This blog post is by our friends at Payability
The 2017 holiday shopping season is here and it’s predicted to set new records. Chances are you’ve already stocked up on inventory and put the finishing touches on your Q4 strategy. While a holiday shopping rush is vital to almost any Amazon business, it’s easy to lose sight of key opportunities for continued growth after the holiday season has come and gone. When you start the New Year off strong, you can set your Amazon business up for an even more successful 2018. Here are some leading strategies top sellers use to take their holiday selling momentum into Q1 2018 and beyond.
Understand the Post Holiday Rush
January isn’t just about returns anymore. While holiday gift returns still need to be built into your Q1 strategy, Amazon sellers also need to prepare for an influx in sales as customers spend the cash and Amazon gift cards they received over the holidays. Experienced sellers will often raise prices mid-December as competitors run short on inventory. In January they may lower prices in order to move excess inventory faster and avoid paying Amazon’s long-term storage fees. These fees kick in on February 15, 2018. Depending on the type of inventory you carry, you may be able to rebrand and repackage a holiday gift item as a Valentine’s Day gift and capitalize on yet another holiday as you dodge additional storage fees.
Check Your Listings
One great way to kick off the new year is to check that all of your listings are accurate and up-to-date. Make sure your photos are high quality and that product details haven’t changed since you first created the listing. It can also be beneficial to do a listing audit of your biggest selling items to keep the sales momentum going well into 2018.
Consider Amazon FBA
2018 may be prime time (no pun intended) to consider FBA. Having Amazon manage your orders, returns and customer inquiries may give you more time to focus on sourcing, adding new products or your 2018 pricing strategy. For more profit-driven inventory management strategies that you can put into practice right now download this free eBook.
Explore Your Financing Options
The basis of being a profitable seller is simple. You buy inventory, sell quickly and repeat steps one and two as many times as you can. However, this seemingly straightforward process is often easier said than done. No matter if you’re a six figure seller or just playing with the idea of selling on Amazon, you’ve likely lost sleep over financing inventory at one point or another.
When sales are rolling in and you have to refill inventory right away, Amazon’s two week payment gap can be incredibly stressful. The best way to decide how to deal with these nerve-racking cracks in cash flow is to know your options. In order to help you get on track for a prosperous 2018, we broke down some common financing strategies sellers use to cover inventory.
- Credit Cards: For sellers just starting their Amazon businesses, credit cards can be a good financing option. They’re fast, familiar and already in your pocket. If you’re able to pay them off right away, you can avoid paying interest and even cash in on some bonus travel points or cash back offers. However, if sales are really ramping up, your credit limit may not be enough to cover the inventory you need to scale your Amazon business. Once you’ve already maxed out your credit cards, you won’t be in a position to buy more inventory should sales start taking off. On the other hand, if you aren’t able to turn inventory as quickly as you predicted, you could be on the hook for a large credit card balance that continues to gain interest.
- Savings: If you have enough money in the bank to buy the inventory you need, there are pros and cons to using it. Taking from savings allows you to fund inventory free of interest or the hassle of applying for a loan. Once your savings runs out, however, there won’t be additional funds to buy more inventory and grow your business should sales take off faster than expected. Also, once your savings is gone you won’t have the money you may need to cover emergency and unforeseen expenses.
- Traditional Loans: If your business has years of sales history and multiple sources of income then you could be a candidate for a traditional bank loan. If you’re just starting out, traditional loans may not be an option. Regardless of how established your business is, small businesses are rarely approved. Even if you are lucky enough to be approved, the approval process is incredibly time consuming. So you may miss out on sales while you’re waiting for the money to hit your account.
- Amazon Loans: Amazon recently began offering select marketplace sellers loans. However, sellers can not predict when an Amazon loan will be offered or apply for one. If you’re selected, you will receive an offer in your Seller Central dashboard. This is a one-time offer with a set expiration date. The terms are non-negotiable. Payments and interest will automatically be taken out of your Amazon earnings.
- Payability: If Amazon’s two week waiting period is keeping you from scaling your business, Payability has a solution. Payability forwards Amazon sellers 80% of their Amazon earnings every business day at a 2% flat-rate fee. The remaining 20% is kept in a reserve to cover returns and chargebacks and released to the seller on Amazon’s regular 14 day payment schedule. Payability allows sellers to buy inventory at the speed in which it’s selling without taking on the risk of a loan or dipping into savings. With daily payments, Amazon sellers can immediately invest their earnings back into their business and grow at a faster rate.
Black Friday, Cyber Monday and Prime Day are key dates for almost every seller. Customers are eager to buy and sellers spend ample time planning and stocking up on inventory for these very days. However, with daily cash flow, you can scale your business every single day of the year.
Cash flow gives sellers the competitive advantage they need to win the Buy Box, outrank competitors, negotiate with suppliers and much more. Visit Payability.com to see how thousands of top sellers are growing their businesses with the help of daily payments and how you can too. New customers referred by TaxJar will receive a $100 credit.
About the Author
Victoria Sullivan 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.