Invoice Factoring for Vendors and Merchants Selling Online

E-commerce vendors, app developers and similar third party suppliers can expedite cash flow by factoring payments owed them by selling platforms, instead of waiting weeks – or months – to get paid.

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How Factoring Expedites Cash Flow for Vendors and Merchants Selling on E-Commerce Sites

Third party e-commerce selling platforms like Amazon and Zulily make it possible for manufacturers of nearly any size to efficiently bring their goods to a worldwide marketplace. When vendors sell on these sites, they usually wait anywhere from 30 to 60 days – or even longer – to receive payment on goods sold. For some of these businesses, time spent waiting means lost opportunities to grow while they wait for the working capital they need to take on new business or produce bigger orders.

The opportunity cost incurred by these vendors and merchants is equivalent to both any orders they must turn down or delay due to lack of working capital as well as the savings they could realize if they had the working capital on hand to take advantage of supplier quick-pay discounts.

Invoice factoring is a supply chain finance tool that eliminates opportunity cost, by freeing up the working capital owed to a merchant by third party platforms like Zulily and Amazon as soon as a sales report is issued, instead of 30 or 60 days later when the payment is actually remitted.

When vendors factor payments owed to them by e-commerce platforms like Amazon and Zulily, they can receive an immediate advance of up to 98% of the promised payment as soon as a sales report is generated, in exchange for a small fee, which may be as low as 1% of the promised payment amount.

You can use our supply chain factoring calculator to see how much working capital your organization could access immediately instead of waiting 60 days or even longer for third party payments to arrive. Even though you might not actually invoice platforms for payments earned, these promised payments are equivalent to customer invoices and represent an asset that your business can leverage to expedite cash flow and grow more quickly.

Supply Chain Factoring Calculator

Use our supply chain factoring calculator to estimate the amount of working capital that could be available to your organization immediately. Feel free to reach out to us if you have any questions or want us to walk you through the process so you can determine whether factoring would be a good fit for your business.

Opportunity Cost Calculator

Use our invoice factoring calculator to determine whether factoring receivables could expedite cash flow in your business.

  • Your Current Total Accounts Receivable
    $1,000 $5,000,000+
  • Your Average Customer Invoice Amount
    $0 $250,000+
  • Advance Rate for Factored Invoices (Advances usually range from 85-98%)
    85% 98%
  • Factoring Fee (Factoring fee usually ranges from 1-5%)
    1% 5%

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  • Expedite working capital tied up in customer invoices, without waiting for customers to pay Working Capital Unlocked $0
  • Average Factoring Fee $0

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The Supply Chain Factoring Process for E-Commerce Vendors and Merchants

Manufacturers, distributors and merchants selling through an e-commerce platform like Zulily or Amazon usually wait up to 60 or even 90 days to receive payments for goods sold through these third party sites. Invoice factoring is a tool that gives these vendors immediate access to the money they would normally have to wait to receive.

Working capital in hand, these vendors can reinvest in inventory, supplies and manpower needed take on new orders or fulfill bigger orders so they can grow more quickly, take advantage of suppliers’ early-pay discounts, and improve their ability to meet other operating expenses on time.  Here’s how the process might work:

The owner of the Cute Kiddy Clothes Company was just approved to sell through an e-commerce platform. Thanks to a great grass roots marketing effort and social buzz from previous customers, the first month’s e-commerce sales were even higher than predicted.

Based on a better than expected first month, projections for sales in the second and third month are now more than originally expected. In order to create the inventory needed to meet projections and grow even more quickly than they first anticipated, the Cute Kiddy Clothes Company determined they couldn’t afford to wait 60-90 days for the e-commerce site to remit payment to them, and decided to factor the payment with DB Squared instead.

With the working capital they needed in hand – instead of on the books – they were able to pay suppliers and add additional workers to produce enough goods to meet demand on the e-commerce platform for the next two months. This is a great example of the type of supply chain finance challenge that invoice factoring is ideally suited to resolve.

Complete the quick quote form below or contact us at 866-855-3640 for more information about how factoring can speed up your organization’s cash flow and empower you to grow more quickly.

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Invoice Factoring for 3rd Party E-Commerce Vendors and Merchants

Cash flow management is critical to the success of any business, and especially so for those that need to spend money to make money, such as merchants and vendors that sell through sites like Amazon and Zulily.

On one hand, vendors need to reinvest quickly in inventory, supplies and labor to produce the goods sold through third party e-commerce sites like Zulily and Amazon; but on the other hand, they might wait two months or even longer to receive payment on goods sold through those sites. This can create a low cash flow situation that impedes – or even prevents – vendors from growing as quickly as they desire.

Invoice factoring is commonly used as a supply chain finance tool to speed up cash flow, and may be ideal for vendors and merchants that sell on third party e-commerce platforms like Amazon, Zulily and others. Contact us at 866-855-3640 to find out more about our supply chain financing solutions or complete our one-page factoring application online – you could go from approval to your first funding in hours!