This is a guest post written by Reco and Dan, co-founders of 2doodz, expert eCommerce sellers and entrepreneurs. Reco and Dan have been selling for over three years solely on the Amazon platform. Their beginnings were in Shopify and eBay, but migrated over to Amazon to take advantage of their massive customer base.
There are many different methods to sell on Amazon. Two of the biggest struggles to starting out are controlling growth and managing profit margin. If you do not have significant capital to start out with, you can either find yourself scrounging for every penny to keep your store alive or fighting with other sellers for a larger piece of the pie. Either which way, it is a rat race to the top.
You may have asked yourself, how do I understand my true profit? Simple math actually. Net income minus fees and product costs. After that, subtract your “cost of doing business” fees, and throw a small slice (say 10%) into “growing your business”. The rest is your slice of the pie. TRUE PROFIT.
However, a growing business is not always a profitable business. Even with higher profit margins, say 30-40%, if you exceed those, you can find yourself pinched and hurting. This is especially true for new Amazon sellers. You can find yourself stuck between a rock and a hard place when Amazon does not pay out expeditiously. In other words, newer Amazon accounts are subject to rollover balances where Amazon holds back all or a portion of their Amazon balance for more than 14 days. How do you handle this money crunch?
One word. Payability. They bridge the gap and help you grow your business with daily payouts. When Reco and I were growing month-over-month, we found ourselves running low on cash. Amazon was holding our sales income hostage. Payability had us back on our feet within 24 hours, releasing a massive amount of funds that Amazon would have held for months longer.
As our profit margins became more controllable, we were able to take necessary risks, like increasing pricing to be more competitive, or taking a chance on a risky bundle, to help us leap forward. We saw our growth skyrocket. It was 110% worth it in every single way.
Regardless of if you are coming in with $10,000 to $1,000 to start off selling on Amazon, Payability should become a necessary part of your business structure. With their daily payouts, various programs for investments in your burgeoning eCommerce business, and their fantastic cash-back card, we found this is a bond that could never be broken.
Let’s be honest here. Without their help, we may not have been able to withstand the blow of uncontrollable growth. Don’t think twice when you get in a pinch. Sign up for Payability because free cash flow will give you the freedom to grow your business continuously and on your own terms.