How Inventory Financing Benefits Your Startup Business

Posted on by Pavel

Startup business financing is in high demand – although it’s rather challenging to secure. Cash flow challenges can interfere with the growth of any business. Startups are no different except they usually have less leverage for financing. Inventory often consumes a majority of cash flow, so startups should seriously consider pursuing inventory financing as it may be easier to obtain while making a big impact. 

Inventory financing offers a solution by providing the necessary capital specifically for purchasing and managing inventory. As with other types of financing though, it can cut into the bottom line and does come along with requirements to qualify. When successful though, inventory financing for startups allows them to optimize their inventory levels, meet customer demand, and seize growth opportunities.

Kickfurther’s unique funding platform can fund your entire order(s) each time you need more inventory, so you can put your capital to work growing your business without adding debt or giving up control. Continue to maneuver your business to the top from the driver’s seat when you utilize inventory funding through Kickfurther. Before we dive into how to get started, let’s analyze how inventory financing can benefit your business. 

How inventory financing can benefit startup businesses

Supply chain issues can be troublesome for businesses of any size, but can be particularly harmful to startups. For a startup business, one of the biggest struggles can be maintaining cash flow to fund day-to-day operations, all while trying to fulfill orders as they continue to come in. 

Inventory financing can help businesses avoid supply chain and cash flow issues during busy and slow seasons, providing inventory to meet their customers’ demands. Having an adequately stocked inventory can enable your startup to fulfill orders promptly, capture sales opportunities, and potentially increase revenue. This in turn can leave your customers happy and help maintain a positive reputation for your brand. Healthy finances are important for current and future success. 

Overview of Kickfurther as an inventory financing solution for startups

 Inventory is often a startup’s largest expense and can present a major cash flow dilemma. As startups explore options they often run into options that are costly and or force them to give up equity or control – neither of which are desirable. As an entrepreneur though, you’re likely not giving up and that could be what led you here. 

At Kickfurther you can get inventory now and pay later. Our platform connects business owners to a community of buyers that can fund up to 100% of inventory. 

  1. No immediate repayments. You control repayment. Don’t pay until your product sells.
  2. Non-dilutive. Maintain equity in your business, we know how hard you worked for it. We are here to work with you, not against you. 
  3. Not a debt. Because you have enough financial strain, this is not a loan. 
  4. Upfront capital. Pay suppliers faster with upfront capital, there when you need it. 

The Challenges of Startup Inventory Management

For startups, inventory management can present various challenges. First and foremost, managing inventory comes with associated costs such as purchasing, storage, handling, and insurance expenses. Startups may have limited financial resources, making it challenging to maintain adequate inventory levels. The risk of overstocking or understocking inventory can lead to financial loss, inefficiencies, and missed sales opportunities. 

Next, startups also often struggle with cash flow issues, particularly in the early stage of operations. Trying to fulfill incoming orders with your business’s working capital can impact your ability to cover operational expenses and hinder the growth of your business. Utilizing inventory funding from Kickfurther can help you avoid stockouts, delays in fulfilling orders, and potential damage to your business’s reputation. 

Lastly, a common issue startups can face is difficulty securing traditional financing for inventory. As a newer business, your startup may not have the financial history to secure financing from traditional lenders, such as bank loans or lines of credit. Due to the lack of collateral and limited operating history, traditional lenders may see your startup business as a higher risk. 

How inventory financing can help startup businesses

Inventory financing can provide your startup with the flexibility to manage inventory needs effectively. Covering your largest expense (inventory), you can adjust inventory levels based on both market demand and seasonal fluctuations. Plus, you can keep cash available to cover routine and non-routine operating expenses. By getting inventory as you need it, you can meet customer needs and ensure adequate inventory levels, all without straining working capital. 

What does this lead to? Increased revenue potential. With inventory financing, you can maintain a well-stocked inventory, fulfill customer orders promptly, and capture sales opportunities. This ability to meet customer demand promptly can enhance customer satisfaction and loyalty, resulting in potential repeat orders. 

Perhaps most important for a new and growing business, is the improved cash flow management that comes from utilizing inventory financing. Rather than tying up capital in inventory purchases, startups can use inventory financing to free up their working capital for other operational expenses, such as marketing, hiring new employees, or expanding product lines. Focusing your capital on things other than inventory can allow your startup to maintain a healthy financial position and seize growth opportunities as they present themselves. 

With inventory financing, startups can also compete more effectively in the market. Inventory financing gives startups the ability to respond quickly to customer demands, capitalize on market trends, and stay ahead of competitors. This agility in inventory management can give your startup the advantage it needs to meet customer needs promptly and efficiently. 

Why choose  Kickfurther for Inventory Financing

Here are just a few examples of the 800+ businesses that have had success utilizing inventory funding from Kickfurther: 

  • Beast Grooming & Personal Care Products: Before raising $1.6 million on Kickfurther, they often experienced stockouts, limited capital from other funding options, and limited growth due to inventory levels. After taking advantage of inventory financing from Kickfurther, they saw a 100% sales increase year over year and were able to quadruple available inventory to meet rising e-commerce demand.  
  • Spongelle: Before Kickfurther, they faced unexpectedly fast growth across channels, which created difficulty in producing adequate inventory. After raising over $1 million on Kickfurther, they were able to fund large orders caused by spikes in sales and accept new orders without concern for working capital. 
  • BigStock, Inc.: Facing cash pinches between ordering items and payments from retailers, after raising over $1 million on Kickfurther, they were able to meet increased demand with sufficient inventory. This increase in inventory led to increased sales and “exponential” growth. 

With no immediate repayments, you don’t pay us back until your new inventory order begins to sell. This allows you to set your repayment schedule based on what your cash flow allows. By funding your order(s) each time you need more inventory, Kickfurther can free up the working capital you need to grow your business. 

