providing enough information about your business helps your potential suppliers understand your company better. It also gives them an overview of the vital requirements needed to be able to adequately produce your products. As a business owner, it is important for you to provide a detailed account of your business as well as how a potential supplier can help achieve your business goals.
  • What kind of products do you offer? As a rule of thumb, it’s always best to send RFQs to manufacturers that specialize in your industry. In this way, your prospective suppliers will already have the necessary tools and equipment needed to meet your production needs.
  • What are your requirements? As you may have guessed, detailing your requirements is the most important part of an RFQ. This section should include clear product specifications, delivery terms, milestones, payment terms, and cost breakdown just to name a few. When writing an RFQ, keep in mind that there’s no such thing as being too detailed. This allows you to set attainable goals for yourself and set realistic expectations for your supplier. That said, it would also help to have a clear scope of work for your production needs in order to avoid setting unrealistic goals.

Tips on Requesting a Price Quotation From a Product Manufacturer

While it’s true that price quotation letters are standard practice for businesses, not a lot of people understand that an RFQ is a fairly straightforward process. When done correctly, an RFQ is a great way to tell potential vendors what you want and what you expect from them. To help guide you, we compiled a few tips on how to properly request a price quotation from a potential product manufacturer. Check them out below!

  • Make a list of potential suppliers
    • When making a big purchase, it’s imperative to shop around and make sure that you’re getting the best deal possible, right? The same goes when choosing a potential supplier. Try to gather at least four to five suppliers to be able to gain a better understanding of the costs involved in making your item. Through this, not only will you be able to assess the individual capabilities of each supplier but also identify the most cost-effective candidate.
  • Say what you are looking for
    • To avoid wasting time on back-and-forth emails about your specifications, it’s best to just say what you are looking for. Adding as much detail as you can about the services and technical capabilities you need will enable you to get the most accurate quotes.
  • Present your requirements and conditions in full
    • In addition to adding as much detail as you can in the RFQ process, it’s also advisable to present your specific requirements and conditions in full. Ensuring that the information you are providing is complete and organized enables you to speed up the quoting process and avoid the delay of going back and forth for clarifications.
  • Make sure your tech pack’s ready
    • But first… what’s a tech pack? In an RFQ process, a tech pack refers to the technical information and components required for a manufacturer to be able to produce an item. It contains important aspects such as materials needed and construction instructions in an easily-digestible format. In essence, a tech pack serves as a blueprint that enables your potential manufacturer to turn your designs into a finished product.
  • Review quotations (But don’t just focus on price!)
    • Once suppliers respond to your RFQ, it’s now time to evaluate their quotations. When reviewing quotations, note that one of the most common pitfalls that businesses should watch out for is solely focusing on price. In business, it’s important to make the most out of a budget. However, solely focusing on price during the procurement process may do more harm than good. Remember, lower prices may sometimes reflect goods that are of low quality, and choosing quality over price is always a more sustainable choice.
  • Select your product manufacturer
    • Make sure to review the quotations you have received carefully. After reviewing the prices that you have received, you’re now ready to select your product manufacturer!

Bottom Line

Requesting a price quotation is a great way to gauge the technical capabilities of a potential supplier. It allows businesses to get an overview of a potential supplier’s capabilities and determine whether or not they would be able to meet their needs.

About Kickfurther

Kickfurther is an innovative inventory financing platform that puts a unique twist on the crowdfunding phenomenon by asking backers to fund a company’s inventory needs at a consigned rate. In a nutshell, Kickfurther allows a brand’s supporters and fans to fund their inventory on consignment. Supporters would then be offered a rate and get paid when a company sells its inventory successfully. If you want to learn more about Kickfurther, visit www.kickfurther.com.

5 inventory financing alternatives for product brands

Posted on by Amanda Levine

This post was last updated on June 9, 2026, by our partners at Bridge; the original post was published on Oct. 20, 2021.

Retailers, wholesalers, and seasonal businesses often turn to inventory financing when they need to meet demand without disrupting cash flow. But traditional inventory financing isn’t always easy to qualify for, and it’s not always the right fit. The good news is there are several inventory financing alternatives and financing options worth knowing before you commit to any one path.

Quick answer

Beyond traditional inventory financing, product brands have five alternatives worth comparing: purchase order financing, crowdfunding and consignment marketplaces, bank loans, a business line of credit, and personal loans. The best financing option depends on where in your production and sales cycle you need capital, how strong your credit history is, and whether you have a committed buyer.

