Growth Capital - An Alternative to Equity Financing for Your Amazon Business
If you’re currently running a business on Amazon, you’ve probably thought about a million different ways you could drive more sales. Some of the common ideas we hear from sellers include taking on additional inventory to stock up for seasonal peaks, increasing your marketing budget to boost customer reviews, and funding more pay-per-click campaigns to drive more inbound traffic.
Regardless of which opportunity (or opportunities) you pursue, you likely have equal number of options in terms of financing that growth. Some of the more traditional options include borrowing money from friends or family, taking on a personal loan, or applying for a business loan or a line of credit from your local bank. As you consider all of the options available to you, one of the biggest decisions you may need to make, particularly as it relates to an early-stage company, is whether you’re willing to give up equity, or ownership, when considering the various alternative financing options available.
Equity financing involves taking on additional investors who will own a portion of your business, in exchange for the financing you need to pursue new opportunities. For early-stage companies, equity financing may be a good option to get to scale quicker, through both the financing that the investor can offer and through the expertise and experience they may bring. On the other hand, a potential downside to this type of financing is the fact you need to give up ownership in return. For some business owners, shared ownership of the company means shared decision making across many key functions of your business. Depending on how much equity is given up, this shared decision-making model could prove to be challenging as the company matures.
An alternative to equity financing you should consider: “revenue-share” or revenue-based financing. Companies like Yardline Capital offer this as an alternative to equity financing, and often refer to it as “growth capital”. This type of financing allows you to retain 100% ownership of your business. With this model, in exchange for receiving an upfront amount of capital, you make automatic repayments based on a fixed portion of sales. When sales are up, you will typically pay back a larger amount on a dollar-for-dollar basis. When sales are down, repayment amounts will be lower.
Here’s an example of how growth capital can help your business. Say you’re a growing Amazon business, and most of your inventory is obtained from markets like China. In most cases, once you’ve figured out your supply chain, you’re likely paying the supplier for that order up front. Once the inventory is ready, it gets shipped overseas, arrives to the warehouse, and then finally gets to one of Amazon’s distribution centers – it could be more than 120 days until you get your first distribution.
Yardline helps with these cash flow challenges by offering qualified Amazon sellers up to $1 million in growth capital. Their process is easy, and the application only takes a few minutes – just visit www.yardline.com/thompsonandholt. You’ll give them some basic information about your business, which will help determine your offer eligibility. Basic requirements include having both a US bank account, and a US entity. Once approved, you can receive funding in as little as one business day!
Unlike many traditional banks and lenders, Yardline really understands e-commerce businesses, and knows how different they are from typical brick-and-mortar stores. Yardline is backed by Thrasio, which is of the largest acquirers of Amazon businesses, and one of the top 25 sellers on Amazon. Prior to founding Yardline, CEO and Co-Founder Ari Horowitz worked closely with Thrasio Co-founder & Co-CEO Carlos Cashman. They recognized that capital constraints limit business owners from making opportunistic investments in inventory and marketing. This recognition led to the creation of Yardline. With backing from Thrasio, Yardline launched, with a focus on creating a differentiated approach to thriving in the e-commerce ecosystem.
Yardline’s offerings include more than just growth capital for Amazon businesses (or ecommerce businesses on any marketplace or platform!). They also provide value-added expertise and services specifically focused on growing your sales, improving your operations, and scaling your business. Once you’ve received funding, Yardline matches you with a Seller Success Manager (SSM), an e-commerce expert who can provide in-depth business consultations, help tackle operational issues, and identify strategic opportunities to expedite growth and increase profitability. With some additional funding in hand, now you’re in a position to invest incrementally in areas such as inventory, advertising, and marketing. Bigger investments in these areas can result in exponentially higher monthly incremental revenues.
Your Yardline SSM can also provide you with a Yardline 50 Business Assessment (Y50BA)™. Developed by Yardline, this proprietary tool can benchmark your key operating metrics, from finance to supply chain, and can guide you on incremental efficiencies or opportunities to scale. You’ll see how you measure up against criteria such as listing quality, pricing, business costs, and inventory management.
Yardline partners with businesses like yours, to provide the growth capital and expertise needed to scale. Here are some recent examples:
- “I used Yardline for funding. They were pretty quick and super helpful. They were more than just “money”, they actually have Amazon sellers who know their stuff who will consult with you to help your business grow.” – Top Ranked Seller in Health & Household
- “My experience with Yardline has been nothing short of great. They were so easy to work with, got me money within days and connected me with an amazing Amazon consultant who has been very helpful. If you are looking for funding to grow your business, I highly recommend Yardline.” – Willow & Grace Designs
As a partner of Thompson and Holt, the team at Yardline is ready to help you invest in growing your Amazon business and find new ways to scale. For more information about Yardline, or to start an application for funding, visit www.yardline.com/thompsonandholt.