As an Amazon wholesale reseller, there is nothing worse than working really hard to land a new account, only to realize you don’t have enough working capital or credit available to fund the inventory.

Fortunately, there are solutions to this problem, and in today’s episode, my guest is Vicky Sullivan from Payability – a factoring company solely focused on helping Amazon sellers to get access to more of their capital for inventory purchases.

Full Transcript

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VICKY SULLIVAN [BRIGHT IDEAS EP279]

Trent: Welcome back to another episode of the Bright Ideas Podcast as always I’m your host Trent Dyrsmid; and in this podcast I am here to help you discover what these working need to e-Commerce by shining a light on all the tools, the tactics, and the strategies that are in use by today’s most successful entrepreneurs. 

In today’s show we have a very special guest from a from one of our sponsors Payability, Her name is Vicky Sullivan thank you very much for joining, you’re welcome to the show. 

Vicky: Thanks for having me; it’s a lot of fun. 

Trent: So, for the folks who might not be familiar with you which is probably most of my audience, let’s start there who are you and what do you do? 

Trent: So, I’m Vicky Sullivan, and I’m the Marketing Manager at Payability here in hot and sweaty in New York City right now. And if you read our weekly newsletter, I’m the one that writes the newsletter and I also get to work with awesome partners like Trent. 

Trent: Cool! so we’re going to be talking a lot about money and cash flow and inventory financing and so forth in this episode so let’s start off with when it comes to cash flow management specifically for e-Commerce business owners who are selling on the Amazon sales channel, what are some of the things that you think they should be paying the closest attention to? 

Vicky: Well, platforms like Amazon have really created you know seemingly unlimited consumer demands; you know a kind of like we’ve never seen before in history so even you know really well financed Amazon businesses can often run into cash flow issues especially when it comes to staying in the buy box, buying inventory of avoiding those dreaded stock.

So, what I would suggest is really changing them to cash flow and making sure you keep beating the beast. Amazon businesses are really cash flow businesses; so the more cash you have at hand, the more flexibility you have with your money and your ability to restock, and the more successful you’re going to be, you often have to act fast in this type of business, the selling strategy that works maybe 6 months ago might not be working today.

So you really have to be very nimble and no matter how big you get on Amazon, you really have to operate like a startup or small business and Cash Flow can definitely help you do that. 

Trent: And so a quick tip folks for cash flow in the next interview and interview number 280, I’m going to be interviewing a bookkeeper who uses the Profit First methodology which we use and we actually have a separate bank account specifically devoted to our capital for inventory. So, if you aren’t familiar with Profit First, either go buy the book on Amazon to read it now or wait until next week when Cyndi’s interview is live and you learn all about how you can do that. 

All right so for sellers who are financing inventory using credit cards which is obviously a pretty common way for people to do it in the beginning, do you have any special tips for them? 

Vicky: Sure! Credit cards can be a great tool, I don’t currently have an Amazon Business may be someday; but I am also one of those points obsessed people. Utilizing points is a great way to go or even cash back depending on if you’re you know if you love if you get a lot more have trouble and then it might be the way to go if you know you’re running your own business and you can go wherever you want to get a lot more of the travel that might be the way to go but if the cashback is making you more profitable, go with that. So, it really depends on your proper ends and your lifestyle and while these programs are awesome and I love my point program.

I am also a reserved person, just in case anybody was wondering; and really love this point program  that’s great but do not bite off more than you can chew, don’t go into debt thinking that you know the points are so good so why not? Definitely pay it off every month and don’t get in over your head. 

Points are great but pay monthly much to make a lot of credit cards don’t even give you the points if you don’t pay it off, you definitely utilize those programs but don’t do so to your detriment. If you’re not paying every month, maybe it’s time to just use your debit card or cash. 

Trent: Speaking of paying them every month, if you are new to my show, if you go to Bright Ideas and you Google an episode with Josh Lucas if you just type his name into the search box, you’ll find— you’ll learn to sue pretty clever credit card strategies that Josh used to increase his working capital while running his business. So what about when credit cards are maxed out, what’s next? 

Vicky: So, when credit cards are maxed out, you would have— personally I wouldn’t suggest that; just paying them off but you’re really growing and maxing out your credit cards as part of your strategy and you want to keep growing it really proven products, you do have you know there are a lot of different ways to finance your inventory. You can borrow from friends and family which can be great but can be really bad if it’s going to start bringing more drama into your life, it might not be worth it; but if your family member is going to be more a partner in your business, maybe it’s worth it to you. 

Speaking of partnerships, there’s raising capital, raising equity and by that I mean you know bring an investor into your business kind of like shark tank style, which again kind of like a family or friends can be really great for your business that that person is you know a partner maybe they’re an expert on an area of your business that you’re not an expert and you really complement each other that could be a great way to grow your business and they’re going to be bringing in expertise as well as money. I would say I wouldn’t go with somebody who is just bringing in money, and not the expertise because you’re just going to lose you know a portion of your business rather than getting a smaller piece of a much bigger pie. Or somebody you’re going to butt heads with because that can again lead to more drama in your business than it’s worth. 

