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How to Optimize Your Amazon Cash Flow to Grow Your eCommerce Business Faster

As an Amazon seller, it’s a given that you want to grow your eCommerce business faster. After all, the very reason you got into selling on Amazon is that it provides a scalable business model that can be streamlined via automation and strategic software platforms.

But when it comes to your cash flow, how confident are you that it’s being managed optimally?

If you sell on Amazon, you typically have to wait two weeks before any earnings are reflected in your bank account.

Having to wait such a long time to receive your money can clearly cramp your style, not to mention that it can hamstring your ability to build your business as quickly as you’d like.

That’s why we’re tackling the topic of cash flow today. Read on to discover how to ensure you have a solid enough cash flow to scale your business at the speed you’d like — and to protect yourself from ever running into the countless problems that poor cash flow can cause.



Let’s start with a simple explanation of cash flow


Simply put, cash flow refers to the net amount of cash and cash equivalents coming in and out of a business over a set period of time.

Cash flow can be positive or negative, depending on the overall health of a business.

For example, if you had $100,000 in your business bank account at the start of January, you’d have a positive cash flow if you had more than that in your account at the beginning of February, and a negative cash flow if your balance were less.

Clearly, a healthy business would see growth in its cash supply month-over-month; a business that was suffering would see negative cash flow in their account, meaning steps should be taken to improve the way the business manages its income and expenditures.



Why cash flow is so important for Amazon sellers


Everyone knows that cash is king in business. Cash-on-hand allows businesses to reinvest in themselves and grow, such as by:

• replenishing fast-selling and profitable inventory

• hiring labor

• purchasing automation software to expedite operations and streamline tedious tasks

• expanding their product lines with new items

• marketing and advertising with Amazon Sponsored Products or PPC ads


Cash in the bank also allows you prepare for worst-case scenarios by enabling you to create an emergency fund should disaster ever strike.

Businesses without cash, on the other hand, won’t survive.


That’s why cash flow is such a vital metric for Amazon sellers:

It lets you know whether you need to take action to improve your monthly income and expenses, such as by requesting better credit terms from suppliers, trying to increase your average order value, and/or attempting to cut costs wherever you can.



Amazon seller cash flow optimization 101


The first thing you need to do to get your cash flow in order is understand it, and you can do that by using simple math to calculate it.

We recommend keeping a spreadsheet handy so you can monitor your cash flow weekly, monthly, and annually to know how your business is doing over different time periods.

You can use this very simple cash flow spreadsheet from Shopify as a model (click File, and then click Make a copy to get your own editable template).


Once you have an understanding of your current cash flow, then you can take steps to improve it.

We recommend creating a cash flow budget with all your monthly income sources and expenses so you know exactly how much money you have on hand to allot to things like:

• inventory restocking

• software subscriptions

• labor

• overhead

• advertising and marketing



How to overcome Amazon’s two-week lag in paying you out


Sure, there are plenty of measures you can take to optimize your cash flow, as we discussed above, such as cutting sourcing, labor, marketing, or other monthly costs, negotiating better payment and/or credit terms from suppliers and manufacturers, and paying close attention to your inventory stock levels to avoid over-ordering and putting a dent in your cash on hand.


But when it comes to getting paid by Amazon, sellers seemingly have no choice but to remain victim to the two-week delay in receiving their rightful earnings.


But is that really the case?


Thankfully, Amazon sellers have a solution for speeding up the rate at which they get paid for the sales they make: Using Payability to get the cash from their Amazon sales the very next day after sales are made.


Payability offers special financing for Amazon sellers, enabling them to receive the money they’re owed by Amazon the day after they make sales.

Sellers are charged a small fee of 2% to get their money almost instantly, allowing them to reinvest their earnings into their businesses with immediacy.


And if you happen to be an customer, Payability makes their terms even more generous:

A special rate of 1.75% to get your Amazon earnings upfront, which is a 12.5% discount from their typical 2% fee.


By using a service like Payability, you’ll be able to make high-impact business decisions more readily, instead of having to wait for the marketplace powers-that-be to pay you out.

That gives you the freedom to make savvy business move on the daily, so you can invest in new products, test the efficacy of different marketing and advertising tactics, hire labor, and/or invest in powerful software solutions like automated repricers and inventory management platforms to streamline your operations, accelerate your sales, and optimize your listings for profitability.



The bottom line on optimizing your Amazon cash flow


So, there you have it: A cash flow solution that can easily pay for itself when you consider how quickly you’ll be able to accelerate your growth by gaining access to your revenue the very next day.

Instead of waiting two weeks for Amazon to pay you your rightful proceeds for your hard work, we encourage you to check out Payability — and to take advantage of the sweet deal they’re offering customers by signing up to our powerful repricing platform today. | Free 14 day trial