Leveraging Working Capital to Grow Your eCommerce Business
With $4.28 trillion in global retail online sales in 2020, a 27% increase from 2019, there’s never been a better time to take your eCommerce business into new markets, develop new product lines and boost your online presence. Still, paying for your business expansion can be overwhelming and requires an ongoing cash flow. For many business owners, not being able to find the right financing solution often leads to growth plans being delayed or even scrapped altogether.
If you feel that now’s the time to expand your business, ensuring you have enough working capital to manage your expansion plans, not to mention your other daily expenses, should be at the top of your to-do list.
When looking for outside financing for your business, there are a couple of routes you can take. Banks or traditional lenders are always an option, but qualifying for a loan takes time and the repayment options are often inflexible. Online working capital providers, however, often tailor their services for eCommerce businesses, making it easier to obtain an offer with instant funding, multiple funding options and simple settlement policies.
Furthermore, online working capital providers extend offers based on your marketplace payouts, while settlement plans are gradual and based on future payouts. This means you can invest in growing your business without impacting your bottom line. As we’ve seen firsthand through Payoneer’s working capital solution, Capital Advance, increased working capital can be hugely beneficial for a store’s sales volumes.
To give you a better idea of how working capital can help transform your business, let’s take a look at West End Toys, a US-based third-party marketplace seller who’s been using Capital Advance for the last two years.
West End Toys and the Power of Working Capital
When West End Toys began using Capital Advance in 2019, they were already established marketplace seller on Walmart and Amazon looking for new ways to grow their business. Since then, they’ve accepted several working capital offers availing themselves of millions of dollars, which were used in a variety of ways to maximize growth, including:
- Product category expansion – Early in the COVID-19 pandemic, changing consumer habits, namely the sudden demand for toys and home activities, reshaped how West End Toys’ customers shopped. To grow their business and meet these new consumer demands, West End Toys used their working capital funds to expand into new product categories, including puzzles and inflatable pools.
“While we had a good stock of various inventory on hand, we didn’t offer puzzles as one of our product categories in February of 2020. However, the demand for puzzles surged as stay at home orders were enacted across the US. Using one of Payoneer’s working capital advances to solely buy puzzles, we were able to accumulate a steady supply and ended up doing over $750,000 in puzzle sales in 2020.”
– Evans, Founder, West End Toys
- A multi-vendor commerce website – West End Toys built a website, set to be launched soon, to supplement their marketplace stores, providing them with another sales channel and a new growth engine.
- Warehouse expansion – In 2020, West End Toys expanded their warehouse space by 30,000 square feet. This year, they are adding a new warehouse, bringing their total to four locations and over 150,000 square feet.
- New employees – In 2020, 15 new employees were hired to help facilitate West End Toys’ business expansion.
In addition to financing West End Toys’ expansion, Capital Advance also helped boost their sales volumes, which spiked more than 100% from 2019 to 2020. That number is set to increase further this year, with projected 2021 sales expected to increase by almost 70%.
“The speed with which Payoneer’s working capital team realized the demand for our products and their willingness to still offer us working capital while the whole world was wary of a potential economic meltdown during the height of the COVID-19 pandemic proved essential to our growth story in 2020.”
– Evans, Founder, West End Toys
Growing Your Business with Capital Advance
At Payoneer, we’ve seen the power of working capital to transform businesses, with sellers in our network increasing their sales volumes as they accept more Capital Advance offers. Interested in growing your business with Capital Advance? Read on to learn how.
Capital Advance is the flexible working capital solution, specifically designed to meet your individual business needs while covering different growth opportunities. can reach as high as 140% of your average monthly volume, up to $750K.
All three levels of Capital Advance come with a transparent and fixed fee structure, meaning no hidden costs, and a gradual settlement plan based on your future marketplace payouts. Lastly, you’ll continuously receive new working capital offers, meaning you can work on your expansion plans without worrying about where your next round of funding is coming from.
Interested in applying for your first working capital offer?