Vendor Finance E-commerce Factoring for Online Sellers

VENDOR FINANCE E-COMMERCE FACTORING

Fees as low as 1-2%
Advances up to 98%
Get paid the same day an earnings statement is factored

E-commerce factoring is a vendor finance tool that speeds up payments from third-party platforms like Amazon, Zulily, Wayfair, Walmart, Rakuten, and others.

Instead of waiting weeks – or months – to see payment on your earnings statements, e-commerce vendors and merchants can get paid the same day an earnings statement or customer invoice is issued.

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1. Apply

Apply and find out how to unlock the working capital tied up in pending e-commerce vendor earnings statements.

Factor Earnings Statements

Get up to 98% of factored earnings statements the same day they are generated.

3. Speed Up Cash Flow

Get access to money earned on platforms like Amazon and Zulily immediately, instead of waiting 60-90 days on payments.

Vendor finance e-commerce factoring expedites cash flow – get same-day access to earnings instead of waiting months to get paid.

How Vendor Financing Works

How It Works

How the vendor financing process works using e-commerce factoring

When e-commerce vendors factor payments owed to them by online selling 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. The advance is provided by a vendor financing company (using e-commerce factoring) in exchange for a small fee, which could be as low as 1-2% of the promised payment amount.

Invoices and vendor earnings statements factored are typically funded on the same day – up to 98% of the face value of the invoice, with the remainder placed in ‘reserve.’ For instance, let’s say that you sell on Amazon and have a sales statement showing earnings in the amount of $62,000 but you want to access the funds right away instead of waiting 45-60 days or more to get paid.

Assuming a factoring fee of 2%, and an advance rate of 98%, here’s how it would work:

Day 1 –	You receive a sales statement or earnings statement showing you will receive $62,000 at a future date, instead of waiting, you factor it
– Same Day	Get immediate access to $60,760 – a 98% advance on your earnings – by wire transfer or ACH
	Factoring company earns 2% factoring fee, which they get when the platform has remitted payment on the earnings statemetn

Invoice Factoring Calculator

Benefits of Vendor Factoring

Top reasons to use vendor finance e-commerce factoring to speed up cash flow

Third-party online selling platforms like Amazon and Zulily make it possible for manufacturers and distributors of nearly any size to efficiently bring their goods to a worldwide marketplace. When e-commerce vendors sell on these sites, they usually wait anywhere from 30 to 60 days (and sometimes longer ) to receive payment on goods sold. For many, time spent waiting for money to take on new business or increase production equals lost opportunities to grow.

The opportunity cost for not factoring is equivalent to any and all work or orders you have to turn down or delay due to lack of working capital. It also includes any savings you could realize if you 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 costs. It unlocks the working capital owed to you from 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.

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. Using vendor finance e-commerce factoring gives you access to an immediate advance of up to 98% of the promised payment as soon as a sales report is generated.

E-commerce Factoring Scenario

Vendor finance e-commerce factoring scenario

Manufacturers, distributors, vendors, and merchants selling through e-commerce platforms like Zulily or Amazon usually wait up to 60 or even 90 days to receive payments for goods sold. This gives the platform time to ensure no money will be lost through chargebacks or returns.

However, this is a very long time to wait to revinvest in your business. Vendor factoring provides you with immediate access to the money you’d otherwise have to wait to receive.

Working capital in hand, you can reinvest in inventory, supplies, and the manpower needed take on new orders or fulfill bigger orders so you can grow your operation more quickly. It also allows you to take advantage of suppliers’ early-pay discounts and improves your ability to meet other operating expenses on time.

Here’s how the vendor finance e-commerce factoring process might play out:

The owner of the Cute Kiddy Clothes Company was just approved to sell through an e-commerce platform. Thanks to a great grassroots 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 and decided to factor the payment with a top vendor financing company 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 vendor finance challenge that e-commerce factoring is ideally suited to resolve.

Request a quote to get more information about how factoring can speed up your organization’s cash flow and empower you to grow more quickly.

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Cash flow management is critical to the success of merchants and e-commerce vendors selling on 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. But on the other hand, they might wait two months or even longer to receive payment on goods sold through those sites. This creates a low cash flow situation that impedes or even prevents e-commerce 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 can be ideal for vendors and merchants selling online on third party e-commerce platforms. Complete our one-page factoring application online – you could go from approval to your first funding in hours!