Again, home equity loans but I would be careful with those especially if you don’t own a significant portion of your home, those can be financially detrimental if something goes wrong but say you own your home outright or almost outright, that might be a good way to go about it as you’re really just kind of borrowing from yourself at that point.

But I mean if you don’t own a significant portion of your home, they could be tempted to take the interest rates might be lower, you could get yourself into a very bad situation if something doesn’t go as planned and your house is kind of on the line there.

There’s traditional bank loans, they can be very difficult for small businesses to get particularly those selling online but it’s a it may be your Amazon business is a very small portion of your business, you’ve had a brick and mortar store over a decade now, maybe an act that is an option for you but in other cases they can be again they’re very hard small businesses to get off and you want to visit a physical store or hold inventory as collateral which could be really hard if your inventory is caught up in FBA.

There is alternative online lenders which do have a lot more flexibility when it comes to approvals and also approve people are a lot faster but they are a little bit more expensive or some have a lot more expensive than your usual bank loan.

Trent: With the alternative lenders, you really need to be careful about all the fees that they tuck into their loans. Over the years, we looked at a number of those and every time we did, it just was prohibitively expensive. So, all the things we’ve described so far go from easy like credit cards to somewhat easy home equity line of credit to relatively difficult to raise money from investors because if you don’t have an established network or you don’t have a relationship with somebody to go out and try and find that money from cold investors will definitely be a challenge. And I know Payability offers a much, much, much easier solutions, why not go ahead to tell us about that?

Vicky: Sure! So, Payability a financing company, exclusively for Amazon e-Commerce sellers really understand these businesses a lot more than I mean or your other financing options. So, we have two products one is our Instant Access product which is going to make things a whole lot easier for you especially if you’re a situation where you’re growing but you’ve maxed out your credit cards. 

And so, what we do with instant access product and it’s a factoring products, and so they’re going to be paying fusty that you what on Amazon, we’re going to get you paid every day for your sales and you get more cash flow into your business, you’re able to finance your business with your own money rather than someone else’s money. That way, you know you’re not borrowing more on top of the credit cards that are already maxed out and you know that can be a really great solution for people who have maxed out credit cards and you know want to continue to buy inventory, re-invest products and re-invest in their business. 

And we also have a second product which is our Instant Advance products; so we’re going to give you two months worth of payouts in one month sum 24 hour who pulls no car no credit checks on either of these things and that’s all because we’re able to accrue you based on your own account health and sales performance and not your credit so there’s never any credit holes or credit checks, it’s financing based on how great of a seller you are. 

Trent: A couple of follow up questions; one define factoring for people who might not know what that is and then two, how long to be eligible for either of the products you described as a seller, how much history do I have to have on my Amazon account?

Vicky: Sure! So factoring is just like kinda what I said where we are you know you’re financing your business but you’re getting, you’re paying you’re getting your own money at a discount and you’re getting a little bit less to get it a lot sooner and re-invest in your business so and so to put it in more financial terms, we are you know purchasing receivables i.e. your Amazon sales at a discount.

Trent: So I’m not taking on any additional debt? 

Vicky: No, especially not with the daily payment product. It’s just accelerating your own payments so if you have a really big sales day, yesterday you can but that money to work right away rather than having it to wait for two days. 

And to be eligible for a Daily Payments Product or Instant Access Products that you just have to have 90 days of sales history and around $2000 a month in sales and for our advanced products it’s around 9 months of sales history and $5000 a month in sales. 

Trent: Okay, so you guys have set up some special promotions I think for the Bright Ideas audience is that right?

Vicky: Yes, we have

Trent:  Are you going to give us a quick run through those and how to get to them? 

Vicky: Sure! So we have a $200 sign on bonus when you use brightideas.co/payability right? 

Trent: brightideas.co/payability if you go to brightideas.com, you’re going to learn how to bake a cake.

Vicky: If you want the payability discount, go to  brightideas.co/payability and get your $200 sign on bonus when you sign up for either of our products. 

Trent: Wonderful! Alright Vicky, thank you so much for coming on and very quickly explaining what seems to be an extremely convenient tool for folks who are looking to raise additional or get access to additional working capital without taking on additional debt.

Vicky: Awesome! 

Questions Asked During the Interview

  1. Who are you and what do you do?
  2. When it comes to cash flow management for ecommerce, what are some of the most important things to pay attention to?
  3. For sellers who are financing inventory using credit cards, what are some of your best tips?
  4. Once a seller has maxed out their credit cards, what are some other options for raising capital for inventory?
  5. How does Payability help sellers deal with cash flow constraints?
  6. Tell me about the fees associated with your product?

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Today’s Guest

Victoria is a Marketing Manager at Payability. She has over eight years of social media, copywriting and marketing experience. Prior to joining the Payability team, Victoria developed social media content and strategies for top technology brands such as Skype and Samsung. She holds a degree in Advertising from Syracuse University’s S.I. Newhouse School of Public Communications. She can often be found in a yoga class or working on her fashion blog.

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