The topic of accessing funds is crucial, especially as many sellers are gearing up for the bustling Q4 and the upcoming Prime Day. In this episode, Leah and Piotr discuss the secrets to maintaining liquidity, optimizing inventory, and securing flexible funding options for your business to ensure a prosperous Q4.
[00:00:03 Leah: Welcome to Seller Performance Solutions. I am Leah McHugh of ecommerceChris. And today I am here with Piotr of Uncapped, who is here today to talk about accessing funds. Particularly this time of year, as everybody is rushing into Q4 with the recent announcement for Prime Day.
[00:00:22] Leah: I think a lot of sellers are Looking at their liquidity and trying to figure out what they can do right now. Pietro, I'm sure you've had many people reach out to you already.
[00:00:33] Piotr: We did, we did. Yeah, I think it's a busy season ahead of us. So we are looking forward and helping the merchants stock up ahead of the biggest quarter of the year.
[00:00:44] Leah: Yeah, especially, you know, 23 days to go until prime day. By the time this publishes, it'll be 20 days until prime day. So a lot of people are suddenly reassessing their inventory needs and trying to figure out how they can get everything that they need into FBA in time for all of these busy seasons.
So in terms of accessing funding with you guys, what does that process look like and how long does it take?
[00:01:09] Piotr: It really depends on the size of the merchant. So for the smaller merchants, the ones doing up to a million revenue per year, we actually try to do it probably within, within the same day, to be honest.
You go, you connect your data. And what we really need from a smaller merchant is just access to their Amazon accounts, and access to their bank accounts either through the plot connection, so, you know, just keep us very don't read on the access to the account. Or we ask for a bank statements from a larger merchants, you know, those doing more than a million revenue per year. If we have a seven, eight, nine figure merchant, we're also asking for some accounting data. So you know, we want to understand more about the debt and a few other aspects of the books. And I think then you should expect one more day when it comes to a decision making process.
[00:02:13] Leah: That makes sense.
[00:02:14] Piotr: Yeah. Usually if you apply by Monday, by Wednesday you should have money on your bank account.
[00:02:20] Leah: Okay. Wow. Yeah. That's great. So besides speed, because obviously that's a lot faster than a traditional loan, why should sellers look for your type of seller funding as opposed to say a more traditional type of business funding?
[00:02:35] Piotr: I think speed of course is number one, but secondly, it's about the security. We don't take personal guarantee. Basically, it's a completely unsecured loan which means that you don't have to be too stressed about the impacts taking it can have on your personal life. If something were to go wrong.
I also think we're very, very competitive on pricing. Frankly, like we've seen what some competitors are charging and, I've seen some posts in one of the groups that we are, you know, half price versus, versus our competitor.
I have to say we are fairly selective. So, our strategy has always been we want to work with, good quality merchants, good quality sellers, but for them, we offer the best product available.
[00:03:31] Leah: Yeah, no, that makes a lot of sense. I mean, it's just a volatile marketplace in general, so
[00:03:38] Piotr: Exactly, exactly.
[00:03:40] Leah: It makes sense that you would want to work with good quality sellers for sure. But it's great, I didn't realize you guys were so affordable. So that's good to know. And then in terms of repayment structure, how does that work? Cause I know everybody does it a little bit differently.
[00:03:55] Piotr: So I've actually created a LinkedIn post recently, about how we moved away from so called revenue based financing some time ago. And we offer a fixed term repayment products to our merchants. So we agree with the merchant upfront on the repayment schedule of the loan. And I would say on average, for a smaller merchant, usually every payment is over four or five, six months.
And for the highest quality merchants, it's 12 to 18 months. For the larger merchants what we also offer is a product we call line of credit, where we actually give you a facility from which you can draw the money up to the limit at any time you want. And as you repay the money, you can top it up.
So our best merchants always have 1, 2, 3, 4, 5 million borrowed from us at any time and, whatever is repaid when they need it, they borrow again.
[00:04:53] Leah: Nice. So you're like the American Express of seller funding basically.
[00:04:58] Piotr: Exactly. Exactly that. Yeah. This was kind of the idea, you take the money as you need. Because you know, I speak with hundreds of merchants every month. They're always telling me, I want two things.
I want the certainty of funding and we give it to them. This is the contract we sign and we fully commit to the amount. And I want the flexibility of the money. Some other companies are forcing you to take all money up front and even though the fee might be lower, but you are paying for money you don't need.
Sometimes it's better to pay slightly more, but use much less or use much more effectively. And this is what we're trying to offer.
[00:05:40] Leah: Yeah, I know. That makes a lot of sense. Why pay for funding that you don't need at that time. No, that's great. It's actually quite perfect. Cause I mean, dealing with cashflow, particularly on Amazon, I mean, e commerce in general is difficult with cashflow, but with Amazon, where at any point they can decide to hold some of your funds for a while, or, you know, account compromises, stops your, your payout for a few weeks. It's definitely something that a lot of sellers run into. Particularly this time of year when everybody's building, building, building, getting into the Q4 season. Which leads me to my next question, which isn't exactly funding based, but as we are heading into the busiest time of year for a lot of sellers, what is your number one tip as somebody who is talking to a lot of Amazon sellers every day?
[00:06:27] Piotr: My number one tip is really plan the inventory management very well. I see, you know, the merchants. I think, first of all, it might be surprising, but I think it's better to understock than overstock. My fiance, she's also a entrepreneur and she runs a business, and I've seen in our family the pitfall of overstocking and how draining it is to have hundreds of thousands or millions stock in the inventory you can't move and you can't sell and you're thinking, gosh, I could have turned around this money so many times and now I have this inventory. And sometimes you have to either liquidate it or you have to wait a year to sell it.
It's very, very expensive. So I would say be careful. Learn to walk before you learn how to run.
[00:07:20] Leah: Yes.
[00:07:21] Piotr: Because I think this is probably the number one mistake that the seller can do.
[00:07:25] Leah: Yeah, no, that's great. I like that because that's actually the opposite of what people usually say. People are usually like "get as much inventory as you can because you never know what Q4 is going to be like". I like yours a lot better because I think a lot of people do get in trouble and they get stuck with a lot of inventory that they then have to try to offload in Q1.
[00:07:41] Piotr: Yeah, and I think like, we still don't know how strong the economy will be. We don't know about Q4 this year, how strong will it be?
What will be the mood of the shoppers? How much free money will they have to buy gifts for everyone? So, I think you can make up this money next year, but if you overstock, like you can really shoot yourself in the foot, and you'll have a problem. So you will have a problem with paying your suppliers, and paying the debt.
Like, it's a spiral that you don't want to fall into.
[00:08:14] Leah: Yeah, absolutely. And then if it's an FBA, you have to pay to get it out of FBA so they don't charge you over stock fees. Yeah, no, absolutely. I totally, I totally agree with you. Awesome. Thank you so much for that. That was perfect. And then last question, if people wanted to reach you or reach uncapped, what is the best way for them to do that?
[00:08:32] Piotr: Our website is weareuncapped. com and if you want to speak to me personally, my email is P I O T R @ weareuncapped.com. I'm also very active on LinkedIn, Twitter, and I love to talk to the merchants clients. So feel free to drop me an email as well.
[00:08:49] Leah: Awesome. Thank you so much.
Have a happy Q4. I hope it's busy for you guys. I'm sure it will be.
[00:08:55] Piotr: It will be, and good luck to all the, all the listeners. I hope you know, you help yourself through everything and Happy Prime Day to Zero.
[00:09:02] Leah: Yeah, exactly. Happy Prime Day, everyone. Looking forward to a busy Q4.
[00:09:08] Piotr: Thank you.