Cash flow has been challenging for a lot of merchants this year, with inventory tied up and brick-and-mortar sales restricted. A new product launch by financial services company Brex is aiming to give merchants faster access to their revenue, by enabling “instant payouts” through their Amazon account. This will then be rolled out to other e-commerce platforms in the coming months.
Under current circumstances, most merchants selling on Amazon and other marketplaces are expected to wait 14 days before they can access their revenue. This can cause strain for businesses operating with lean budgets, or those who need immediate access for funds due to an unexpected circumstance. Particularly when balancing inventory orders, access to cash flow can become critical in order keep business functioning as usual.
“A big problem small business owners face is weak access to cash flow when they most need it,” said Henrique Dubugras, co-CEO at Brex. “Companies that sell on big platforms like Amazon or Shopify can experience weeks or months delay between winning a sale and seeing the cash hit their bank account. Instant payouts shortens that cycle so that companies can focus on growing.”
This feature builds on Brex’s existing e-commerce offerings. The company offers a line of credit for e-commerce companies that is tailored to reward them in the areas that they spend the most. Competitive rewards include 1.5% on all digital advertising spend; an important area of investment and opportunity for growing brands. Brex also offers rewards on useful software tools like Salesforce and Zendesk, to ensure that merchants are getting the most out of their dollars.
In order to instantly access their cash, Brex users must also be U.S. sellers on Amazon and then are charged a 1.5% fee. This then makes the money instantly available for use. When combined with the instant payouts feature, the rewards system can enable merchants to offset that access fee when they spend in relevant categories. For instance, if an e-commerce brand accesses $1,000 in order to spend on digital advertising, they would immediately earn back the fee through rewards points.
“Brex’s instant payouts feature has been a game changer, both giving me peace of mind and allowing me to be offensive about investing in my business’ growth,” said Alexander Kunz, Chief Executive Officer at supplements company OP2 Labs. “It makes Brex a must for any scaling ecommerce business.”
As more retailers rely on e-commerce to help diversify and support their revenue channels, more and more businesses are widening their distribution networks to include sites like Amazon. While this cash flow access is only currently available for Amazon sellers, Brex intends to expand the accessibility to other selling platforms to maximize the number of merchants who can benefit from instant payouts.