Selling Too Much Stuff

Zach

Zach

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Jun 7, 2015
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I've got a good ecomm problem on my hands.

We keep selling too much of our shit. It's too easy. I'm ONLY selling using Facebook ads and our business (6 months old) is being run dry of inventory.

What I WANT is a way to not have to frontload so much for inventory, and instead be able to put in larger orders and find a way to pay for these items when the sale happens. Or something that allows my $$ to go further.

Currently I'm missing out in a couple big areas just because I can't "afford" to go big.

1. Influencers -- missing out massively here.
2. Doing more than just branded search on Amazon
3. Native ads
4. International appeal we've tested & there's appetite here with no competition.

We have the product & brand to zooooooooooooooooooooooooooom but we're constrained to just our current budget & inventory levels. Currently we have about $175k tied up in our own inventory (still waiting on our next shipment -- lead time ~ 8 weeks).

I feel like I'm losing every day I don't maximize on this market, every day I whine about low inventory a competitor is maximizing on the empty space.

Is there anything that can be done to help make our $$ go further in the inventory acquisition game? I really don't want to take on an investor to complicate things and/or get ripped on equity.
 
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I don't have any suggestions to contribute, I just wanted to say I'm really excited to see how well you're doing with this! (I'm assuming it's the same product I saw about a year ago.)
 
If things are going as well as you say, take out a business loan (since you don't want to mess with investors and equity), place a huge order, sell it out, pay back the loan for minimal interest, and then you should be sitting on a larger war chest that lets you start placing bigger orders. I'd also try to stagger orders so you always have inventory coming in before you sell out.
 
Future State said:
If things are going as well as you say, take out a business loan (since you don't want to mess with investors and equity), place a huge order, sell it out, pay back the loan for minimal interest, and then you should be sitting on a larger war chest that lets you start placing bigger orders. I'd also try to stagger orders so you always have inventory coming in before you sell out.
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From what I've been told our biz isn't even a year old so getting a business loan just isn't gonna happen. Should I say f*ck it and apply anyway?

What I do have is some of my old bosses who have given me $100k as a short-term loan and just want it back +10% when I sell the inventory. I've shown them everything about the business and they like it. Next round they say they'll double the investment to $200k, just get through this first round.

The above seems like my best option for maximizing any money, but I just want to know if I'm not missing something. I'm greedy about loss of time in this instance. I want to go harder at this. If I take my own pace as is today I'll be likely completely independent (no biz loans for inventory) in 6-12 months. That's just too long!! Too much market share given up in that amount of time cuz I don't got the $$.

For example, my bosses suggested I negotiate better with our suppliers -- striking a deal where I pay them when I sell the product. Anybody done that?
 
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Zach said:
From what I've been told our biz isn't even a year old so getting a business loan just isn't gonna happen. Should I say f*ck it and apply anyway?
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I was able to get a 5 figure line of credit for a company with no revenue that I just opened the bank account for that day.

If what you are saying were true - how are companies getting loans to open up locations for brick and mortars?

Also something to consider is Factoring - that’s an option. They lend you money based off of receivables for the last XX days of business. There are also short term bridge loans. There are literally dozens of financial niche companies literally designed to get you money fast.

If you got a setup where they give you money for 10% interest that okay, but you should definitely call your bank and give them your situation and if they can’t do anything keep calling banks. If you can find a bank that just opened a new branch location, go there - that branch needs customers!

It’s sort of crazy but the whole USA system is designed to give businesses money, for nearly free cause interest rates are so low.
 
@CCarter That's the kinda attitude I've been seeking but nobody really has shown options for or just told me 'sorry that's just the way it is'

"Factoring" -- so do I go to a bank and just show them the sales 'velocity' and hope they understand my argument that it's going really well and I need more $ to make more?

I'm going to make some calls to new banks tomorrow then. Do you think credit unions are more likely to lend than say a Bank of America? We've been at BoA (personal accounts) for 12 years & biz account for 6 months actively.
 
@Zach Check out Clearbanc. I haven't tried using them so I don't know all of the details, but I've been seeing their brand quite a bit. Their focus is to provide capital for growth to online businesses. My understanding is that they're going to want to see details of your business though - if you're cool with that, might be a decent option.
 