Closing thoughts

Startups face a variety of challenges as a new business, but funding inventory shouldn’t be one of them. With inventory financing, you can ensure you meet customer demand and free up the working capital you need to maintain daily operations. Alleviating this cash flow pinch can free up the capital you need to invest in marketing, expanding product lines, or other areas you feel will best benefit your business. 

If you are a startup in search of small business inventory financing, make sure you start your search with Kickfurther. With a proven track record of helping entrepreneurs grow their businesses, we are dedicated to helping you do the same. 

Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:

#1. Create a free business account

#2. Complete the online application 

#3. Review a potential deal with one of our account reps & get funded in minutes

What is Invoice Factoring and How Does It Work?

Posted on by Pavel

Acquiring funding so your business can facilitate growth can be a challenging task. Inadequate funding may limit your ability to realize growth expansion goals such as expanding your product line, implementing marketing campaigns, or hiring additional employees. Invoice factoring is a useful tool that can improve your business’s cash flow. so you can accomplish your goals. 

Kickfurther is an innovative inventory financing platform that offers businesses an alternative way to access funding when conventional sources are unavailable. It connects businesses with third-party partners to provide the necessary funds to manage their inventory.

By linking brands to a network of buyers who are eager to contribute funds for inventory, we offer business owners the freedom to reimburse the borrowed amount as they receive cash from their sales.

With higher funding limits,  Kickfurther allows you to sell new inventory before paying for it. You can retain control and choose flexible payment options while receiving up to 100% of the funds you need. This eases the cash flow pinch so your business can scale quickly allowing for financial flexibility to expand your inventory.

What is invoice factoring?

Invoice factoring involves selling your accounts receivable at a discount to a third party, which retains a percentage of the original invoice amount. The decision to provide you with invoice factoring is based on your accounts receivable values and invoices. You select which invoices to include in the factoring process. The factoring company then collects payment on your invoices from your customers. This is a faster way to get working capital than waiting for loan approval from a bank. 

  • How does invoice factoring work?

    Invoice factoring can provide fast, needed capital to cover a gap due to slow-paying customers. Invoice factoring is unsecured credit so it doesn’t require collateral It is better for B2B customers instead of those who sell or work directly with consumers.
    Factoring solves cash flow obstacles during slow periods, especially for businesses with slow-paying customers and limited resources. 

 

  • Benefits of Invoice Factoring
  1. Improved Cash Flow: Invoice factoring offers a quick and effective solution for business owners to access fast cash, which can help ease financial limitations and provide funding for day-to-day operations, like paying suppliers, employees, and other expenses.
  2. No Debt Incurred: Invoice factoring differs from traditional loans because it is not a loan, and does not create any debt on the balance sheet. Instead, it is a sale of accounts receivable, which allows a business to get needed capital without accruing extra debt. Banks can provide loans but the process is often more time-consuming and cumbersome. 
  3. No Collateral Required: Businesses can get the funding they need without having to put up any assets as security because invoice factoring does not require collateral.
  4. Flexibility: Invoice factoring is a flexible financing option that can be customized to meet the specific needs of each business. Business owners choose which invoices to factor in, which means they control the amount of funding they receive and when they receive it.
  5. Improved Credit: Invoice factoring can help businesses improve their credit by providing them with a reliable source of cash flow. This helps business owners pay their bills on time, improves their credit rating, and makes it easier to access future financing.
  6. Time-Saving: Invoice factoring saves businesses time and resources by outsourcing accounts receivable to a  factoring company. This frees up time for businesses to focus on other areas of their business that need attention.
  7. Easy Qualifications: Invoice factoring usually involves a quicker and easier process than a traditional bank loan. Your clients need to meet specific qualifications but your requirements are often minimal. 
  • Invoice Factoring vs. Inventory Financing

Instead of selling your invoices to a factoring company, inventory financing uses your inventory as collateral to get a cash advance. The business owner is responsible for collecting payment on the invoices. 

Inventory financing is a way to handle delayed payments from customers and access immediate cash, avoiding cash flow problems. Companies and startups seeking a faster route may also prefer to avoid the traditional loan process. 

While invoice factoring may cost more than other types of financing, some business owners prefer the assurance factoring provides when they want to get funding quickly. Invoice financing usually has a lower fee than invoice factoring. 

Companies with limited funds often need to make short-term decisions that could restrict their options or opportunities. Both small business inventory financing and invoice factoring provide cash flow solutions to overcome financial constraints.

By using both inventory financing and invoice factoring simultaneously, a business can access funds at different stages of the cash flow cycle.  They can use invoice factoring to obtain funds when they need to pay their suppliers and subsequently use inventory financing to buy more inventory and meet other expenses. Using both will ensure the business has the necessary capital to operate and grow. 

  • How to Leverage  Invoice Factoring for Cash Flow Management

If your business is experiencing a cash flow crunch then invoice factoring may be one way to fill a short-term gap in funding. Factoring involves selling the value of your outstanding invoices to a third-party company before your customers pay them. By doing this, you will generate immediate cash instead of having to wait until your customers pay you. The factoring company also manages all collections,

Leveraging Inventory Financing in Conjunction with Invoice Factoring

Combining inventory financing and inventory factoring can be a winning strategy. for a business that is struggling to generate cash flow and purchase inventory. A recommended approach is to combine inventory financing and inventory factoring to optimize the benefits of both. This approach can help businesses acquire the funding required to purchase inventory, meet customer demand, enhance production capacity, and facilitate long-term expansion.

Inventory financing provides businesses with the funding they need to purchase inventory. It can assist businesses in meeting customer demand, increasing their production capacity, and achieving sustainable long-term growth by providing them with the necessary funding to purchase inventory. This type of financing can be beneficial for businesses that need to purchase inventory but don’t have the cash on hand to do so. It is a form of asset-based lending that uses the inventory as collateral for the loan. When a business secures inventory financing, it can use the funds to purchase inventory from its suppliers. 

