When running an Amazon business, you may stumble upon financial obstacles and to be honest, it should come to you as no surprise. At the same time, you may also realize that you don’t always have enough cash on hand to manage your store.
As an online seller in an extremely competitive market, you must understand the importance of having enough funds. When operating an Amazon store, you need to have enough resources to purchase more inventory, increase marketing efforts, and have enough cash during slow sale periods.
Luckily, with the help of working capital, Amazon sellers like you can quickly and easily take care of all the operations mentioned, by distributing these payments across a few months.
Below we’ll dive deeper into how working capital can help you pay for more inventory, boost marketing initiatives, solve periods of short cash flow, pay for taxes, and ultimately help you sell faster and of course, sell more.
1. Buy More Inventory
You may already have realized by now that ordering inventory for your store can be challenging and unless you’re drop-shipping, you’ll need to purchase your stock to sell products. However, if you find yourself without much funds, this could leave you in some deep trouble.
The reality is, the more inventory you own, the more marketplaces you’ll be able to sell on, and the more opportunities you have to expand your business. If you want to stay afloat and keep up with the already tight competition, you’ll need a significant amount of inventory to do so. Furthermore, without enough cash, you’ll have trouble paying suppliers or grabbing opportunities to purchase inventory at special prices.
Fortunately, with working capital, you’ll be able to better manage your inventory and avoid the risk of damaging your Amazon ranking, ultimately helping you increase your sales.
2. Increase Marketing Efforts
Thinking about stepping up your advertising game? On Amazon’s platform, marketing and advertising costs can be a real pain but working capital can help by allowing you to allocate more budget towards advertising and marketing efforts.
There are over 500 million products sold just on Amazon.com alone! With a plethora of competition out there, it’s no surprise your products are not in front of your customer’s eyes enough. To survive and thrive , you need to do whatever you can to make sure your store appears on the first page of search results. Otherwise, customers may never discover your items, leading to a loss in revenue.
Amazon Sponsored Ads (sponsored products, sponsored brands and sponsored display) allows you to run ads on both search results and product pages. And with capital advance, you’ll be able to pay for those advertising costs, helping you reach a wider audience and boost sales.
Now that you’ve understood that to sell quicker and sell more, you need to stock up on inventory and push marketing efforts, here’s how to solve the cash flow issue and also pay for those unexpected tax bills.
3. Solve the Issue of Short Cash Flow
Did you know? 82% of small businesses fail due to poor cash flow management and lack of cash. To make sure your Amazon business doesn’t become another statistic, here’s how to solve the cash flow issue.
- Analyze sales channels – When you properly analyze your sales channels, you’ll be able to optimize the amount of inventory you buy and sell at any given time. Paying upfront for products that have shorter sales cycles can help speed up cash in, allowing you to estimate the best time to experiment with newer products that may have longer sales cycles.
- Plan in advance – Forecasting your cash flow, and budgeting will help you organize your finances and give you peace of mind. Taking a look at your balance sheet and PnL and making sure that you’ve included all expenses (such as inventory, seller fees, advertising, payroll, office supplies, etc.) will help you to determine what is a necessary and fixed cost and what you might be able to spend less on.
- Use external funds – Once you have taken a thorough look at your expenses, you may find that there is a need for external financing.
4. Pay Taxes
Just like other entrepreneurs, paying taxes on your ecommerce business isn’t something you can ignore and whether you like it or not, taxes will always find their way to creep up. It seems they typically arrive at the most inconvenient time. Luckily for you, a working capital solution can help ease the pain of having to pay all of those tax bills at once. No matter the amount, having extra funds can help you gradually pay for your taxes and spend more time on other efforts instead of worrying about paying them in one go.
Drive More Sales with Payoneer’s Capital Advance
Now that you know just how much working capital can help your Amazon business, it’s time to consider external funding options.
Payoneer, a leading cross-border payments platform, can offer a flexible working capital solution to help you scale your Amazon business. With Payoneer’s Capital Advance, you can receive working capital funds within minutes and give your business the extra boost it needs with up to $750K instantly along with a one attractive fixed fee and convenient gradual settlement plan, leaving enough funds to manage daily expenses.
Current Teikametrics customers go right to Capital Advance Grow. As valued customers, Teikametrics sellers (with more than 3-months tenure) will receive direct access to Payoneer’s top-tier Grow offer. They can get up to 100% of their average monthly payouts, up to $750K.
Want to learn more about how Payoneer’s Capital Advance can help boost your Amazon business and leverage your sales?