Payability is a company that helps online sellers solve one of their most common challenges: maintaining sufficient cash flow to run their businesses. If you have an e-commerce business with Amazon or another online marketplace from where you sell products, you need to constantly invest to keep your business running, not to mention growing. Payability provides flexible financing solutions for online sellers. This can help you grow faster, scale up, carry more products, amp up your marketing, and otherwise fund your business. Let’s look at some of the ways that Payability works to help you finance your business. We’ve also negotiated an exclusive Payability sign-on bonus for our readers. Enjoy!
Why Cash Flow is Essential to E-Commerce
Many factors influence success in the fast-paced and competitive world of e-commerce. Cash flow, however, is something that can make or break your business. When you’re selling items on a site such as Amazon, it’s easy to face a cash crunch. One common way this happens is when you make sales but have to wait to get paid by Amazon before you actually have the available cash.
Many vendors have experienced the frustration of wanting to buy needed inventory but having to wait until the next payment is released from Amazon, Walmart, Overstock, or whichever marketplace you’re using. If this occurs at a pivotal time of year such as the holidays, it can severely impact your business. One solution to this challenge is seeking a conventional financing such as a bank or small business loans. However, it’s not always easy to do this. Banks and other lenders are not always flexible about working with businesses that don’t have a great deal of experience, collateral, or high established earnings. In some ways, traditional financing is not up to date with the digital economy.
Payability, however, is a company that was created especially for the new economy and specifically with the needs of e-commerce sellers in mind. As a seller, there are several benefits to having better cash flow.
These are some of the reasons that better cash flow saves you money, keeps you in a better position with Amazon (and other selling platforms), customers, and suppliers.
Payability has two main products. Let’s look first at Instant Access, which, as the name suggests, gives you fast access to the cash you need. This is a way to get cash instantly rather than having to wait for the next payment from Amazon (or Walmart, or a variety of other platforms you may be selling from).
How can Payability do this? It’s similar to a creative financing solution known as invoice factoring. This is traditionally offered to businesses in a variety of industries such as manufacturing, transportation, and others. The financing company purchases account receivables in exchange for a fee so that businesses can get cash up front for invoices. Payability uses a similar payment structure and makes this type of financing available for individual sellers.
Put simply, Payability purchases your receivables every day and gives you cash for them right away. This means if you sell $100 worth of products on Monday, you immediately get 80% of this amount, in this case, $80. When the marketplace releases its usual payment to you, you receive the remaining 20%.
As with any financing, Payability charges for its services. However, the fee is as low as 1%. The average is 2% for most sellers and depends on your monthly sales. Compared to traditional financing, the fee is quite small. Payability also lets you earn cash back with the Instant Access card. To get Instant Access, you simply apply to Payability. If you’re accepted, you connect your seller’s account with Payability so they can track your sales and give you the cash when you make sales.
While Instant Access lets you collect payment immediately on daily sales, Instant Advance gives you access to more substantial financing. If you’re approved for Instant Advance, you can get paid now for future anticipated sales. Payability analyzes your sales history and makes an estimate on likely future sales and pays you up front.
An Instant Advance is a helpful form of financing that can put even more cash in your pocket than Instant Access. There are several ways that this type of financing is more beneficial to conventional loans. You can use it in addition to or in place of other types of financing.
Financial Advantages of Using Payability
Aside from the main benefit of enhancing your cash flow, Payability has some advantages over conventional financing. As noted, you can use it in addition to loans. However, many businesses find that it’s a more favorable alternative than other types of financing.
One of the best things about Payability is that you don’t have to worry about compounding interest. Neither Instant Access and Instant Advance are loans in the conventional sense. With Instant Access, Payability purchases your receivables and then takes its fee immediately. With Instant Advance, you pay them back as you collect your payouts from selling platforms.
Borrowing money can have a harmful effect on your credit. The same is true if you use credit cards to buy inventory. In both of these cases, your debt increases due to compounding interest. Payability helps you avoid the pressure of accumulating debt. The 1-2% fees charged by Payability are quite a bit lower than typical interest rates. Nor do they ever increase or compound. That’s why Instant Access and Instant Advance are attractive alternatives to financing options such as loans and financing purchases with credit cards. As your business grows to more than $50,000 per month, you’re eligible for even better terms from Payability.
Support and Resources Offered by Payability
Starting a new type of financing can be confusing at first. Payability has a fairly simple and straightforward application process. In addition, the company offers quite a bit of support and resources to help you understand and get the most out of the service. They also offer quite a few tips that will help you improve your e-commerce skills in general. Some of these you can take advantage of even if you’re not a customer.
Limitations and Drawbacks of Payability
No financing solution is ideal for everyone. There are a few caveats to keep in mind before you apply for financing from Payability.
Not for brand new or very small accounts. Payability is not for someone just starting out with online commerce. You need to have a sales history of at least 90 days and be making at least $2,000/month in sales to be eligible for their programs.
You need to use your money wisely. This is true for any type of financing, but when you start getting better cash flow, you need to invest it carefully. It can be tempting to think of advances as “extra” money when in reality it’s just getting your normal sales sooner. Make sure you invest it in inventory that is likely to sell. You can, of course, test new markets but do so cautiously. On the other hand, Payability offers support, education, and other resources to help you get the most out of their services.
Is Payability Right For Your Business?
You might want to consider using Payability if you are an online seller that wants to enjoy better cash flow so you can stock up on inventory and build your business faster. If your business doesn’t currently meet Payability’s requirements ($2,000/month in sales), you could use some of the tips they offer to increase sales, so you do reach that point soon. Payability is a flexible type of financing that’s a favorable alternative to traditional loans. It’s worth considering if you want to improve cash flow without taking on more debt.