Tips for Choosing the Right Invoice Factoring Company

  • Find a reputable and experienced factoring company.
  • Check the company’s ratings and reviews on websites and forums. 
  • Make sure the company specializes in your industry or business type.
  • Ask for references and contact them. 
  • Understand associated fees and make sure the company is transparent and reasonable. 
  • Consider the factoring company’s flexibility and willingness to work with your specific needs. 
  • Select a factoring company that uses modern technology and tools to manage your account and save time.
  • Ensure the factoring company has a smooth, simple application process and funding timeline.

How Kickfurther can help

Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.

Why Kickfurther?

No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.

Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.

Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.

Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.

Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. By funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.

Closing thoughts

By combining inventory financing and invoice factoring, businesses can get the best of both worlds. They can use inventory financing to purchase inventory and then use inventory factoring to get cash quickly to pay for that inventory. This can help businesses improve their cash flow, boost their production capacity, and ultimately grow and expand their operations.

Whether you are considering invoice factoring inventory financing or both, It’s wise to evaluate which financial product is best for your business needs. Explore our Kickfurther website for more information about how we can help you find the funding you need. 

5 Tips to Manage Black Friday Inventory

Posted on by Pavel

Business owners can prepare for Black Friday with effective inventory management and inventory financing from Kickfurther. We provide access to capital while reducing risk and ensuring businesses are well prepared for Black Friday and continued growth.

Preparing for Black Friday

Retailers should prepare for Black Friday by implementing a comprehensive inventory management strategy. Here are steps and best practices for retailers to follow when it comes to inventory preparation:

  • Demand Forecasting: Analyze historical sales data and market trends to forecast demand for specific products during Black Friday. Consider using advanced analytics and AI-driven forecasting tools for more accurate predictions.
  • Assortment Planning: Determine which products will be part of your Black Friday inventory. Focus on high-demand items and consider offering exclusive deals on some products to attract customers.
  • Safety Stock: Maintain a safety stock of popular items to prevent stockouts in case demand exceeds expectations. This buffer helps ensure that you can meet customer demand during the event.
  • Supplier and Vendor Coordination: Communicate with suppliers and vendors well in advance to secure a steady supply of products. Ensure that deliveries are scheduled to align with your inventory needs.
  • Inventory Allocation: Decide how to allocate inventory among different sales channels, such as physical stores, e-commerce websites, and mobile apps. Ensure that products are available where your customers want to shop.
  • Promotions and Bundles: Plan promotional offers, discounts, and product bundles to entice customers. Allocate inventory specifically for these promotions and communicate them clearly to customers.
  • Inventory Management Software: Invest in inventory management software and point-of-sale systems that can provide real-time visibility into inventory levels. This technology helps track sales, manage stock, and generate reports to inform decision-making.
  • Order Fulfillment: Optimize order fulfillment processes to handle a surge in orders efficiently. This includes having sufficient staff for packing and shipping and partnering with reliable logistics providers.
  • Returns and Exchanges: Prepare for handling returns and exchanges, as these are common after the holiday shopping rush. Have clear return policies and procedures in place.
  • Inventory Audits: Conduct regular inventory audits to track stock levels, identify discrepancies, and ensure inventory accuracy.
  • Staff Training: Train your employees to manage inventory effectively, especially during peak shopping hours on Black Friday. They should be knowledgeable about your products and inventory systems.
  • Supply Chain Efficiency: Streamline your supply chain processes, from procurement to distribution, to reduce lead times and ensure that products are available when needed.
  • Customer Communication: Keep customers informed about your Black Friday deals and promotions well in advance. Clear communication can help manage customer expectations and reduce the likelihood of disappointment.
  • Peak Load Planning: Anticipate the surge in traffic and sales on Black Friday and have a plan in place to manage high volumes of in-store and online shoppers.
  • Post-Event Analysis: After Black Friday, conduct a thorough analysis of your inventory performance. Evaluate what worked well and what needs improvement to inform future inventory management strategies.
  • Analyze historical sales data: By reviewing past Black Friday sales figures and patterns, retailers can make informed predictions about which products will be in high demand and adjust their inventory accordingly.
  • Set realistic inventory goals: Establishing achievable stock targets helps retailers avoid overstocking or understocking issues, ensuring they have enough products to meet customer demand without excess inventory.
  • Work with suppliers early: Early communication with suppliers is crucial to secure the necessary inventory and ensure on-time deliveries, preventing shortages during the Black Friday rush.
  • Use inventory management software: Implementing inventory management software streamlines tracking and control of stock levels, making it easier to monitor inventory in real time and respond to changing demands.
  • Consider the impact of promotions and discounts: Retailers should assess how sales promotions and discounts may affect inventory turnover and plan accordingly to prevent stockouts or surplus inventory.

By following these steps and best practices, retailers can better prepare for Black Friday management of inventory, reduce the risk of stockouts, optimize sales, and provide a positive shopping experience for customers during this critical shopping event.

What is Black Friday inventory management planning?

Black Friday inventory management planning refers to the process of preparing and optimizing a retailer’s inventory and supply chain operations in anticipation of the Black Friday shopping event, which occurs on the day after Thanksgiving in the United States and has become synonymous with major sales and discounts. Effective inventory management is crucial for retailers to meet customer demand, maximize sales, minimize stockouts, and ensure a smooth shopping experience during this busy period.

