So you’re hitting your stride on Amazon and want to keep the momentum going. Where should you start? In this two-part guide, we outline three areas of focus that will help you sustain your growth — plus, how to keep your working capital up so you can actually make these key investments long-term. Let’s dive in..
Part One: How to Drive Sales Momentum
First things first: what growth tactics will actually keep your sales momentum going? As a starting point, we recommend doubling down on inventory, marketing, and supply chain efficiency. Let’s take a look:
1. Buy More Inventory
This one is a no-brainer: To keep up with growing demand, you’re going to need to continuously reinvest in your supply. If you don’t, you’ll run the risk of stocking out. To determine how much inventory to order and when to make each order, look at your inventory reports in Seller Central. Or, consider buying inventory in bulk to save on unit cost and give yourself a cushion of safety stock should demand spike even more than it already has.
2. Invest in Marketing & Advertising
Sponsored Posts and other PPC campaigns are a great way to drive sales. If you’re already running such campaigns and they’re working well for you, keep investing in them. In addition, you could try to expand your reach further by optimizing your Amazon SEO, launching social media and email campaigns, or even partnering with relevant influencers.
The more you can spread the word about your product(s), the better. To help you get the most bang for your marketing buck, consider investing in ad retargeting and/or using a solution like Profit Whales, which helps you optimize your ad spend.
3. Optimize Your Supply Chain
As you’ve likely experienced during the COVID-19 pandemic, supply chain disruptions can wreak havoc on sales momentum. Hopefully, you’ll never experience a disruption of that magnitude again, but you can take steps to make sure your supply chain is running optimally.
Start by evaluating your current supply chain from start to finish. Consider how long each step in the process takes as well as how much it costs you. This includes manufacturing, shipment to a storage facility or fulfillment center, storage, fulfillment itself, and finally, shipment to a customer. Can any improvements be made? Can you negotiate with your suppliers and vendors to get better rates, faster product times, or better delivery? Can other suppliers or vendors do the work at a better rate or with a faster turnaround?
Then, give your venders a heads up about your growing sales, so they can prepare accordingly. For example, tell your suppliers so they know to expect larger orders, more frequent orders, or even last-minute orders.
At the end of the day, the last thing you want to experience is a production or shipping delay that ultimately impacts your sales momentum, so keeping tabs on your supply chain and ensuring that it’s running optimally is key for your long-term growth.
Part Two: How to Invest in Momentum Long-Term
Now that we’ve laid out the three areas to prioritize for continued sales momentum, you might be wondering how you’re going to actually make such investments. Simply put, you’re going to need financing. After all, Amazon’s two-week payment delay doesn’t really give you a reliable or consistent source of cash.
Having positive cash flow and healthy working capital gives your business more flexibility and reduced risk. You can react in real-time to all kinds of needs. For example, you can reinvest in more inventory more quickly as your sales grow. You can put more money behind advertising campaigns that are working for you. You can even gain negotiating leverage with suppliers and vendors — in other words, if you’re able to pay them early or up front, they might be willing to discount unit costs, shipping fees, etc.
If you’ve ever researched financing for Amazon sellers, you know that there are a variety of options — from Amazon lending, to loans and cash advances, eCommerce-specific lenders like Payability, and many more.
Amazon launched Amazon Lending to help sellers get seamless access to capital. The program includes loans up to $750,000 as well as access to the Marcus Business Line of Credit. It is an invite-only program designed specifically for Amazon’s most successful sellers. If you qualify for either product, you’ll get an offer in Seller Central. There is no way to apply unless you see an offer inviting you to do so.
Business loans are certainly an option for your financing needs. At a high level, there are two categories of loans: traditional bank loans and online business loans.
Traditional bank loans generally offer high dollar amounts (for example, $1 million), long payment terms (sometimes up to 25 years), and low interest rates. However, their application process can take weeks to months and requires a lot of paperwork. Additionally, they are designed for long established businesses with years of operating and sales history as well as a physical location. As a result, approval rates for small and online businesses are low.
Conversely, online business loans offer smaller loan amounts (typically ranging from $5,000 – $500,000), short payment terms (generally 6 – 36 months), and higher interest rates than banks. Their application processes are generally entirely online and take a matter of minutes to complete. Decisions and funding are often delivered within 24 hours.
Another option is a cash advance, which is an advance of your future receivables (sales) that a cash advance company essentially buys from you at a discount. You’d get a large lump sum of cash that is calculated based on your projected sales volume.
One such company that offers advances to eCommerce businesses is Payability. With their Instant Advance, you could get up to $250,000 in as fast as 24 hours with no credit checks.
Imagine getting your Amazon payouts every day and in real-time. While Amazon no longer offers daily payments to its sellers (only grandfathered accounts have this benefit), there is another way to get paid every day on your sales, as they happen. And that’s with Payability’s Instant Access.
With Instant Access, you’ll get your Amazon payouts one business day after making a sale, every business day. The application process is simple and you could get approved — and start getting daily payments — as soon as tomorrow. All without a single credit check.
With Payability, you can overcome the cash flow challenges that Amazon’s two-week payment delay causes, get paid daily, and get the funds you need to make growth investments — you know, the kind that will let you keep your sales momentum going. Payability not only understands the unique cash flow needs of marketplace sellers, they also understand that time is money. As such, the application process is entirely online and you could get approved in one business day — all without a single credit check. Visit Payability to learn more or begin an application. New Payability customers referred by Profit Whales will receive a $250 sign on bonus.
Other Financing Options
Other financing options — such as credit cards, invoice financing, and venture capital to name a few — are also worth considering. What’s most important is that you assess your options and find one that is the right fit for your business and needs. So think about how much you need, when you need it, and how you’ll use it. This should help you narrow down your options and make a financing decision with confidence.
In the meantime, find out how other eCommerce sellers might have used your lender of choice for their own growth. For example, Payability has helped thousands of Amazon and other eCommerce sellers grow their businesses so much faster than their competitors.