In a move that will strengthen the partnership between Amazon India and its sellers, Amazon launched its Seller Lending Network (SLN) that is going to allow its sellers to seek loans from multiple third party lenders. Aditya Birla Finance, Bank of Baroda, Capital First, Capital Float, Flexiloans, and Yes Bank have joined this campaign with Amazon and the initiative is welcomed whole heartedly by the sellers as with this launch, they can perform all loan-related activities. This means that the sellers can avail loan offers which can be viewed on Amazon and can apply for loans and easy/automatic loan repayments by linking their Amazon sale which is placed on Amazon’s Seller Central portal for easiness.
The best part about this initiative is that the complete process is very easy and quick on road as loans can be availed online via an online application process which quickens the process of approval taking an estimated 2-3 days for completion.
Another point worth noting is that the idea of powering the sellers with less working capital was put into place from 2016, but Amazon observed a need to increase their focus on this part.
This can be looked as a step to strengthen Amazon India footprint in India as more and more sellers will be attracted to Amazon which has been fighting for market leadership with homegrown player Flipkart.
India will be the first geography for Amazon where it has launched such a seller platform and interestingly, Amazon recently invested Rs 144 crore into Capital Float which is a Non-Banking Financial Centre that lends to small and medium businesses and also runs its own lending marketplace model. Amazon will be using its own technology for analysing seller data on its platform with an algorithm that predicts the seller’s capability to repay based on their historical performance which can be transformed in an intelligence that the banks can use and based on the seller’s historical performance in the marketplace have the confidence to lend loan.
Amazon India’s seller base has also grown to over three lakh sellers which has led to this focus driven improvement in the scheme launched in 2016.It is also important to take a look at the various funding options that are now available to the sellers.
There is no question that borrowing money from a family member or friend can be the fastest and cheapest route with no effect on your credit score.
Small Business Loans for which you must have a credit score that’s over 700 and business years established along with financials, and you may need to bring along a detailed business plan (and be able to explain it with enthusiasm) to convince the lender that you’re a good bet.
Crowd funding for online sellers can be an opportunity to secure sales ahead of manufacturing if you have a desirable Private Label product, an established brand and strong social media presence.
Another option forsellers is to speak with your current suppliers to see if they would extend their credit terms to you, therefore allowing you to pay (for example) net 90 days instead of net 30, also extending your credit terms could certainly have a positive effect on your cash flow but isn’t often a silver bullet.
Pay ability, which is designed specifically to advance payments for Amazon Sellers without a loan or credit card involved, thus, providing much needed cash flow and Amazon financing looks at your past Amazon sales history and seller health to qualify your business for invoice factoring. This eradicates the use of past year of sales for a wholesome image.