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8 Inventory Financing Options for Amazon Sellers
Feb 28, 2018

8 Inventory Financing Options for Amazon Sellers

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Estimated reading time: 4 minutes.

Financing inventory can be intimidating and often stressful even for bigger sellers. But, it doesn’t have to be. When you’re short on much-needed inventory, it’s easy to make rash decisions when it comes to financing it. The best thing you can do is take a step back, do your research and consider your options.

1. Money in the Bank If you have enough personal savings to fund your holiday inventory, you can pay for your next purchase order or closeout sale (in the case of retail arbitrage) interest free. You also won’t have to wait for credit checks or additional paperwork to go through. However, savings only goes so far. Once you’ve used your savings to cover inventory costs, you may have to consider other financing options should you need additional inventory. You also may not have enough savings available in case of an emergency or to cover unforeseen costs.

2. Credit Cards Credit cards are fast, easy and convenient. If you’re able to pay off the balance in full every month you can stock up on inventory without having to pay interest. However, if you’re unable to pay off your balance in full, the interest can be high. Should you need additional inventory you may end up adding even more to your credit card balance before you even pay it off. Like savings, your credit limit only goes so far. Once you’ve reached it, you won’t be able to buy more inventory.

3. Traditional Bank Loans If you’ve been selling on Amazon for a while or have other sources of income for your business, you may qualify for a term loan (one lump-sum) or a line of credit (a revolving pool of funds to access as needed). While banks are able to offer large sums of money at low interest rates, the approval process can be tedious and small businesses often aren’t approved. In the time it takes to complete the paperwork and go through the review process, you may have already lost sales.

4. Alternative Financing Alternative or online financing is relatively new. These lenders offer higher approval rates, easier approval processes and faster financing. But, there’s a catch. These loans often have high interest rates, high fees and short payment terms.

5. Amazon Loans Amazon Lending offers select qualified marketplace sellers loans. However, you can not apply or anticipate when a loan will be offered. Amazon will notify you in your Seller Central dashboard with a loan offer. This is an “all or nothing” offer with an expiration date. Interest and repayments will come directly out of your earnings.

6. Crowdfunding/Friends and Family One way to avoid paying interest on inventory is to borrow money from friends and family or start a crowdfunding page on Kickstarter or Indiegogo. While you can avoid paying interest, you may have to give equity or rewards to your investors. However, you may not get ahold of funds and you risk making those close to you feel uncomfortable. Crowdfunding sites have minimum fundraising requirements and friends and family may not have the money or the desire to get involved in your business.

7. Cut Deals with Suppliers If you have a longstanding relationship with your suppliers and always pay on time, you may be able to negotiate a better deal on payment terms and pricing. You also may be able to get a discount for buying in bulk if you’re buying more inventory than usual to cover the holiday rush. However, if you’re just starting out or still trying to find the right supplier, this won’t be an option.

8. Payability If you’re tired of waiting 14 days to get paid for the sales you made today, there’s a better option. Payability will give you daily access to 80% of your Amazon earnings at a 2% fee on gross sales. The remaining 20% is left in a reserve to cover fluctuations such as returns and is released to you on Amazon’s regular 14 day payment schedule. The biggest difference between Payability and a loan is that it allows you to cover purchase orders and grow your business with your own money rather than someone else’s. Daily cash flow from Payability gives sellers a competitive advantage in the Amazon Marketplace. With Payability’s daily payments, sellers have been able to avoid the dreaded stockout and expand faster than they ever thought possible without having to rely on credit cards or savings.

Payability is now rewarding customers with lower fees and higher advance rates over time. You can learn more about their Customer Loyalty Program here.

Hopefully, you feel more confident about how you plan to fund your Amazon inventory after hearing more about your options. If you’re interested in learning more about how you can scale your Amazon business with Payability, check out You can get a $250 credit if you sign up through our special A2X promotion.

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