If you ask any online seller about their goals, you’ll hear two things almost every time: they want to grow their sales and they want to sell on more marketplaces. The first goal is essential, more sales means more profit, and a more successful business. The second goal, selling through multiple channels, makes the business a lot less risky.
These goals may sound simple, but they aren’t easy to achieve. To grow, ecommerce businesses need cash. You can only sell more if you have the funds to buy stock in larger quantities and quickly take advantage of new growth opportunities. Likewise, diversifying across multiple marketplaces takes a lot of effort to set up on each platform, to build sales and to manage everything day-to-day.
It’s been a year since we last talked about Payability, and its innovative service to help Amazon sellers get their payouts daily, now known as Instant Access. Things have moved really quickly since then.
Payability has a new service called Instant Advance, which provides ecommerce sellers with a big cash injection quickly to help grow sales. It has also expanded beyond Amazon, and now supports 15 marketplaces and shopping carts in total. Clearly this is a business moving as fast as the online sellers it supports.
Payability’s new Instant Advance product helps sellers grow their businesses by providing a fast, upfront capital injection based on predicted sales over the next few months. A decision can be given in just a few hours, after the seller has completed the application and connected their sales channels.
Who’s eligible for Instant Advance?
To be eligible for Instant Advance, sellers have to be based in the U.S. and have at least nine months of sales history. They need to be selling over $10,000 per month and have strong performance metrics, as these factors are used to calculate the amount and weekly fee.
What can the advance be used for?
Payability recommends that sellers use Instant Advance to take advantage of opportunities to grow. For example, a seller could be close to launching a new product and in need of funds to buy inventory, spend on advertising, generate buzz and achieve a strong product launch.
Another example is when an unexpected buying opportunity arises. A supplier might have a short-term volume discount or a limited amount of high-margin stock remaining, but to get the deal the seller needs more capital. Instant Advance can provide that, allowing the seller to take advantage of the opportunity, buy the inventory and make sure they reap the benefits ahead of their competitors.
Those are just two examples but, in general, sellers who use Instant Advance should have a clear plan of how they are going to use the additional funds before they apply for the service. It’s not a decision to be taken lightly, before thinking through all the circumstances. And while there’s no rule saying the advance can’t be used to help a seller through a bad patch, like a season when sales are slow, Payability recommends its sellers not use advanced funds for this purpose.
It should go without saying that Instant Advance should be used for business expenses only. This isn’t easy cash so you can go and rest on the beach!
How much does Instant Advance cost?
A typical fee is 1% per week of the total advance, but it can be as low as 0.75% per week. The fee applies for as long as the advance is outstanding, usually 20 weeks.
For example, a seller with 12 months of sales history, strong performance metrics and sales of around $100,000 every month would qualify for a 0.75% weekly fee, and Payability purchases $100,000 of their future sales.
Continuing the example, Payability would advance the seller $85,000 today. The fee works out at $750 per week, and Payability will collect the full $100,000 after 20 weeks.
If Payability collects the total amount sooner than 20 weeks, the seller receives a rebate. So, in this example, if the full amount is collected in 16 weeks, the seller receives a total rebate of $3,000 and the total cost is $12,000.
Remember that this isn’t a loan, it’s factoring – where a business sells the right to some of its future income in return for cash upfront.
How do you apply for Instant Advance?
To apply for Instant Advance, sellers need to provide Payability with business information and connect their marketplace seller accounts. This provides access to their sales history and account performance metrics.
The business information required typically includes an Employee Identification Number (EIN), company name and state of incorporation. Sellers also need to provide a photo ID and proof of address, so Payability can confirm their identity and comply with all applicable regulations.
If the seller is accepted, Payability will make an offer of how much can be advanced and the amount to be paid back. The seller can choose to take either the whole amount offered or elect to take less. Once approved, the money is transferred within a maximum of 24 hours, but very often the same day.
The second big development from Payability this year is multiple marketplace support.
In today’s ecommerce climate, many sellers are using (or planning to use) a multichannel approach. This can incorporate multiple marketplaces, such as Amazon and eBay, and maybe their own website too. As well as increasing overall sales, selling through multiple channels provides a safety net against any one channel failing, like when an Amazon account suspension comes out of the blue.
But selling through multiple marketplaces can also create cash flow headaches. Many of the marketplaces have different payment schedules, making it hard to keep a handle on when payouts will come through.
Payability’s Instant Access service smooths out the different schedules and provides a single daily payment covering all channels.
Channels for Instant Access
Instant Access was originally available for Amazon sellers, but now also covers Payability customers selling across Tophatter, Walmart, Jet.com, Newegg, Sears, Upwork, Overstock and Zulily.
Regardless of the marketplace, the process works the same. First, sellers connect the sales channel, then they plug Payability’s account details into the marketplace. Payability can then get daily sales information from each channel and pay the seller accordingly.
Instant Access is really helpful for marketplaces that pay out infrequently, such as every two weeks. There isn’t such a big benefit for channels that pay out frequently, but that’s where Instant Advance comes in.
Channels for Instant Advance
Instant Advance works for even more sales channels. In addition to Tophatter, Walmart, Jet.com, Newegg, Sears, Upwork, Overstock and Zulily, it is also available for Etsy, Shopify, Squarespace, BigCommerce and WooCommerce merchants.
Sellers can connect as many sales channels as they want, and the sales and performance data will be collected from all of them to calculate the advance that is offered. It works just as described above, whether you sell on one marketplace or ten.
What’s next for Payability?
It’s been an impressive year for Payability, with the launch of its Instant Advance product and widening support for a total of 15 sales channels. More sellers than ever can now use Payability’s services to get daily payouts or a big capital injection to grow their business.
Payability has shown a lot of innovation in its services, and heightened commitment to online sellers. They’re keeping competitors on their toes, while helping push the entire marketplace industry forward.
But there’s more to come from Payability, and we look forward to sharing news of their next game-changing product soon.
This post was sponsored by Payability.