To qualify for most types of inventory financing, businesses should have at least one year in business, a sales history, and a reliable inventory management system. But depending on your stage and business model, one of the financing solutions below may be a better match than standard inventory financing alone.

What are financing alternatives to fund inventory expansion needs?

Businesses need access to capital in order to grow. Even well-established, profitable small businesses can find themselves cash-constrained when it’s time to build inventory. The right financing option depends on where in your production and sales cycle you need capital, how strong your credit history is, and whether you have a committed buyer or are building inventory speculatively. Let’s explore five inventory financing alternatives that can fund your expansion needs.

Financing option How it works Best for What underwriting looks at
Purchase order financing Funds production against a confirmed retail PO, often up to 100% of COGS, paid to your supplier Brands with confirmed retail orders they can’t produce on their own The purchase order and the retailer’s credit, not yours
Crowdfunding / consignment Pools capital from many backers; with Kickfurther, Buyers fund inventory on consignment and you pay as it sells Brands with an engaged community building inventory ahead of a launch Your product and sales channel
Bank loan A lump sum repaid in fixed monthly payments at a set interest rate Established businesses with strong credit and clear inventory needs Your credit score, collateral, and time in business
Business line of credit Revolving capital you draw and repay as needed; you pay interest only on what you use Recurring or seasonal inventory cycles that need flexibility Your business credit history
Personal loan Personal financing applied to business inventory; no collateral, but higher rates Early founders without business credit, as a short-term bridge Your personal credit score

Purchase order financing

Purchase order financing is one of the most relevant inventory financing alternatives for product brands selling into major retail. Rather than borrowing against stock you already have, PO financing funds the production of inventory you’ve been ordered to make.

Here’s how it works:

  • A retailer issues you a purchase order
  • You don’t have the capital to produce and ship it.
  • A PO lender funds your cost of goods, often up to 100%, directly to your supplier or co-packer.
  • When the retailer pays, the lender is repaid and you keep the margin.
purchase order financing flowUnlike most small business loan products, PO financing decisions are based primarily on the strength of the purchase order and the creditworthiness of the retailer, not your own credit score or business credit history. That makes it accessible to younger brands that have landed significant retail placements but don’t yet have the track record to qualify for traditional financing.

For Walmart and Sam’s Club suppliers specifically, Bridge runs the official Purchase Order Financing Program for both retailers. Bridge funds up to 100% of COGS so suppliers can produce and ship without draining operating cash. Suppliers share their PO and basic financials, receive loan terms within 48 hours, and get funded the same day approval comes through. Kickfurther is proud to be one of the funding partners selected to underwrite financing requests on the Bridge platform.

PO financing is worth exploring if you have confirmed retail orders you can’t produce without outside capital. It’s not a fit for speculative inventory builds or businesses without a committed buyer.

Crowdfunding

Small businesses can raise money for inventory expansion using crowdfunding. Individuals and organizations create campaigns that backers or buyers choose to support. Crowdfunding pools together capital from multiple contributors, which can add up quickly without taking on a traditional small business loan.

Kickfurther takes a different approach: a marketplace where Buyers purchase inventory on consignment. You get the capital to purchase inventory without giving up equity, and payments align with when your inventory actually sells rather than on a fixed schedule. Most crowdfunding platforms charge fees for raising funds, so it’s worth factoring that into your cost of capital calculations.

Crowdfunding tends to work best for brands with an engaged community or a compelling product story. It requires marketing effort to run a successful campaign, and results aren’t guaranteed. For brands that need to move quickly on a confirmed order, it’s usually too slow. But for building new inventory ahead of a launch or retail pitch, it can be a cost-effective alternative to debt.

Bank loans

Bank loans provide small business owners with a lump sum that can be used to purchase inventory or cover general business financing needs. In some cases, the application process can take one to three months to complete, which makes them a poor fit for time-sensitive inventory needs.

Qualifying for a small business loan can be challenging for newer companies. Banks typically require collateral or a personal guarantee, along with a solid credit history, documented time in business, and proven sales. Your credit score plays a meaningful role in what rates and terms you can access. Lenders will also evaluate the value of your inventory and other assets when assessing collateral.

If you do qualify, bank loans generally offer competitive fixed interest rates with predictable monthly payments, making them one of the lower-cost inventory financing options for established businesses. For brands with strong business credit and a clear picture of their inventory needs, a term loan can be one of the most straightforward financing solutions available.

Business line of credit

A business line of credit gives you revolving access to a set amount of capital that you can draw and repay as needed. It’s typically issued by a bank or credit union and carries a lower interest rate than a credit card.

