Stock Finance for eBay Stores
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Stock Finance for eBay Sellers
As an eBay seller, you may need stock finance to boost your cash flow and ensure success for your online business
eBay offers online retailers a fantastic opportunity to reach millions of potential customers worldwide. Thanks to the platform's established reputation, popular mobile app and easy-to-access Seller Hub, eBay provides both ecommerce businesses and brick-and-mortar stores the chance to sell products quickly online without the hassle of building and maintaining your own website.
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Online retailers will know that margins can be tight, and cash flow is a common issue for anyone who sells products on eBay. Without the necessary cash flow, you may not be able to invest in the stock you need to keep your store active and growing on eBay. This is where stock finance can help.
If keeping your inventory stocked is a constant struggle, then ecommerce business finance can help ease the pressure and give you access to the funds you need to buy stock. There are many reasons why eBay sellers may benefit from stock finance. For example, if your business relies on seasonal sales, then you will notice cash flow is inconsistent and, therefore, you may not have the funds to buy the stock you need ahead of busy periods. Many businesses are still feeling the pinch of supply chain issues brought on by economic stressors, including the coronavirus pandemic and Brexit.
So, whether you need a short-term bridging loan or long-term support, stock finance can help keep your inventory available and ensure your customers are satisfied all year round. Let's take a closer look at eBay's own funding product and why it may or may not be the right choice for your business.
About Capital for eBay Sellers
In response to the recent economic downturn, eBay released its own finance support package for small businesses using its products to sell products online. Capital For eBay Business Sellers is provided by YouLend and gives selected sellers the opportunity to apply for business loans between £500 and £150,000 over a 6-12 month repayment period. These loans are repaid as a fixed percentage of sales, which eBay takes from your account.
Speaking about the launch of Capital For eBay Business Sellers, Murray Lambell, eBay's UK General Manager said the announcement comes as a response to the lack of support available to small businesses experiencing difficulties in the wake of COVID-19: "Capital for eBay Business Sellers is intended to help plug this gap, giving small businesses quick access to a range of financing options."
So, how does eBay's finance support work? Firstly, in order to tap into eBay's funding, you must be among the platform's Eligible Sellers, which you can find out by logging into your account. This means that you cannot apply for finance from eBay without meeting their criteria first, so this may not even be available to many new businesses.
Equally, if you sell products across multiple platforms, such as eBay, Amazon and your own website, this particular finance will only take into account your sales on the former - so unless eBay is your dominant platform, this loan might not cover all the financial support you need to buy stock for your business, since the platform uses its own data to make calculations on your earnings and does not take into account the full business accounts.
Since Capital for eBay Business Sellers is a short-term product, rates can vary greatly. We understand rates start from 8.9% APR, but you are more likely to get 18.9% APR., making this a very expensive way to borrow the cash you need. If you are planning to invest in your stock, you will need to take into account the time it takes to sell your products and receive the payments, so if your sales peak during a certain seasonal period, then this may end up costing more than it's worth.
Capital For eBay Business Sellers is just one ecommerce finance product available to those who sell on the platform. It always pays to explore the full market before determining which solution is right for you. That's where Rangewell comes in.
eBay Stock Finance with Rangewell
Rangewell is an independent finance broker with a team of experts who work with ecommerce businesses like yours to access the best possible finance available to them.
At Rangewell, we search the whole of market, including a number of specialist ecommerce lenders, so you can feel safe in the knowledge that you are getting the right finance for your business - both now and in the future.
If you have sought finance before then you will know that traditional lenders often find it difficult to offer good terms to online sellers as you may not have the assets that they typically need for securing finance, such as property.
However, when you work with a broker like Rangewell, we help you to assemble a comprehensive application that shows your business as a whole - not just your eBay sales. From determining the value of your existing inventory to looking back on old accounts and even recognising the value of any other assets, we will paint a picture for the lender so they can make the best possible decision for you.
In some instances, a business line of credit may be the best option for you as it is a flexible funding product that allows you to draw funds when you need them - ideal for those online sellers who experience inconsistent sales. This credit is typically used for business running costs, such as paying fees, staff wages and warehousing costs. It acts very much like an old-style overdraft - although it comes from a lender, not your bank.
A line of credit provides a pre-approved reserve of credit that you can call on as you need to at short notice. It’s a good option for ecommerce businesses that need short-term cash to cover expenses, especially the acquisition of new inventory. With this product, you pay interest only on the amount used - ensuring you avoid fixed costs and commitments typically associated with a traditional term loan.
So, if you are ready to find out if a business line of credit is right for you, or perhaps a merchant cash advance or a longer-term loan, then get in touch with Rangewell today. Whether you are just starting up or have an established ecommerce operation, we can help.
With Rangewell on your side, you can rest easy knowing the finance is suited to you and your business. Contact Rangewell today to speak to one of our specialist advisors about stock finance for eBay sellers.
Last update: 23 July 2023
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