Thursday, July 16, 2020

Startup launches innovative new product that pays Amazon marketplace sellers daily

Third-party sellers are the dominant driver of sales on Amazon’s marketplace, accounting for 58% of its total and growing. We know that the pandemic, ironically, has been good for Amazon, which has reported net sales in Q1, up by 26% year-over-year, given that much of the world has reverted to ordering online. However, the payment terms offered are far from convenient. Amazon pays sellers approximately every two weeks and reserves a significant amount for possible refunds. Unfortunately, this hinders the ability of small companies to invest in growth and purchase more inventory. But of course, Amazon holds the keys to this particular car.

Payability is one such startup that provides financing to suppliers in Amazon’s marketplace although its fees are computed on gross sales, not net receivables from Amazon.

InstaPay is a startup that has launched a new product that pays Amazon sellers on a daily basis. The new offering comes at a time when Amazon sellers are experiencing an enormous load due to the pandemic, but the Amazon marketplace terms have not sped up to allow them to meet demand.

The current two-week lag time creates a gap in cash-flow – because sellers usually have to pay their vendors in advance. InstaPay’s new product potentially solves this problem, allowing sellers to be able to earn more, even with the added InstaPay fees.

The service funds 50% to 80% of sales and charges 1% to 2% of sales volume per funding. When Amazon pays the vendor, InstaPay automatically deducts the outstanding balance. This means small companies can invest in growth and purchase more inventory.

Sam Bokher, COO, said in a statement: “Due to the global lockdown, people have ramped up online purchases and more companies have flocked to Amazon and other eCommerce platforms to sell online. We launched this new service to provide businesses with an opportunity to grow simultaneously with the marketplace, rather than with a two-week delay.”

The product was inspired by an unlikely industry. Prior to this, InstaPay had been providing transportation and trucking companies with working capital, with flat-rate accounts receivable financing and same-day payment.



from Amazon – TechCrunch https://techcrunch.com/2020/07/16/startup-launches-innovative-new-product-that-pays-amazon-marketplace-sellers-daily/

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