Amazon spent 15.69 million! The sequelae of the account being blocked due to huge sales are gradually showing, how to solve the financial dilemma?

Amazon spent 15.69 million! The sequelae of the account being blocked due to huge sales are gradually showing, how to solve the financial dilemma?

The Matthew effect also exists in the Amazon seller circle. For Amazon sellers, rising product sales can easily motivate sellers to invest more money, time, and energy to drive Amazon's business to better and better. When a product sells well, sellers will naturally stock more and be more motivated to explore new products.


But before expanding the business, sellers need to consider many factors, among which capital is an essential key factor. Developing new products, promoting new products, and preparing inventory all require a certain amount of capital investment, so without capital, it is difficult to make any progress.
 
It takes a certain amount of time from the buyer placing an order to confirming receipt and then Amazon transferring the money to the seller's account. On the supply chain side, sellers need to constantly replenish stocks to ensure sufficient inventory and timely delivery. Behind this, sellers need to have a certain amount of funds to support business operations. So how can sellers raise funds without affecting existing business operations?
 



Reserve funds from profits



Reserve more money from profits not only to replenish existing products, but also to finance new product operations. While ensuring the replenishment rate of existing products, reserve 10% or 15% of the profits for new product development in case of emergency.
 
Many sellers tend to invest all their profits in a product when it sells well. When they come across a good new product and want to expand their business, their money is gone. Therefore, it is necessary to allocate profits reasonably and reserve funds for business expansion from the profits.
 



Set up a product development deposit account



Sellers can store the above-mentioned reserved funds in a deposit account, and the funds in this account will be used specifically for business expansion and development of new products.
 
You can make a profit assessment for your business and then distribute the profits reasonably according to these percentages. It should be noted that the funds for new product development and business expansion should be counted as operating expenses.
 
Once your bank account starts growing, you can simultaneously start researching and planning your next product without taking your focus away from your existing products.
 
If you find that it’s taking too long to raise funding for a new product, this may be telling you that your existing product is slow to become profitable, and you need to stop and think about whether you need to raise the price or cut related costs, or whether you should stop selling the product.
 
The above method requires a certain amount of time to accumulate. A faster method is to raise funds through loans, but loans usually face problems of high interest rates and long loan periods. Sellers will face greater pressure in the early stages of business expansion when the business is not yet profitable.
 
In the "2021 Amazon Seller Report" published by JS , 31% of sellers stated that the main factor for their success was investment funds, which is enough to prove the importance of sufficient funds to the career of Amazon sellers.
 
 
However, not all sellers can get sufficient financial support and keep the team's cash flow running smoothly.
 
Recently, Huading Holdings issued an announcement that its subsidiary Tongtuo Technology was suspended from selling by Amazon in 54 stores and its funds of RMB 41.43 million were frozen. After the funds were frozen, Amazon platform can use the restricted funds to repay consumers' after-sales compensation, return refunds and other unpaid fees of sellers.
 
As of November 25, Tongtuo Technology has used a total of RMB 15.69 million of restricted funds. As of now, the balance of the above-mentioned frozen funds is RMB 25.74 million, accounting for 2.65% of Huading Shares' monetary funds at the end of 2020.
 
The deterrent effect of Amazon's account blocking wave is huge. Once a seller's account is blocked, the risk of losing the funds previously earned from operations increases greatly, and it also poses a huge threat to the company's subsequent operations.
 
Even big sellers cannot protect themselves in a crisis. If small and medium-sized sellers encounter account fund freezing, their ability to resist risks is almost zero. At this time, a reliable financing and lending platform plays a critical role, which can greatly reduce the unknown risks faced by sellers. For example, the cross-border e-commerce exclusive loan specially launched by HSBC China Small Business Bank is very suitable for sellers.

Product Features:

  • Supports a repayment method of up to 12 months, with interest first and principal later , and repayment at any time;

  • online paperless application, no financial statements required;

  • application completed in 10 minutes . Pre-credit approval will be issued within 1 working day after application submission;

  • after the loan documents are signed, the loan can be disbursed within 1 working day at the earliest;

  • exclusive preferential interest rates, with the lowest annualized interest rate being 8%* .


If you have any questions, please contact HSBC China Small Business Banking staff and get immediate support!


 

However, for sellers who are using HSBC products for the first time, there may be some things they don’t understand. We can also answer the questions that sellers are most concerned about one by one:

 

 

*Note:


1. 8% Currently available to existing HSBC China Premier or Jade personal account customers.


2. Based on the one-year loan market quotation rate (LPR), the interest rate will be added or subtracted according to the customer's comprehensive credit, and the specific loan effective interest rate will be the basis. Taking the effective LPR on November 20, 2021 as an example, the annualized loan interest rate is about 8%-14% depending on the customer's credit.


3. HSBC Huirong e-commerce loan interest rates are calculated using the simple interest method and differentiated pricing is adopted. The specific interest rate for each application is determined based on the applicant's comprehensive credit status.




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