A business line of credit works well for managing recurring inventory cycles, seasonal builds, and situations where you need flexibility rather than a lump sum. If you have an $80,000 business line of credit and use $50,000 of it, you have access to the remaining $30,000 until you repay what you borrowed. Once repaid, your full limit is available again.

One advantage of a business line of credit over a term loan is that you only pay interest on what you draw, not the full limit. That makes it a more efficient financing option for businesses with variable inventory needs from month to month. Qualification requirements are similar to bank loans, and your business credit history will be a key factor in the limit and rate you’re offered. Newer businesses may find them difficult to access until they’ve built a stronger credit track record.

Personal loans

Personal loans are sometimes used by small business owners and startup entrepreneurs who haven’t yet qualified for business credit. They don’t require collateral and are generally accessible even for borrowers with a limited credit history or less-than-perfect personal credit.

The tradeoff is cost. Compared to bank loans, a business line of credit, or purpose-built funding platforms like Kickfurther, personal loans tend to carry higher interest rates. They’re best treated as a short-term bridge rather than a long-term inventory financing solution, and mixing personal credit with business finances can create complications as your business grows. If you’re relying on personal credit to fund inventory needs, it’s worth treating that as a signal to shore up your business credit profile so you can access better options over time.

What is the least costly way to finance inventory?

In most cases, a bank loan, business line of credit, or a structured platform like purchase order financing will be the most cost-effective path. If your business supplies major retailers like Walmart and you’re working from a confirmed purchase order, PO financing through a program like Bridge is often the most efficient structure because it’s purpose-built for that cash gap. Paying cash remains the cheapest option when it’s available, but most growing small businesses need outside capital to purchase new inventory without disrupting operations.

Which type of financing is most appropriate to finance the purchase of inventories?

It depends on your business model and inventory needs. If you turn inventory quickly and need ongoing flexibility, a business line of credit may be your best fit. If you have a large confirmed order from a retail partner and need to fund production, purchase order financing is often the most direct solution. If you’re an emerging brand without the credit history to qualify for traditional lending, consignment-based funding through a platform like Kickfurther can align capital with how your inventory actually sells.

How does your credit history affect your financing options?

Most traditional inventory financing options, including bank loans and business lines of credit, rely heavily on your credit score and credit history during underwriting. Strong business credit typically unlocks lower rates, higher limits, and more flexible terms. Weak or limited credit history narrows your options and raises your cost of capital.

The good news is that not every inventory financing alternative is credit-driven. Purchase order financing, for example, is underwritten primarily against the purchase order itself and the retailer’s payment history rather than your personal credit or business credit score. Consignment-based models like Kickfurther evaluate the product and sales channel more than traditional creditworthiness. Building your business credit over time remains important, but it doesn’t have to be a blocker while you’re still early.

Grow your business with Kickfurther

Kickfurther has proven to be a flexible inventory financing platform for growing small businesses. Our customers often see lower costs than what’s available elsewhere and access payment terms that offer superior flexibility. Whether you’re exploring crowdfunding, PO financing, or a traditional credit product, understanding your financing options is the first step toward choosing the right one.

The True Cost of Selling on Amazon

Posted on by Amanda Levine

How much does it cost to sell on Amazon? While you may be tired of hearing that the cost to sell on Amazon varies, it’s true. Amazon selling costs can vary depending on the price of the product, how it’s fulfilled, whether it’s advertised or not, and so on. Most seasoned Amazon sellers had to jump in and test the waters before becoming successful. With hard work and dedication, being successful on Amazon is completely achievable. For sellers that are just starting out we can help you understand the different costs you may encounter and how you can estimate them. So what does it cost to sell your product on Amazon? Let’s find out!

How much does it really cost to sell on Amazon?

Amazon provides a platform for sellers that is straightforward and convenient. However, in order to be successful selling on Amazon you should understand the ins and outs of the platform including the costs. Amazon sellers incur selling costs, referral fees, fulfillment fees, and other costs. While Amazon provides services such as FBA (Fulfillment by Amazon) that can save sellers tons of time, they do cost extra. In addition, there is plenty of competition on Amazon so you may need to invest in additional advertising to stand out. To get started on Amazon you’ll need to decide which selling plan is best for your business. Let’s take a look at some of the options and costs sellers may encounter when selling on Amazon. . .

#1. Choose a selling plan

An individual selling plan is recommended for sellers that sell fewer than 40 items per month. A professional selling plan is recommended for sellers that sell 40+ items per month. So what do the plans cost?

