Amazon Wants to Lend You Money?!

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When we were doing business on Amazon, there were actually quite a few differences from traditional domestic e-commerce. Because of FBA inventory, asset-light operations, which was originally one of the advantages of e-commerce, were no longer available to us Amazon sellers.

Everyone has to send FBA, and using FBA means you have to stock up on inventory. Therefore, capital turnover is also a common problem that Amazon sellers are troubled by.

At this time, sellers usually turn to third-party financial institutions for help. Where there is demand, there is a market. This is a very normal system. But now, Amazon wants to intervene in the financial services market for sellers.

Today I opened the backend of the Amazon store as usual, but the backend looked a little different from usual. After looking carefully, I found that there was an extra section.

There was a notification on the homepage of the backend reminding me that I could apply for a loan immediately...

Although Amazon has already connected with some third-party services to provide sellers with options, it is still rare to directly push third-party services to the backend homepage, especially those that are relatively sensitive financial services.

Anyway, you won’t get a loan immediately just by clicking on it, so let’s take a closer look.

There is actually not much information about the steps. The information we can get here is that the provider of this loan service is Fuyou Factoring, and if you apply for a loan, Amazon will provide your MWS data to this third-party service provider.

Judging from this loan product alone, the annualized interest rate of 14% to 16% is higher than the bank's interest rate (approximately 6% to 14%). However, it is also a very attractive service in non-bank financial institutions (approximately 14% to 18%). After all, it is a service provider that Amazon provides credit endorsement. When the interest rate still has an advantage, everyone will definitely choose the officially recommended service.

But in addition to the interest rate, the other advantages of this service are also very obvious. It can approve loan amounts of hundreds of thousands , and this is without collateral, which is equivalent to a credit loan of hundreds of thousands. So I guess the amount of the loan and whether you can participate in this service are all screened by Amazon based on the store's sales.

Any Amazon seller who uses FBA may face cash flow problems. Once the money is received, they have to stock up again and settle accounts with the factory and freight forwarder. In an emergency, they still need such a service to get a bridge loan. Amazon's launch of a high-quality loan service with an official background is definitely a benefit.

However, rather than studying whether this loan service is cost-effective and useful, what I want to know more is why Amazon directly promotes this third-party financial service in the background?

After a series of operations such as querying the background and asking customer service, I collected some information about Amazon's loan service and shared it with you.

Amazon's loan service is not open to all sellers. The platform will first use an algorithm to screen the status of the seller's store and select those sellers with better performance to push this service. The official standards are also very magical.

I originally thought that sales were the reference standard, but the official reply turned out to be customer satisfaction as the most important reference factor. Whether to lend me money or not, they don’t look at my profits but at the buyers’ satisfaction with my products. This reference standard is obviously very strange. (But it sounds like a compliment to our store)

When a loan is issued, the borrower's repayment ability should be the first consideration, but Amazon first considers the seller's customer satisfaction. Of course, the platform algorithm will not make a fool of itself, so there is only one possibility for this, that is, on Amazon, the e-commerce platform

Customer Satisfaction = Profitability

In other words, after a round of data screening and research on third-party sellers, Amazon found that the higher the customer satisfaction of the sellers, the higher the profitability.

After discovering this, do you remember the feature that Amazon just updated not long ago - " Buyer Voice "?

This function also directly displays customer satisfaction to sellers as part of performance in the form of "buyer experience health CX". For more details about "buyer voice", please click here.

Amazon's frequent strategic placement and screening of customer satisfaction (and, therefore, seller profitability) actually represents a very scary move.

Amazon wants to reduce the number of sellers with low profitability

disuse

This year’s elimination will be the most stringent ever, so even some small sellers with a certain degree of profitability and living in a corner will be affected. These two customer satisfaction screenings and the new advertising spending rules updated at the beginning of the year all send out this signal.

Back to the topic of loans, sellers who are short of cash flow and need loans to bridge the gap can choose third-party services with official endorsement. However, official loan services are invitation-only. What should sellers who have not received an invitation do if they also want to use it?

From the answers from the backend and customer service, I have summarized the conditions that will allow you to receive an official loan invitation . You can scan the QR code to chat with me for consultation~

PS. If you want to join the seller discussion group, you can also private message me to let me add you to the group

Source: Cross-border Business School

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