Key components of Black Friday inventory management planning include:

  • Demand Forecasting: Retailers analyze historical sales data, market trends, and consumer behavior to forecast the expected demand for specific products during the Black Friday sale. Accurate forecasting helps in determining how much inventory to stock.
  • Inventory Optimization: Retailers need to strike a balance between having enough inventory to meet demand and avoiding overstocking, which can lead to excess costs. Inventory optimization tools and software help determine the right stock levels for each product.
  • Supplier and Vendor Coordination: Retailers communicate with their suppliers and vendors to ensure a steady supply of products leading up to and during the Black Friday event. Timely deliveries are crucial to maintaining sufficient stock.
  • Safety Stock: Retailers often maintain a safety stock of high-demand items to prevent stockouts in case demand exceeds expectations. This buffer helps avoid disappointed customers.
  • Inventory Allocation: Retailers decide how to allocate their inventory among different sales channels, such as physical stores, e-commerce websites, and mobile apps. Effective allocation ensures that products are available where customers want to shop.
  • Promotions and Bundles: Retailers plan promotional offers and product bundles to attract customers. Inventory planning includes setting aside stock for these special deals.
  • Supply Chain Efficiency: Retailers work to streamline their supply chain processes, from procurement to distribution, to reduce lead times and ensure that products are available when needed.
  • Technology and Software: Inventory management software and point-of-sale systems play a critical role in tracking inventory levels, monitoring sales in real time, and generating reports to make informed decisions.
  • Staff Training: Retail employees are trained to manage inventory efficiently, especially during peak shopping hours on Black Friday.
  • Returns and Exchanges: Retailers plan to handle returns and exchanges, as these are common after the holiday shopping rush.

Top 5 Tips to Manage Black Friday Inventory

  1. Analyze historical sales data: By reviewing past Black Friday sales figures and patterns, retailers can make informed predictions about which products will be in high demand and adjust their inventory accordingly.
  2. Set realistic inventory goals: Establishing achievable stock targets helps retailers avoid overstocking or understocking issues, ensuring they have enough products to meet customer demand without excess inventory.
  3. Work with suppliers early: Early communication with suppliers is crucial to secure the necessary inventory and ensure on-time deliveries, preventing shortages during the Black Friday rush.
  4. Use inventory management software:  Implementing inventory management software streamlines tracking and control of stock levels, making it easier to monitor inventory in real time and respond to changing demands.
  5. Consider the impact of promotions and discounts: Retailers should assess how sales promotions and discounts may affect inventory turnover and plan accordingly to prevent stockouts or surplus inventory.

Closing thoughts

Effective Black Friday inventory management planning is essential for retailers to make the most of this high-demand shopping event. Retailers should leverage historical sales data and demand forecasting to ensure they have the right products in stock. Setting realistic inventory goals and collaborating with suppliers early are key steps in avoiding stockouts or overstocking. Inventory management software provides real-time visibility and control while considering the effects of promotions and discounts to help maintain a healthy inventory balance. Efficient supply chain processes and staff training help retailers optimize their inventory and create a positive shopping experience for customers on Black Friday.

How Kickfurther can help

Kickfurther is an inventory financing platform that allows businesses to raise capital by pre-selling their inventory to a network of backers. This can help with Black Friday planning and inventory management in several ways:

  • Capital Injection: Kickfurther provides businesses with a source of capital to finance their inventory purchases for Black Friday. This injection of funds ensures that businesses have the financial resources needed to stock up on inventory well in advance of the sales event.
  • Risk Mitigation: By pre-selling inventory to backers on the Kickfurther platform, businesses can reduce the financial risk of holding excess inventory. This is particularly important for Black Friday, as overstocked items can lead to significant carrying costs.
  • Larger Inventory Orders: With the additional funding from Kickfurther, businesses can afford to place larger orders with suppliers. This allows them to take advantage of bulk purchase discounts and ensures that they have ample stock to meet the high demand on Black Friday.
  • Meeting Customer Demand: Black Friday is a time when customers expect to find the products they want in stock and ready for purchase. Kickfurther financing helps businesses avoid stockouts by providing the necessary capital to maintain adequate inventory levels.
  • Diversifying Product Offerings: Businesses can use Kickfurther financing to diversify their product offerings for Black Friday. They can introduce new products, expand product lines, or offer a wider range of choices to attract a broader customer base.
  • Seasonal Sales Planning: Kickfurther financing can be tailored to specific sales seasons, such as Black Friday. This ensures that businesses have access to funds when they need them most and allows for efficient planning and execution of sales strategies.
  • Reducing Cash Flow Constraints: Many businesses experience cash flow constraints when preparing for Black Friday. Kickfurther’s funding model provides relief by offering upfront capital without the need for immediate repayment, allowing businesses to allocate resources more efficiently.
  • Cost Savings: Kickfurther can help businesses negotiate better terms with suppliers and manufacturers, as they can place larger orders and make more favorable payment arrangements. This can lead to cost savings on inventory purchases.
  • Flexibility: The Kickfurther platform offers flexibility in terms of financing options, repayment terms, and funding amounts. This adaptability allows businesses to tailor their financing to their unique needs and Black Friday goals.
  • Business Growth: Beyond Black Friday, Kickfurther financing can contribute to the overall growth and sustainability of a business. It enables businesses to seize opportunities, expand operations, and consistently meet customer demand, leading to long-term success.

Inventory funding can be a valuable resource for retailers in their Black Friday planning and inventory management efforts.  It provides access to capital, reduces risk, and offers flexibility to optimize inventory management, ensuring that businesses are well-prepared for this critical sales event and positioned for continued growth.

Why Kickfurther? 

  • No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.
  • Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.
  • Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.
  • Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.

Kickfurther puts you in control of your business while delivering the costliest asset for most brands. By funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.

By monitoring and analyzing inventory sales ratio and accessing Kickfurther inventory financing, businesses can make informed decisions to improve efficiency, reduce costs, enhance cash flow, and stay competitive in their industries.

