You have a killer Amazon FBA product ideas but no capital. Well don’t get disheartened, everything is
not lost. Here, we tell you 10 different methods to raise money for your
business.
1. Self-funding
Self-funding is the first and foremost way to start
any business. If you have some capital of your own to spare to support your FBA
business idea, go for it. However, you should take care that you are not
dipping into your pension, children’s education, or any other essential funds.
Even if you are 100% sure about the success of your business, using such funds
is unadvisable. If your business idea is rock solid, you should be able to
raise capital through other means. The other avenue for self-funding is to
leverage equity in your home. If you own
your home, you can get credit against your home equity to meet your capital
needs.
2. Thrifting/Home Raiding and Reselling
Say you have a brilliant idea about selling through
Amazon FBA, and your cash requirements are also quite low, may be $500, but you
don’t even have that much. How do you get the required amount?
Simple. Raid your house and get everything that you
don’t need any more – old mobiles, kids’ clothes and toys, car accessories, TV
remote, play station. Basically, anything that you can lay your hands on,
categorize them, and list on online sites like ebay, craig’s list and OLX to
sell them. Just take care to post good photographs and state the exact working condition.
Credit cards and loans is another way to raise money.
You also have the option of switching to a provider who can defer payments or
give you more time for repayments.
3. Borrow from friends, family
If you have people in your extended family or
friends’ group who won’t mind lending, you can ask them. However, it may lead
to strained relationships so you must tread with caution. Explain your business
and its goals to them, and why you need the money. They should know what their
liabilities could be in case you fail. Also, be sure that they can take the
pinch if things go wrong.
4. Business partner
It’s not only about raising money, it’s also about
taking capital risks. If you want to decrease capital risks, you can get
yourself a partner. But you need to be cautious while taking a partner. Have
everything done legally and always include a buy back clause in case there is a
fallout later due to any reason.
5. Working capital loans
Most financial institutions have the provision of
advancing business or working capital loan against your business accounts with
them. These loans need minimum documentation and are processed quickly, often
within a couple of hours. If you need short term loans, business advance can be
a good idea. Online loan aggregator sites are coming up, where you can submit
your loan requirements with the necessary documentation. They claim to get your
loan processed within 24 hours!!
6. Bridging loans
Bridging loans are short term loans that many banks and
financial institutions give for building infrastructure, purchasing machinery,
fulfilling taxation requirements, paying insurance premiums etc. They are
processed quickly, need minimum documentation, and hence are easier to get.
7. Crowdfunding
Crowdfunding is the latest trend in raising capital
and funding start-ups. In crowdfunding you raise money from many investors –
usually individual citizens – rather than a bank, who think that you have a
feasible idea. May online platforms like Kickstarter and Indiegogo specialize
in crowdfunding.
You need to post your finished product or idea on the
platform and give something back to your investors – the product, a service, or
anything else that you mutually agree upon – in return for their funding.
Crowdfunding is a good option for products or ideas that are not suitable for
traditional funding.
8. Invoice factoring
If you are into high priced products, where payments
are made slowly in instalments, you could be having lots of invoice in your
hands that would be paid in the next couple of months. If you can find someone
who can pay you that much amount immediately, after a certain percentage
reduction (usually anywhere between 8-12%), you can cash them out.
Summary
Whatever way you are raising funds, remember that it
is not your own money and must be returned. Unless you are thrifting. Even if
you are dipping into your own savings, you should replenish it so that you may
use when the need arises again. In case of loans remember that you need to pay
the interests as well as the principal amount. So go for fund raising only
after you have ensured the success of your FBA selling idea.
Product Spy Pro provides Amazon listing analyzer to find good products to sell on Amazon.
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