An individual selling plan has selling fees of $0.99 per item plus referral and variable closing fees. A professional plan has a monthly subscription fee of $39.99 plus referral and variable closing fees. The referral fee is exactly how it sounds, a referral fee paid to Amazon. Amazon referral fees are typically a percentage of the total item price. The Amazon variable closing fee usually depends on the category, it’s fixed for media products but can vary for non-media products.

#2.  Choose shipping and fulfillment options

Amazon can either handle fulfillment for sellers or sellers can handle it in house. Neither option is free so sellers should really consider the pros and cons and time investment for each option. In some cases, FBA may save sellers time and money. However, sellers will have less control over costs and branding. FBA fees can vary depending on item weight, handling fees, pick and pack, and storage costs. Sellers that use FBA store products at an Amazon warehouse which is why storage costs are included in FBA costs. For sellers that choose to use FMB (Fulfillment by Merchant) there will still be picking, packing, and shipping costs. In addition, you will need to have a place to store your items. Amazon requires sellers that use FMB to follow all Amazon seller rules including providing tracking information, replying to customers within 24 hours, and shipping products within the promised time frame. Sellers that use FBM cannot sell via Amazon Prime. Amazon also offers a hybrid option known as SFP (Seller Fulfilled Prime) which allows the seller to store, pack, and ship their own items but list them as Prime. 

#3. Choose advertising

Amazon offers advertising services. Amazon recommends that sellers begin with sponsored ads. Sponsored ads are pay-per-click and can fit into big and small budgets while producing results. Cost-per-click advertising allows sellers to set their own price i.e. how much are you willing to pay for someone to click on your product. However, sellers should keep in mind that how they manage their operations will result in how many sales they capture. As an Amazon seller you will want to occupy the buy box as often as possible. The buy box is a lesson on its own and may take time to master. We are mentioning it now to raise awareness. You may want to contact Amazon or an Amazon expert for assistance properly setting up your products and advertising. 

What percentage does Amazon take from sellers?

Amazon takes a referral fee from sellers. This is how sellers contribute to Amazon’s profits. Because well, nothing can be free. Amazon charges a variety of fees but they also offer sellers a dream land for selling products. All sellers have to manage is the product really. Once you have mastered selling on Amazon, it should be smooth sailing. However, mastering Amazon can be quite a task. Luckily, there are a variety of ways sellers can manage the fees they pay out to Amazon. As far as referral fees, they usually vary based on the category of the product. Most Amazon referral fees range from 8% to 15% of the selling price.

Is it worth it to sell on Amazon?

Selling on Amazon is worth it for most sellers. It would take a significant time and money investment to create your own website that had as much traffic as Amazon. Once you learn how to work with Amazon, selling on Amazon should be easy money. Amazon holds over 49% of the market share for all U.S. e-commerce sales since 2018. Why compete with a player that large when you can join them?

How much money do I need to start selling on Amazon?

Some sellers can get started on Amazon with a few hundred dollars while other sellers may need thousands of dollars. How much money you’ll need to start selling on Amazon depends mainly on how much your inventory will cost. Jungle Scout recently did a study on how much Amazon sellers spent to get started and how their investment relates to their success. On average, Amazon sellers reported spending $3,836 to start their Amazon business. Their findings prove that investing more money getting started on Amazon does not always equate to making more money.

Grow your business with Kickfurther

If you are planning on selling on Amazon, you may need a way to finance inventory. Inventory financing can be expensive and difficult to qualify for in some cases. If you are getting frustrated trying to find affordable inventory financing, hear us out. Kickfurther takes a unique approach to crowdfunding that is designed to provide affordable inventory financing for businesses. In addition to being up to 30% cheaper than other options, Kickfurther does not make business owners give up equity. Instead, Kickfurther allows supporters or investors to purchase inventory on consignment. To get started, small businesses can create proposals including a time frame for producing goods, a specified rate of return, and a schedule for repayment. Depending on your expected cash flow, you can set the repayment schedule between 2-10 months. Kickfurther supporters are repaid in full plus dividends. 

Wrapping Up

Amazon sellers need to ensure they have plenty of capital or alternative financing for inventory. With 800+ deals funded and a 99.5% success rate, we can help your business get the inventory financing it needs. We’ve created a community for business owners, fans, and supporters. When inventory sells, supporters get their money back. Business and supporters share a common goal with us which leverages success. 

Grow your Amazon business today with inventory financing. . . apply online today!