If you’re considering  getting funded at Kickfurther, here are the easy steps to get started:

  • Create a free business account
  • Complete the online application 
  • Review a potential deal with one of our account reps to get funded in minutes

Exploring Local vs. Global Suppliers

Posted on by Pavel

Local sourcing involves obtaining goods or services from nearby suppliers, supporting local economies, and promoting sustainability. Global sourcing seeks suppliers from different countries for cost efficiencies and diverse markets. Kickfurther’s inventory financing helps businesses fund their inventory needs, whether sourcing locally or globally, promoting sustainability in the process. 

What is local sourcing?

Local sourcing involves obtaining goods or services from suppliers close to the consumer. It supports local economies, reduces emissions and costs from transportation, promotes sustainability, and fosters closer consumer-producer relationships.  It can apply to various industries, including agriculture, manufacturing, retail, and hospitality, and is a key element in sustainable and community-driven business practices.

Pros of local sourcing

Local sourcing offers several advantages, making it an attractive practice for businesses and communities:

  • Support for Local Economy: Purchasing goods and services from local suppliers helps stimulate the local economy by keeping money within the community. It supports small businesses and creates job opportunities, contributing to the overall economic growth and stability.
  • Reduced Environmental Impact: Local sourcing reduces the need for long-distance transportation of goods, leading to lower carbon emissions and a smaller environmental footprint. This can help combat climate change and promote sustainability.
  • Fresher and Higher Quality Products: When goods are sourced locally, they can be delivered to consumers more quickly and efficiently, ensuring fresher and higher quality products. This is especially important for perishable items like produce and food products.
  • Improved Traceability and Transparency: Local sourcing allows businesses and consumers to have better visibility into the supply chain, ensuring greater transparency and traceability of products. This builds trust and confidence in the sourcing process.
  • Strengthened Community Ties: Supporting local producers and businesses fosters a sense of community and strengthens local ties. It creates a positive impact on the social fabric, as businesses and consumers develop closer relationships.
  • Flexibility and Customization: Local suppliers often offer more flexibility and customization options to meet the specific needs of businesses or consumers. This can lead to tailored products and services that cater to local preferences and demands.
  • Resilience and Security: Relying on local sources for essential goods can enhance resilience and security during times of disruption, such as natural disasters or global supply chain disruptions.
  • Cultural Preservation: Local sourcing can help preserve and promote local traditions, craftsmanship, and cultural heritage by supporting artisans and traditional producers.
  • Reduced Packaging and Waste: By sourcing locally, businesses may reduce the need for excessive packaging and waste associated with long-distance transportation, contributing to waste reduction and more sustainable practices.
  • Positive Brand Image: Embracing local sourcing aligns with sustainability and responsible business practices, enhancing a company’s brand image and reputation as a socially and environmentally conscious entity.
  • Overall, local sourcing is a strategy that benefits businesses, consumers, and communities alike, creating a win-win situation by promoting economic growth, environmental responsibility, and social cohesion.

Cons of local sourcing

While local sourcing offers many benefits, it also comes with some challenges and drawbacks:

  • Limited Product Variety: Local suppliers may have limited capacity or specialization, leading to reduced product variety compared to global sourcing. Businesses may struggle to find certain niche products or materials locally.
  • Potentially Higher Costs: Local products may sometimes be more expensive due to factors such as smaller-scale production, higher labor costs, or regional pricing variations. This can impact a business’s bottom line and consumer pricing.
  • Seasonal Constraints: Local sourcing of agricultural products can be affected by seasonal fluctuations. During off-seasons, businesses may face challenges in maintaining a consistent supply of certain goods.
  • Quality and Standards Variability: Local suppliers may not always adhere to the same quality standards or certifications as global suppliers. Ensuring consistent product quality and compliance can be more challenging.
  • Limited Scale and Volume: Some local suppliers may have limited production capacities, making it challenging for businesses with large-scale operations or global reach to rely solely on local sourcing.
  • Supply Chain Vulnerability: Relying heavily on local suppliers can create a single point of failure in the supply chain. Local disruptions, such as natural disasters or labor shortages, can significantly impact business operations.
  • Global Market Access: Depending solely on local sourcing may limit a business’s access to global markets and diverse customer bases. Expanding internationally can be more challenging without access to global supply chains.
  • Market Competition: Local sourcing may lead to increased competition among businesses for limited local resources, potentially driving up costs and reducing availability.
  • Initial Investment and Infrastructure: Transitioning to local sourcing may require initial investments in infrastructure and logistics to ensure efficient supply chain management.
  • Ethical Considerations: While local sourcing can reduce carbon emissions, it may inadvertently promote unethical labor practices or poor working conditions if not carefully monitored and regulated.
  • Trade and Economic Implications: An exclusive focus on local sourcing could have trade implications and limit opportunities for international cooperation and economic growth.
  • To address challenges, businesses can adopt a hybrid approach, combining local and global sourcing for cost-effectiveness, sustainability, and product diversity. Thorough supplier evaluation, monitoring, and transparent communication with stakeholders are crucial for local sourcing success.

What is global sourcing?

Global sourcing refers to businesses obtaining goods, services, or raw materials from suppliers in different countries or regions to benefit from cost efficiencies, expertise, resources, and diverse markets. It optimizes supply chains, enhances competitiveness, and expands global reach. Advancements in transportation, communication, and trade have made global sourcing more prevalent, facilitating connections with suppliers worldwide.

Pros of global sourcing

Overall, global sourcing offers numerous advantages for businesses looking to optimize their supply chain, reduce costs, access new markets, and enhance their competitiveness in the global arena. However, it is essential to carefully manage challenges such as logistical complexities, cultural differences, and potential risks to maximize the benefits of this sourcing strategy.

