This whole “build a brand” and sell physical products thing just got real. Until this point in your entrepreneurial journey, it was all theoretical. But now it’s time to order some inventory so you can finally launch.
If you’re like most of the brand builders we know, you’re bootstrapping this endeavor. Up until this point, most of your investment has taken the form of thinking, planning, making decisions, interacting with your ideal customers, and maybe even a little bit of sweat as you lay the groundwork.
Putting money behind your dream might feel more than a little terrifying. The stakes are high as you bet on your product idea, your brand, and yourself, if we’re being honest here.
Some entrepreneurs freeze here.
Some start wondering whether they could survive on ramen noodles long enough to save up for this investment. Others rummage through their homes to see what they could sell. A few look into crowdfunding. Many strategize about side hustles using their skillset so they could get the money for their first inventory order.
All of these strategies can work, of course.
Here are a few strategies you may not have considered that could make funding your business faster and easier. As an entrepreneur, you’ve taken ownership of a problem, created a product to solve that problem, and you’re doing it all with the driving passion to serve people through your business. The strategies you’re about to discover came about as other entrepreneurs went through that same process. They offer creative solutions for a common problem entrepreneurs face, serving startup brands so they can launch and grow.
Here are four places you can look for funding:
Million Dollar Brands walks entrepreneurs down the path from “idea” to “real business” by building the four crucial pillars of business. You’ll discover your people, follow a proven plan, choose your first winning product, and learn how the processes needed to build a million-dollar business you can sell (if you want to!).
We believe in the brand builders who follow this plan so strongly that we want to invest in some of them. That’s why we created the Million Dollar Brands Scholarship.
Here’s how it works:
We partner with a group of accredited investors who want to invest in startup brands they believe in for a share in their ownership. They know their funding can change the trajectory of a new business. Even more, as a group of advisors, they can help brands become so wildly successful that everyone wins. Together, the Fund and the brand founder can build a brand with the kind of “unfair advantage” that creates astoundingly good results. You can apply for funding here.
Amazon makes money when you make money, so it makes sense that they’d create a way to help sellers get the funds they need to grow. The Amazon Lending program is affordable and fast, but there’s a hitch: you’ve got to be making consistent sales on Amazon before you can qualify.
So, while that’s a resource you might want to consider later, it won’t help you with your first order.
When you build some momentum as an Amazon Seller, Amazon Lending notices. They’ll extend loan invitations to sellers who prequalify for funding. You can check your eligibility by logging into Seller Central, where you can see whether you’re already prequalified.
If you qualify, you’ll receive an invitation to apply for funding. You can complete an application within minutes. You’d choose how much to borrow and how long you need to pay it back. Amazon Lending will make a loan decision within about five business days. There’s no penalty for prepayment, and they deduct your payments automatically from your Seller Account.
Amazon Lending can be a good solution for some sellers, but it has drawbacks. The loans typically have a short payback period. If you just need cash until the next payment cycle, that may work well. But if you need a longer-term loan, you’ll need to look elsewhere.
The Small Business Association and even your local bank or credit union may be able to help. But in many cases, the underwriters lack a thorough understanding of ecommerce, and they aren’t sure how to evaluate the risk of lending to you.
SellersFunding.com saw this gap in the marketplace and created a solution for online sellers seeking funding. Their proprietary sales forecast tool helps to assess whether a long-term loan is feasible - and it runs those calculations really quickly. Where many funding sources can take weeks or months to distribute funds, SellersFunding’s funding timeline is just a couple of days. Applying for funding there will not impact your credit score, and there is no penalty for prepayment.
Kudos to you for asking, “How can I fund my inventory?” rather than just saying, “I can’t afford it. Oh well.”
Of course, inventory isn’t the only expense you’ll face as you build your business. Advertising, marketing, employees or contractors, expert accounting and legal counsel all cost money. None of them are frivolous or optional expenses, either. You’ll need to sort out how you’ll pay for everything your business needs. Once you’re making a profit, it’s a lot easier to pay your business expenses from your revenue. But even if you’ve had the sentiment that “debt is bad” drilled into your head, you might want to reconsider that stance. In some cases, it makes a lot more sense to borrow funds for recurring expenses (like inventory) once you have a proven sales history. Then you can free up your cash to invest in multipliers (tools, team, and tactics that can yield exponential growth).