Looking to sell your products but are worried about your finances? You might just be looking for invoice factoring to help you out – a boon to online sellers.
Amazon, a third party e-commerce selling platform, has made it easier for big and small manufacturers to get a steady stream of customers.
However, selling through Amazon doesn’t just involve you giving a percentage of your profit; there are downsides that you could easily downplay at first. For instance, you can’t expect Amazon daily payments as a seller, and that is just one problem that you would be dealing with.
The Top Problems You Can Face as an Amazon Seller
When you begin selling on the online marketplace, you need to wait as many as 14 days before you receive the Amazon Daily Payment for the commodities that you have already shipped out. At times, the waiting period can stretch to one month or even more.
You will need to wait a while – normally 14 days – before you get the payment. Even if you are running out of funds, you won’t want to take on an Amazon seller loan as it can be expensive.
Yet if you don’t, you could experience any of the following:
- Online orders could keep piling up.
- If you are advertising daily, it could also pile up the costs, since there can be a long delay in payment.
- You could find it difficult to manufacture and add new products to the inventory to meet customer needs.
- Inconsistent cash flow means financing for the next shipping, advertisements or orders could become a problem.
The best way to go about it is to have sufficient capital and reserves to meet the different business costs, from manufacturing, advertising and shipping to employee payments and other establishment costs. Invoice factoring companies like InvoiceFinancingAustralia.com.au// can also help you ride out the immediate financial crunch by getting you the money you need, so that you can keep taking orders from Amazon. However, you never know how many sales you will make the next week.
If you are witnessing a significant spurt in sales, you may be unprepared for it. Do you then stop sales since you wouldn’t have the money to keep things going, or do you look for other solutions? Many Amazon sellers look at invoice factoring, an Amazon seller cash advance, and we will take a look why.
How Can Invoice Factoring Help?
You don’t want to wait 14 days for your payment, and things could get messy if you don’t plan your finances well.
What you need is invoice factoring, which helps Amazon sellers get Amazon Payouts immediately, without waiting for Amazon to pay you.
You can use it to get short-term capital easily, making invoice factoring an efficient financial tool.
Understanding How Invoice Factoring Works
Let’s say you have shipped five bikes for a total of $2000.
The manufacturing cost for one is $200, and the retail price is $400, making the profit per piece to be $200.
Once you have shipped out the products, you are likely to wait for Amazon to replenish your manufacturing cost, which could take around 14 days normally as stated, and at worst, a good two months. You could probably handle the delay with your financial reserve. However, what if you make a sale of 20 bikes in the same period?
Invoice Factoring Could Help
If you have set up an invoice factoring agreement with an organization to advance cash payments – known as Amazon Seller Cash Advance – on your Amazon seller account, you won’t have to worry.
Once you sell a bicycle, the invoice factoring company will pay you after the sale, keeping a little percentage as its fee. Since they know your buyers are legitimate buyers and creditworthy clients, they won’t hesitate to make the payment.
With the money, you can ensure you experience no hiccups when it comes to the manufacturing or shipping process, helping you to keep your business cash flow.
The only cost for invoice factoring is what the invoice factoring company charges you as its fee. Remember that invoice factoring isn’t a loan, and you have no debt to repay, making this an ideal way to get short term cash for your business. You don’t have to worry about waiting for Amazon payouts anymore!
With the right attitude, and making use of the right invoice factoring services, you can do more. While we did talk about Amazon the entire time, you can get the benefit of invoice factoring for many other types of businesses – whether online or offline. Your invoice factoring company will look at the reliability of your customers, and if they see that, they are fine, and so are you.