The pros of global sourcing include:

  • Cost Efficiency: One of the primary benefits of global sourcing is cost savings. Businesses can often find suppliers in countries with lower production costs, allowing them to access more affordable labor, materials, and resources. This cost advantage can lead to increased profitability and competitiveness in the global market.
  • Access to Specialized Expertise: Global sourcing allows businesses to tap into the expertise and skills of suppliers in different regions who may have unique knowledge or technology not available domestically. This access to specialized capabilities can lead to improved product quality and innovation.
  • Diverse Supplier Options: With global sourcing, businesses have a broader range of supplier options to choose from, giving them the flexibility to find the best partners for their specific needs. It enables them to explore different markets and identify suppliers who can provide high-quality products and services at competitive prices.
  • Scalability and Capacity: Global sourcing provides opportunities for businesses to scale their operations and increase production capacity. Suppliers in different countries can handle larger orders, enabling businesses to meet growing demand and expand their market presence.
  • Risk Mitigation: Diversifying suppliers across multiple countries reduce the risk of supply chain disruptions due to natural disasters, geopolitical issues, or other unforeseen events in a specific region. Having a global supplier network can enhance resilience and business continuity.
  • Access to New Markets: By sourcing globally, businesses can also gain entry into new international markets. Establishing relationships with suppliers in different countries opens doors to potential customers and business opportunities in those regions.
  • Extended Operating Hours: Working with suppliers in different time zones can provide extended operating hours, enabling faster turnaround times and more efficient production processes. This can be advantageous for businesses with global customers and tight delivery timelines.
  • Corporate Social Responsibility (CSR): Global sourcing allows businesses to demonstrate CSR by engaging with suppliers who adhere to ethical and sustainable practices. It can promote responsible sourcing, fair labor practices, and environmentally friendly production methods.

Cons of global sourcing

The cons of global sourcing include:

  • Logistics and Transportation Costs: Managing a global supply chain involves significant logistical challenges and transportation costs. Shipping products across long distances can result in higher expenses and longer lead times, potentially affecting inventory management and overall production timelines.
  • Quality Control and Communication Issues: Ensuring consistent product quality can be challenging when working with suppliers from different countries. Language barriers and cultural differences may lead to miscommunication, impacting the manufacturing process and final product quality.
  • Currency Fluctuations and Financial Risks: Dealing with suppliers in multiple countries exposes businesses to currency fluctuations, which can affect costs and profits. Sudden changes in exchange rates can create financial risks and impact the competitiveness of products.
  • Supply Chain Disruptions: Reliance on distant suppliers can make the supply chain more vulnerable to disruptions caused by geopolitical events, natural disasters, or global crises. These disruptions can lead to delays in production and delivery, affecting customer satisfaction and revenue.
  • Intellectual Property and Data Security Concerns: Working with international suppliers raises concerns about protecting intellectual property and sensitive data. Different countries may have varying levels of intellectual property rights enforcement and data security regulations, potentially putting businesses at risk of theft or unauthorized use of proprietary information.
  • Social and Ethical Issues: Global sourcing can raise ethical concerns related to labor practices, worker rights, and environmental standards in some countries. Businesses may face reputational risks if their suppliers are found to engage in unethical practices.
  • Compliance and Regulatory Challenges: Different countries have varying regulations and compliance requirements related to trade, product standards, and labeling. Navigating these complex regulations can be time-consuming and costly for businesses.
  • Dependency on Global Suppliers: Relying heavily on global suppliers can create a dependency that may limit a business’s ability to pivot or respond quickly to changing market conditions or customer demands.
  • Long Lead Times: Distance and time zones can lead to longer lead times, impacting inventory management and the ability to respond rapidly to changes in demand.
  • Cultural and Time Zone Differences: Cultural differences and varying time zones can lead to challenges in communication and collaboration, potentially affecting business relationships and decision-making processes.
  • Businesses considering global sourcing must carefully assess these challenges and risks to develop strategies to mitigate them effectively. Implementing robust supply chain management practices, fostering strong supplier relationships, and staying informed about international regulations are essential steps to ensure the success of global sourcing initiatives.

How Kickfurther Can Help

Kickfurther can play a valuable role in assisting businesses with both local and global suppliers by offering a collaborative approach to inventory financing. Here’s how Kickfurther can help in each scenario:

Local Suppliers:

For businesses working with local suppliers, Kickfurther’s platform can provide a reliable source of financing for inventory needs. By presenting their inventory needs on the platform, businesses can attract a community of buyers who are interested in supporting local businesses and sustainable initiatives. 

Global Suppliers:

When dealing with global suppliers, businesses may face additional challenges, such as currency fluctuations, logistics, and potential supply chain disruptions. Kickfurther’s platform can still be beneficial. By securing inventory financing through Kickfurther, businesses can have the financial flexibility to navigate these challenges effectively. The platform’s community of backers provides a diverse source of funding, which can help mitigate financial risks associated with global sourcing. Additionally, the collaborative nature of Kickfurther fosters transparency and communication between businesses and buyers, allowing businesses to demonstrate their commitment to responsible and ethical practices, which can be especially important when dealing with global suppliers in various countries.

Closing thoughts

Kickfurther’s inventory financing and e-commerce inventory financing models are a valuable resource for businesses, whether they work with local or global suppliers. Kickfurther provides a unique funding solution that aligns with sustainable and responsible business practices, empowering businesses to secure the inventory they need while engaging a community of buyers who share their values and support their growth.

What is Invoice Factoring and How Does It Work?

Posted on by Pavel

Acquiring funding so your business can facilitate growth can be a challenging task. Inadequate funding may limit your ability to realize growth expansion goals such as expanding your product line, implementing marketing campaigns, or hiring additional employees. Invoice factoring is a useful tool that can improve your business’s cash flow. so you can accomplish your goals. 

Kickfurther is an innovative inventory financing platform that offers businesses an alternative way to access funding when conventional sources are unavailable. It connects businesses with third-party partners to provide the necessary funds to manage their inventory.

