As an Amazon seller, you may be wondering which funding option is best for your business. Sellers have a variety of options available so it can be hard to decide. Whether you’re looking for short-term cash flow or long-term capital investment, it’s an important decision for your business. Here are four options for Amazon funding, and a breakdown of their pros and cons.
Credit Card
As Amazon has increased in popularity, there is room for all kinds of sellers to make 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 business 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 business 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 it 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.
Get Started With Viably
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 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.
