We are lucky to have a number of high-value partnerships with different e-commerce providers around the world, all have a unique way they can support our clients in the e-commerce industry and today’s blog brings a fantastic way to help you fund your expansion!
Expanding your business is critical to growth over the long term and building a brand that is recognised globally, sometimes, however, we need a little help to make that happen financially.
5 Ways to Fund Your Amazon Business Expansion
By Victoria Sullivan
Are you ready to expand your Amazon business into a new market, but don’t know where to start or how to fund the associated expenses? There is so much to think about — and pay for — when expanding internationally, from company registrations, VAT, taxes, and currency exchange, to fulfillment, logistics and customs, to product market research, branding, PR, and more.
If you’re feeling overwhelmed, don’t worry — there are services like Global E-commerce Experts that will do the heavy lifting for you. What’s more, we compiled a list of 5 ways you can fund your international expansion, so now you have two fewer things to worry about. Keep reading to see which financing option is right for your expansion.
- Savings & Credit
A convenient option would be to dip into your savings or use a credit card to cover the necessary expenses. After all, the funds are available immediately, you can access them daily, and the cost is free (assuming you pay your bills in full and on time). That said, there are some important limitations to consider.
For one, you may not have any savings to begin with or you could find that credit cards aren’t an accepted method of payment for certain overseas expenses. Second, you’ll only be able to spend so much since you’ll eventually run out of funds or hit your credit limit. Lastly, if you are able to use a credit card, you could wind up with hefty interest charges and/or in an endless cycle of debt if not used responsibly.
- Traditional Bank Loans
Banks provide loans and lines of credit to established businesses. They typically offer large amounts, low interest rates and long payment terms, but it’s not easy to actually get approved. The application process can take weeks or months, and approval rates are low — especially for online businesses. Not only that, banks put a lot of emphasis on your FICO score when evaluating your business loan application, so if you’ve used your personal credit to get your business off the ground, your chances of an approval are even lower.
- Alternative Business Loans
In the last decade or so, a crop of online business lenders have emerged to make it easier for small and online businesses to get financing. These alternative lenders offer easy application processes and approval rates that are much faster and higher than banks. That said, the loan terms may not be what you are looking for — dollar amounts tend to be small, interest rates are high and payment terms are less than favorable (often involving daily auto-debits over a short period of time).
- Amazon Lending
Have you seen an Amazon Lending offer in your Seller Central account? The e-commerce giant launched its own financing program for its most promising third-party sellers. While you can’t apply directly for an Amazon Lending loan, they’ll let you know if you qualify by sending you a binding offer — in other words, the terms they share with you are non-negotiable.
Payability is a financing company for marketplace sellers that allows you to bridge your cash flow gaps and get your international expansion off the ground. Here’s how their two funding solutions work:
- Instant Access from Payability: Payability will pay you 80% of your earnings one business day after making a sale. The remaining 20% is kept on hold in case there are returns or chargebacks and is then released to you according to Amazon’s normal payment schedule. For a 2% fee on gross sales, you can get daily access to the cash you need to buy more inventory, keep up with demand and scale your business faster. Plus, you can say goodbye to stockouts for good. High volume sellers with $50,000+/month in Amazon sales may qualify for reduced rates.
- Instant Advance from Payability: Payability will purchase your future receivables and advance you up to a month of sales. For example, they would buy $5,000 of your future sales for $4,000. The cost to you is 1% of the $5,000 for each week it takes you to pay back. Payment is expected within 16-20 weeks and the total cost depends on how many weeks it takes you. There are early payment rebates and when you’re halfway paid back, you’ll be eligible to refinance.
Since 2016, Payability has sent nearly $1 billion in daily payments to more than 2,000 marketplace sellers, allowing them to grow 2.5x faster than their competitors — and some have grown even more than that. In fact, this longtime customer tripled the size of her business with the help of Payability. To learn more about how Payability can help take your business to the next (international) level, visit go.payability.com/GlobalECommExperts to sign up and claim your $200 sign on bonus. For real feedback from real customers check out Payability on Trustpilot, BBB and Fit Small Business.