By linking brands to a network of buyers who are eager to contribute funds for inventory, we offer business owners the freedom to reimburse the borrowed amount as they receive cash from their sales.

With higher funding limits,  Kickfurther allows you to sell new inventory before paying for it. You can retain control and choose flexible payment options while receiving up to 100% of the funds you need. This eases the cash flow pinch so your business can scale quickly allowing for financial flexibility to expand your inventory.

What is invoice factoring?

Invoice factoring involves selling your accounts receivable at a discount to a third party, which retains a percentage of the original invoice amount. The decision to provide you with invoice factoring is based on your accounts receivable values and invoices. You select which invoices to include in the factoring process. The factoring company then collects payment on your invoices from your customers. This is a faster way to get working capital than waiting for loan approval from a bank. 

How does invoice factoring work?

Invoice factoring can provide fast, needed capital to cover a gap due to slow-paying customers. Invoice factoring is unsecured credit so it doesn’t require collateral It is better for B2B customers instead of those who sell or work directly with consumers.
Factoring solves cash flow obstacles during slow periods, especially for businesses with slow-paying customers and limited resources. 

Benefits of Invoice Factoring

Several benefits of invoice factoring include:

  1. Improved Cash Flow: Invoice factoring offers a quick and effective solution for business owners to access fast cash, which can help ease financial limitations and provide funding for day-to-day operations, like paying suppliers, employees, and other expenses.
  2. No Debt Incurred: Invoice factoring differs from traditional loans because it is not a loan, and does not create any debt on the balance sheet. Instead, it is a sale of accounts receivable, which allows a business to get needed capital without accruing extra debt. Banks can provide loans but the process is often more time-consuming and cumbersome. 
  3. No Collateral Required: Businesses can get the funding they need without having to put up any assets as security because invoice factoring does not require collateral.
  4. Flexibility: Invoice factoring is a flexible financing option that can be customized to meet the specific needs of each business. Business owners choose which invoices to factor in, which means they control the amount of funding they receive and when they receive it.
  5. Improved Credit: Invoice factoring can help businesses improve their credit by providing them with a reliable source of cash flow. This helps business owners pay their bills on time, improves their credit rating, and makes it easier to access future financing.
  6. Time-Saving: Invoice factoring saves businesses time and resources by outsourcing accounts receivable to a  factoring company. This frees up time for businesses to focus on other areas of their business that need attention.
    Easy Qualifications: Invoice factoring usually involves a quicker and easier process than a traditional bank loan. Your clients need to meet specific qualifications but your requirements are often minimal.

Invoice Factoring vs. Inventory Financing

Instead of selling your invoices to a factoring company, inventory financing uses your inventory as collateral to get a cash advance. The business owner is responsible for collecting payment on the invoices. 

Inventory financing is a way to handle delayed payments from customers and access immediate cash, avoiding cash flow problems. Companies and startups seeking a faster route may also prefer to avoid the traditional loan process. 

While invoice factoring may cost more than other types of financing, some business owners prefer the assurance factoring provides when they want to get funding quickly. Invoice financing usually has a lower fee than invoice factoring. 

Companies with limited funds often need to make short-term decisions that could restrict their options or opportunities. Both small business inventory financing and invoice factoring provide cash flow solutions to overcome financial constraints.

By using both inventory financing and invoice factoring simultaneously, a business can access funds at different stages of the cash flow cycle.  They can use invoice factoring to obtain funds when they need to pay their suppliers and subsequently use inventory financing to buy more inventory and meet other expenses. Using both will ensure the business has the necessary capital to operate and grow. 

How to Leverage  Invoice Factoring for Cash Flow Management

If your business is experiencing a cash flow crunch then invoice factoring may be one way to fill a short-term gap in funding. Factoring involves selling the value of your outstanding invoices to a third-party company before your customers pay them. By doing this, you will generate immediate cash instead of having to wait until your customers pay you. The factoring company also manages all collections,

Leveraging Inventory Financing in Conjunction with Invoice Factoring

Combining inventory financing and inventory factoring can be a winning strategy. for a business that is struggling to generate cash flow and purchase inventory. A recommended approach is to combine inventory financing and inventory factoring to optimize the benefits of both. This approach can help businesses acquire the funding required to purchase inventory, meet customer demand, enhance production capacity, and facilitate long-term expansion.

Inventory financing provides businesses with the funding they need to purchase inventory. It can assist businesses in meeting customer demand, increasing their production capacity, and achieving sustainable long-term growth by providing them with the necessary funding to purchase inventory. This type of financing can be beneficial for businesses that need to purchase inventory but don’t have the cash on hand to do so. It is a form of asset-based lending that uses the inventory as collateral for the loan. When a business secures inventory financing, it can use the funds to purchase inventory from its suppliers. 

Tips for Choosing the Right Invoice Factoring Company

  • Find a reputable and experienced factoring company.
  • Check the company’s ratings and reviews on websites and forums. 
  • Make sure the company specializes in your industry or business type.
  • Ask for references and contact them. 
  • Understand associated fees and make sure the company is transparent and reasonable. 
  • Consider the factoring company’s flexibility and willingness to work with your specific needs. 
  • Select a factoring company that uses modern technology and tools to manage your account and save time.
  • Ensure the factoring company has a smooth, simple application process and funding timeline.

How Kickfurther can help

Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.

Why Kickfurther?

  • No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.
  • Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.
  • Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.
  • Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.
  • Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. By funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.

Closing thoughts

By combining inventory financing and invoice factoring, businesses can get the best of both worlds. They can use inventory financing to purchase inventory and then use inventory factoring to get cash quickly to pay for that inventory. This can help businesses improve their cash flow, boost their production capacity, and ultimately grow and expand their operations.

Whether you are considering invoice factoring, inventory financing, or both, It’s wise to evaluate which financial product is best for your business needs. Explore our Kickfurther website for more information about how we can help you find the funding you need. 

