Factoring speeds up cash flow for e-commerce merchants, service providers, developers and vendors selling online.
Third party e-commerce selling platforms make it possible for service providers, developers, merchants and vendors of nearly any size to efficiently bring services and goods to a worldwide marketplace. When individuals and businesses sell online on platforms like:
- Amazon, Zulily, Etsy, Poshmark
- Google Playstore or Apple iStore
- Professional services distribution platforms such as Fiverr, etc.,
— they generally wait anywhere from 60 to as many as 90 days (or even longer) to receive payment on goods or services sold. For many, time spent waiting means lost opportunities to grow while they wait to receive the money they have already earned, working capital they need to take on new business, produce bigger orders or keep up with organizational expenses.
The opportunity cost incurred is equivalent to any and all work or 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.
E-commerce factoring is a supply chain finance tool that eliminates opportunity cost by funding the working capital owed by third party platforms as soon as a sales report or earnings statement is issued, instead of 60 – 90 days later when the payment is actually remitted by the online selling platform.
When you factor payments owed to you or your business by e-commerce platforms, you can receive an advance of up to 93% of the sales or earnings statement within 0-2 business days (instead of 2-3 months!) These promised payments are equivalent to customer invoices and represent an asset your business may be able to leverage to expedite cash flow and grow more quickly.