I know this is just some "top 10" loan comparison affiliate site, but this seems to be what I see more than not.

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@acquired

Via Clearbanc's site: "At least 6 months of consistent revenue to qualify"

.....don't have that. Only got 5 months of scaling upwards revenue. We're pushing our limits here!
 
What MJ Said, I wouldn't worry about what it says on affiliate comparison sites, reach out to them and see what they say.

Worst case they say no, but in reality banks have been caught time and time again having one rule publicly and doing something different in reality.

You could also try Peer-to-peer lending similar idea just instead of a bank lending you the money, the total loan amount would be made up of smaller amounts from your average joe on the street.
 
Go to a bank. An actual, physical bank.

Speak face to face with someone who can look at your numbers and velocity.
As nice as "online" is, direct communication holds so much more power.
 
Great to hear you have such a nice problem on your hands! Always like reading about how BUSO members are doing well. Perhaps you could do a Facebook ads guide on here as you seem to have it nailed?
 
@Zach - your bank should be the first one you go to, physically setup a meeting with them to discuss this. The bankers also have options which aren’t always public. It’s like marketing, we have dozens of potential services to sell to people but a lot are too complicating to show up front unless someone comes in with a specific case. Worse case they point you in the right direction.

On top go to other banks, all the fucking banks in your city, county, then state. Keep making phone calls and setting up meetings!! And google “factoring companies”. They literally are setup for you EXACT situation - LITERALLY!!! Call each factoring company up, obviously shop around for competitive rates.

Also mention to each bank and factoring company that you are meeting with multiple banks looking for a solid partner. This way they know they aren’t the only option you are looking into and need to be competitive. Every banker in the world know there is some idiot that will eventually lend you the money, especially when you are shopping around AND can show cashflow month over month, sales, and inventory - everything that is physically solid.

Stop doing shit like a neckbeard hiding behind the computer screen. You’ll only get high interest rates options trying to do everything online, and you are gravitating towards new online solutions first, wrong move.

You situation is not different than a brick and mortar store that has cash flow tied in inventory. Banks understand than cause they have been lending to those situations for thousands of years - literally there would be no reason for a bank if not for that specific reason. Why do banks exist???? To lend money to grow businesses!!!

Edit: Just to put this into perspective - At one of my banks I've got my banker calling me once a month to ask me if I need anything more. Think about it - why would he be calling once a month to follow up? To sell me more services cause that's how THEY make their bonuses. Them lending YOU money is how they make their bonuses!

So if you are in a situation where you've got a banker that HAS to lend money to make a bonus (ask your banker friends about how they make bonuses) - it's a bit difficult to not get money guys - unless you are just in a shitty business with bad margins.

They will work with you and help you with your business plan to make sure it is smooth sailing. Shit you can even ask them for example loan proposals that were successful in getting through to mimic - you gotta be slick though.

Also walk into the fucking bank in a suit and tie, not like a fucking neckbeard that has no dress sense. I walk into every bank meeting and out dress them - in fact meeting with clients it's the same way, cause it shows I'm serious. If you are here to take someone's money, you better look like them, and look sharp doing it.

People are more comfortable with someone that takes how they present themselves seriously. Now what comes out of your mouth afterwards is all on you. Shit can go side ways real quick, so show numbers.

Guys - bankers make bonuses by LENDING YOU MONEY. Whether you pay back the money or not, they need their bonuses. Now it'll reflect badly on them if you don't pay back, but at the end of the day they make their bonuses on lending money. They are a for profit operation, it's why they open up branch locations, not for fucking personal saving and checking accounts, it's so they can charge interest rates on the money they lend.
 
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CCarter said:
Guys - bankers make bonuses by LENDING YOU MONEY.
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Great post. One thing to add: it is YOUR responsibility to not bite off too much debt. Be smart and a little conservative. They will loan you way more than probably makes sense. You don’t have to take it all. Be careful that you don’t try to catch a falling knife using credit (it doesn’t sound like you have this problem, but things change.)

This applies to business loans and mortgages alike.
 
@Zach i've got a buddy who can help you with the fast business loan thingie actually since u mentioned its up to 6 months old, but another solid alternative will be talking to your suppliers if they are human & or smart they should understand how it's a WIN for them too
 
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