Shopify Capital vs. Kickfurther: What’s the Difference?

Posted on by Pavel

Shopify Capital and Kickfurther are both online platforms that aim to provide funding for eCommerce businesses, each with its own benefits. 

Offered by the eCommerce platform Shopify, Shopify Capital provides funding to certain eligible sellers and takes repayment from daily sales on the platform. Shopify Capital is an extension of Shopify eCommerce specifically to help sellers get funding. Shopify is most well-known as being an eCommerce platform for buying and selling products. 

Kickfurther, on the other hand, is a more sophisticated platform that helps sellers get funding for inventory – regardless of the platform they sell on. Up to 30% cheaper than other options, Kickfurther is committed to the success of our entrepreneur heroes. 

While Shopify Capital is limited only to sellers on Shopify, Kickfurther and Shopify Capital can both free up the working capital needed to grow your business.

Interested in obtaining funding from Shopify Capital or Kickfurther? Here’s what you should know.

Overview: Kickfurther Vs. Shopify Capital

Shopify is one of the leading e-commerce platforms in the world, servicing over 4 million businesses and reaching a consumer base of over 300 million customers. For certain eligible sellers, Shopify Capital is a program offered by the platform that can provide up to $1 million in funding in the form of loans or cash advances.

Kickfurther is another funding platform designed to aid e-commerce businesses, offering inventory on consignment, which frees up the working capital that can be focused on other areas of their business. Kickfurther is extremely unique in the sense that businesses can connect with a community of backers to receive inventory funding without giving up equity or taking on debt. By creating a business profile that showcases the brand and its dreams, connections can be formed and working capital can flow by parties that believe in the same mission.

Shopify Capital:

What is Shopify Capital?

Shopify Capital is a financing program offered by Shopify, a popular e-commerce platform that allows merchants to sell their products online. The Shopify Capital program offers certain eligible sellers on the platform the necessary funds to grow their businesses, by offering loans and cash advances. These loans and cash advances range from as low as $200 up to $1 million.

How does Shopify Capital work?

Shopify Capital is invite-only and exclusively offered for sellers on the platform, meaning you won’t be eligible unless you receive an offer from Shopify. For those sellers who do receive an offer and take advantage of the loans offered, once the funds are disbursed to your bank account (typically within a few business days), repayment then comes from future sales also known as a remittance rate.

On average, the remittance rate is 10% and will vary based on the loan terms, which will then be withheld from daily sales on the platform. For Shopify Capital loans the loan term is 12 months, with milestone payments every 60 days to ensure you are on track for making repayments. Whereas cash advances do not have a set cut-off and will simply be repaid using remittance from daily sales. 

Benefits of using Shopify Capital

Perhaps the main advantage of using Shopify Capital, is that the financing program is derived from the eCommerce platform sellers already use to sell their products. Since most of the necessary information has already been provided and available on the platform,  there is little additional information that needs to be provided during the application process, and tracking repayment progress is available on Shopify’s dashboard. Shopify Capital also offers a fairly high borrowing limit in comparison to traditional e-commerce business lenders, with loans ranging from $200 to $1 million. 

How to apply for Shopify Capital

Since the Shopify Capital program is invite-only, you cannot directly apply for a business loan or cash advance. Shopify will determine eligibility and send an invite to certain sellers once they become eligible. If offered a loan, you can view funding options through your Shopify Dashboard. Review the offer or merchant cash advance and accept to start the underwriting process. If approved by Shopify Capital, you can then formally accept the offer, and funds can be disbursed within a few business days. It’s important to know that once a loan is offered and selected, there may be additional information you will need to provide to the underwriting team that could potentially disqualify you for the loan. 

Kickfurther:

What is Kickfurther?

Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.

Why Kickfurther?

  • No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.
  • Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.
  • Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.

Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.

Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. By funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.

How to apply for Kickfurther

Applying for funding through Kickfurther is simple and can be done by completing these three easy steps. Through Kickfurther’s website, you can create a free business account. Once your account is set up, you will then be prompted to complete the online application. After your application is submitted, you will then be connected with an account rep and can view your potential funding offer.

The main differences between Kickfurther and Shopify Capital

Kickfurther and Shopify Capital are two different funding options for small businesses, and there are several differences between the two. Here are some of the main differences:

  • Eligibility: Shopify Capital is only available to merchants who use Shopify’s platform to run their online stores. Kickfurther, on the other hand, is available to any small business that meets its eligibility criteria.
  • Funding model: Shopify Capital provides financing in the form of loans and cash advances, whereas Kickfurther covers your inventory on consignment. Both models utilize future sales of products for repayment. 
  • Repayment terms: Shopify Capital loan terms are based on 12-month periods, with an average of 10% deducted from your daily sales on the platform. With Kickfurther, there is no immediate or daily repayment, allowing you to control your repayment schedule. 

Success stories of businesses using Kickfurther

Join the 800+ businesses that have had success utilizing inventory funding through Kickfiurther! Here are just a few examples of companies that have success on the platform:

  • Heroclip: Raising $147,400 through Kickfurther, Heroclip was able to add distribution partners, expand distribution, and grow sales revenue due to increased inventory. 
  • Spongelle: Raising over $1 million, Kickfurther gave Spongelle the ability to fund large orders and provided inventory for spikes in sales, freeing up the capital to accept all desirable new orders and expand product lines. 
  • BigStock, Inc.: Raising over $1 million, BigStock, Inc. was able to alleviate cash flow pinches and meet increased demand due to maintaining sufficient inventory levels. 

Get funded with Kickfurther

Interested in getting funded at Kickfurther? Here are 3 easy steps to get started:

  • #1. Create a free business account
  • #2. Complete the online application 
  • #3. Review a potential deal with one of our account reps & get funded in minutes