Where to Get Money for Business on Amazon
The need for funding for entrepreneurs on the Amazon marketplace may arise when their own resources come to an end, and the business requires further investments, for example, to introduce new commodity positions, increase purchases of the best-selling products, etc.
Key situations leading to the need for funding
Given that the business on Amazon is far from new, there is a list of typical situations in which entrepreneurs need financial investments:
– the need to purchase large quantities of goods;
– introduction of new or expansion of the range of existing goods;
– access to new countries or trading platforms;
– avoiding cash gaps and choosing a warehouse;
– using logistics to reduce costs on delivery, etc.
How to attract finance for your business on Amazon?
- Lending line from the marketplace. You can get a loan for the purchase of goods in the amount of up to 750 thousand dollars at different interest rates. But for such an opportunity, you need to meet some criteria established by the site itself. In addition, some product lines are non-creditable.
- Crowdfunding. There are special venues that can help raise funds as an advance for a product launch. However, there is no guarantee of the reliability of this method.
- Attracting investment through partnership. Behind this method lies a decrease in the share of its influence and profits by increasing the number of business owners.
- Investment for innovation. They are attracted for new developments, startups. They carry a lot of risk for the investor.
- Individual loans. A fast and convenient way to get financing on good terms. The pitfalls in getting money in this way are: underestimating the importance of company reviews and lack of attention to the details of credit conditions.
- Bank lending. With all the attractiveness of loan rates, there are inconveniences in obtaining funds due to the large number of required securities, a significant investment of time, and other red tape. In some cases, applications are rejected.
- Online lending. This method is characterized by high interest rates and the presence of inconvenient “nuances”.
Whenever you need to attract third-party funds for your Amazon business, analyze the cost of servicing the loan and the estimated profit, regardless of how attractive it might seem to you to receive this money. Only this will give you an understanding of the possible risks and usefulness of using other people’s funds.