viably

Financing for Amazon Sellers: Your 4 Best Options for Success

Finding the ideal financing for Amazon sellers is crucial for scaling your ecommerce business effectively. As an Amazon seller, the sheer amount of financing options available can be overwhelming and leave you wondering which is best. To take your Amazon store from a small business to the ecommerce empire of your dreams, it’s crucial that you choose an Amazon business financing solution that will remain sustainable in the long run and can scale alongside your business. Whether you’re looking for a short-term cash flow boost or long-term capital investment, choosing a funding option is an important decision for your Amazon business and requires a healthy amount of research before you make a commitment. 

Importance of Financing for Amazon Sellers 

All good business owners know that you have to spend money to make money, however, very few business owners want to spend their own money. Even if you have set aside money for the initial business financing though, that funding is limited and can only last for a finite time period. It’s very rare that cash flow alone can support your Amazon business, especially with the potential stutters and hiccups that can so easily occur. 

If you’re hoping to grow your Amazon business, it’s smart to begin looking into Amazon seller financing options. Amazon financing solutions can help bridge the gap between pesky payout periods, provide an infusion of cash to help boost marketing for Amazon FBA, or even provide more buying power for inventory financing during peak seasons. Greater access to funding is invaluable to any business owner, but especially to those in the hyper competitive world of ecommerce. 

Without a healthy Amazon financing plan for your Amazon business there’s no guarantee that your cash flow will remain consistent and streamlined. Increasingly wide gaps between big inventory purchases and sales, as well as between Amazon FBA fulfillment and Amazon payouts, often leaves working capital tied up so you can’t access it. At the same time Amazon inventory financing can be costly, and if done incorrectly will create a cycle of dependence on predatory loan companies. That’s why it’s so critical to understand your financing options. 

Healthy business financing for Amazon sellers exists, although it may look different for each business, and can ensure that you fully streamline inventory financing and cash flow. By taking on a sustainable amount of funding you can set your business up in the perfect position for growth and success while maintaining control as the business owner. 

Challenges of Financing an Amazon Business

Fear of Debt 

Many Amazon sellers and business owners are worried about the consequences of going into debt over their business. Some fear losing control over the day-to-day operations while others are concerned that taking on loans or external funding will harm their credit and ultimately send their small business under in the long run. 

While a healthy fear of debt is useful for keeping your business financially healthy, there is a sustainable amount of supplemental funding that can help you rest easy while growing your business. The key is to ensure that your business never takes on more funding than it can use. In order to do this, it’s crucial that you have a plan for every dollar in funding that you take on. 

Requirements for Financing

There are more business financing options available now than ever before, but with each new funding opportunity comes a unique set of requirements and challenges. Ecommerce, in particular, can have especially strenuous financing requirements due to the inconsistent and volatile nature of the business model. Lofty requirements, including years of sales history, consistent profits, and tangible assets, can make it difficult for Amazon sellers with a small business to obtain loans. However, finding the right Amazon financing option is not impossible. Many ecommerce funding solutions have appeared in recent years to fill this gap.

Credit Card

As Amazon has increased in popularity, there is room for all kinds of sellers to make money. For some sellers just getting started, the only thing they need is a way to purchase some inventory. They have very little cash to get started and no  history, so the best option might be a credit card. The idea of using a credit card to finance purchases on Amazon has some attractive features, but there are also important considerations for sellers before making this decision.

The most obvious advantage of using a credit card for Amazon funding is convenience. Credit cards allow customers to receive their products quickly and securely, without having to wait for funds from other sources such as bank transfers or cheques.

Additionally, many credit cards offer rewards points or cash-back bonuses which can be used towards future  expenses. The downside on credit cards: it’s very expensive to carry a balance, and you can only fund as much inventory as your credit limit will allow.

Amazon Lending and Cash Advance

Most sellers have access to Amazon lending options or merchant cash advance, which allows sellers to receive a loan to cover their upcoming costs. You can use this cash to purchase inventory, pay for marketing and advertising expenses, and other necessary expenses associated with running an online store.

The benefit of taking capital from Amazon is that it is conveniently accessible from within your Amazon Seller Central account. The downside is that Amazon lending can be more expensive and carry a higher APR than other options.

Banking Loans

Some experienced ecommerce sellers might qualify for a bank loan to fund their Amazon growth. Banks offer various types of loans with different terms and conditions, making it a complicated decision to make. It’s crucial to understand the pros and cons of taking on such a loan in order to make an informed decision.

When considering banking loans for Amazon funding, one of the primary advantages lies in its low interest rates which can be beneficial in the long run. Banks also provide flexible repayment schedules along with access to additional funds should you ever need them. Unfortunately, it is very difficult for Amazon sellers to qualify due to rigid underwriting processes. It takes a substantial history of sales, and often established success outside of the Amazon marketplace to qualify for traditional bank loans.

Ask about Viably’s Financing for Amazon Sellers

As an Amazon seller, it can be daunting to figure out the best way to finance your business. You want a funding provider that understands your Amazon business, and offers the right products to help you grow.

With Viably, you can connect your Amazon Seller Central account and use free business banking. Based on your unique data, you’ll receive tailored funding offers to help your business grow. This option provides access to working capital quickly, and your options evolve as your business grows. Sign up for free and connect your accounts to see how much funding your business could receive. In conclusion, understanding these financing options for Amazon sellers can be a game-changer for your online business success.

Finding the Best Option for Your Business

While it can be overwhelming considering the sheer number of financing options available for Amazon businesses it’s critical that you do your research before taking out a loan. Not all funding is created equally. The increase in Amazon Seller financing options has allowed for more flexibility, personalized plans, and competitive rates but predatory loan sharks and unsustainable funding options remain, which can hurt your small business if you’re not careful. 
Ensure that you’re taking on the right amount of funding, with the best terms, and at a company you can trust by comparing your offers seriously and taking into consideration how they might affect your cash flow. With Viably’s forecasting tool you can make a plan for how to allocate every dollar for Amazon inventory financing. Remember, best option for your Amazon business will help you grow without breaking the bank.

Plan for the change in seasons with ecommerce forecasting. Get Funded

Funding to grow your business
is just steps away

Our growth specialists can create tailored funding offers to help your ecommerce business.