This FBA sellers guide is a must-read for Amazon sellers. Amazon Seller Lending Program is perfect for ambitious sellers and business owners.
It helps to increase the business ten folds through a short-term loan. Amazon does not offer this to every seller. The platform handpicks the sellers with the best performance indicators.
You must read this FBA seller’s guide to begin your journey towards the Amazon Seller Lending Program.
What is the Amazon Seller Lending Program?
Have you ever heard of the Amazon Seller Lending Program? Most probably not. Amazon offers this secretive program to high-performing sellers. It is a short-term business loan that helps sellers scale their sales on Amazon.
You need to show rapid growth if you are interested in an invitation to the program. There is no other way to get into the program. Amazon wants to empower sellers through this program. So, they can scale their sales and expand in a short period.
The Purpose of the Program
Nothing is possible without money, and finance is essential for all Amazon sellers. You need inventory and marketing services to expand your business on Amazon.
The Amazon Seller Lending Program gives a seller resources to scale their sales. It is beneficial for everyone on Amazon. Sellers will receive funds for business expansion, and Amazon will earn money from high sales.
However, Amazon is the bigger benefactor of the lending program. If sellers scale their sales, the platform receives more money.
So, Amazon invests in small business owners to improve their growth rate.
These people will also trust Amazon more in the future due to the short-term loan. So, the purpose of the program is to empower the sellers.
When Is It Good for You?
The Amazon Seller Lending Program is ideal for you if you need funds for inventory financing. Amazon does not offer this program to every seller. If they are offering this to you, it means you are the perfect candidate for the job.
The invitation is proof that the program is ideal for you, and there is no need for any other validation.
However, you need to learn all about the program before accepting the invitation. The program is suitable for your business if you have the business skills to scale your sales. Accept the invitation and climb the ladder on Amazon!
When is it Bad for You?
The Amazon Seller Lending Program does not help you invest in any part of the business except inventory financing. Sellers must invest in every service when they are expanding.
So, it is an unsuitable program for you if you want funds for marketing. You can purchase any Amazon service with a short-term loan. If you need funds to buy services such as Amazon listing optimization, forget about the program.
Facts and Figures
Amazon Seller Lending Program does not disclose all of the facts and figures. Yet, there are many generic figures available about the program.
We have created a compilation of facts and figures for those interested in the loan. The information below will help you to learn more about the program.
You can check if the program is right for you with the relevant facts and figures. So, it keeps you prepared if you receive an offer in the future.
Eligibility is the most vital factor of the Amazon Seller Lending Program. You need to learn about the eligibility requirements for an Amazon loan.
It is necessary to accomplish several goals if you want an invitation to the program.
There is not a chance that you can receive an offer without completing the following objectives:
- Sellers must have a 12-month history of selling on Amazon. It shows the company that you are not looking for a short-term profit. Instead, you can demonstrate your commitment to the platform with a year-long history.
- In 12 months, you need to have a total sales of $10,000 to qualify for the program. These sales show Amazon that you are capable of selling your products. So, maximize your sales if you want an invitation to the program.
- Amazon looks at the customer satisfaction metrics of sellers before sending an invitation. Therefore, a seller needs to have positive reviews to be eligible for the program.
- Serious customer complaints also decrease the reputation of a seller. Therefore, Amazon does offer the program to sellers that do not value consumers. However, you will not receive an invitation if you have seriously upset a consumer. So, resolve consumer complaints at any cost.
- Copyright and trademark issues also make a seller ineligible for the program. Always create original content for your listings.
- Compliance with Amazon listing guidelines is the last eligibility requirement. There may be more hidden requirements for the program. Good Amazon listing services help you to follow the guidelines.
The loan amount depends on the business situation of the seller. Amazon offers loans from $1000 to $750,000.
Each seller does not need the same amount of money to expand the business.
So, Amazon wants to incorporate everyone into the program. Small and big sellers on Amazon can both benefit from this innovative program.
Amazon also assesses sellers before offering any amount. If your business plan is perfect, you can receive a higher amount.
Loan Interest Rates
There is not much information available on the loan interest rates of the Amazon Seller Lending Program.
The secrecy makes it difficult to learn anything about the loan. Previous and current Amazon sellers say that the interest rates range from 6 % to 16 %.
It most probably depends on the business situation of the sellers.
Loan Term Length
The Amazon Seller Lending Program has three different loan term lengths. You can get a loan for 3, 6, 9, or 12 months.
So, the length is capped at 12 months, and Amazon wants quick results with this loan.
A yearly loan is not a long-term investment, and it saves Amazon from losing money.
If the business is not successful, Amazon will learn about it. Therefore, you can only get a loan period of up to 12 months.
How to Use the Program?
Amazon does not allow the sellers to use the loan for any purpose other than inventory financing. So, you cannot use the program for any marketing purposes.
It only helps you to expand or manage your inventory. You still need personal funds for every other part of the business.
For example, you cannot use the program funds for Amazon listing optimization services. It is a severe disadvantage of the program.
Advantages of the Program
The Amazon Seller Lending Program gives sellers a short-term loan. Sellers can optimize inventory with these funds.
Therefore, the program provides several advantages to sellers on Amazon.
- You can maximize your business sales with the use of a loan. The additional funds will help you to increase your inventory. So, you will sell more items on Amazon. Never suffer from inventory problems with this convenient program!
- The Amazon Seller Lending Program does not require extensive documentation. You already submitted a lot of information when creating an Amazon account. So, there is no need for any other documentation.
- Amazon charges low-interest rates compared to banks. The repayment is not as difficult as it is with banks. Amazon deducts the money from your account without any hassles.
- Bank loan programs or other loans charge many types of fees. Amazon understands that sellers need a profit margin to continue the business. The program facilitates the sellers and only charges minimal fees. There are no hidden costs of the Amazon Seller Lending Program. So, the loan process and low expenses make the program convenient for sellers.
Disadvantages of the Program
Do not be overwhelmed by the advantages of the Amazon Seller Lending Program. Our FBA sellers guide gives you the full view.
However, the program has several disadvantages that make it unattractive for Sellers.
- The Amazon Seller Lending Program decreases the independence of sellers. You rely on Amazon for funds to replenish and expand your inventory. Many sellers refuse the invitation because they want financial freedom.
- Inventory financing is only one part of selling on Amazon. Funds are essential for every business activity. So, there is no point in increasing inventory when you cannot afford marketing. Sellers need to increase funding in every aspect of their business if they expand. You cannot even get Amazon listing optimization with this loan. Therefore, an investment in only inventory management is not helpful.
- Amazon directly deducts funds from the seller’s account without any delay. It can create financial problems as there may not be enough funds for other services. Moreover, you cannot take out the funds if you need to pay Amazon.
- Your business is collateral for Amazon till you repay the loan. The failure to repay the loan will cause Amazon to seize your inventory. So, the loan is not worth the risk for many sellers.
The Amazon Seller Lending Program offers an excellent opportunity for business growth.
However, Amazon sellers need to prove their business skills to receive an invite. One prosperous year shows your capabilities to Amazon. It will encourage the company to invest in your business.
Yet, the short-term loan is only suitable for inventory management. You cannot buy any Amazon services such as Amazon listing optimization.
The restrictive nature of the program only makes it ideal for inventory financing.
So, if you want help with your inventory, accept the invitation to this program!