How Populous World can facilitate invoice financing for Amazon sellers
E-commerce titan, Amazon, is a familiar name in this day and age, and not only because it recently became the second trillion-dollar company by market capitalisation. Amazon has introduced many features that are ahead of the curve, with the more prominent next day delivery feature with Prime membership.
An analysis by Cowen and Company suggests that Amazon Prime members make up to 43% of all Amazon UK purchasers. The numbers across the pond in the United States show even greater penetration of Amazon Prime, where 63% of US households have Amazon Prime, according to the United States Census Bureau. To put it into perspective, that is more than the number of households that have landlines!
With Amazon’s UK revenue growing by a whopping 20% (2017: £7.3bn, 2018: £8.8bn), Amazon sellers are enjoying increased sales. However, while this may be true, Amazon sellers may not necessarily enjoy increased profitability. There are instances when Amazon seller’s invoices are raised but disbursements have been delayed despite the goods delivered. These Amazon invoices which are not paid immediately could jeopardise the operations of a small Amazon seller as they would have trouble with their cash flow.
FIGURE 1: Examples of Amazon sellers with cash flow problems due to delayed disbursements
According to Figure 1 above, there could be times when a disbursement or payment is delayed, resulting in cash flow issues. Amazon sellers facing these issues should consider invoice financing to alleviate the short-term cash flow problem as a result of delayed payments. Invoice financing for Amazon sellers allows them to sell their Amazon invoices at a discount to receive cash in advance. When the seller receives disbursements from Amazon, they would then repay the invoice discounting firm.
As disbursement delays happen only occasionally, we at Populous World advise that invoice financing be done on an ad hoc basis. For Amazon sellers, you can sell your Amazon invoices individually with our pay-as-you-use flexible invoice discounting plan. There is no need to be locked down in a costly long-term contract, or pay fees to keep a facility open and sell your Amazon invoices only as you require to.
With a third of UK adults being Amazon prime members according to Retail Week, do not let short-term cash flow problems hinder you from maximising sales and profitability.
Contact our funding specialists at info@populous.world for more information.
Jason Tuang MBA, CA and Lou Chan, Populous World
