Here is how to leverage credit cards to grow an Amazon FBA business.
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If you're currently growing an Amazon FBA business you might have considered leveraging your credit card to grow faster, but there are always some risks when it comes to using debt to grow a business.
The very first thing you need to do in order to be able to properly leverage a credit card on Amazon is to set yourself a monthly budget that you want to invest into your business. To do this you will need to be tracking all your current income and expenses so you can see how much extra money you have on a monthly basis.
If you've determined you can spend $100 a month comfortably, then you don't want to go out and spend $500 just because you are using a credit card. This would be over leveraging which is bad and how you get yourself into trouble. With a credit card you should be able to add 10 to 20 percent to your monthly budget.
The reason you are able to do this is because you should have given yourself some time before the bill is due. For instance, if you bought some items and send them into Amazon, estimating two weeks of time for them to arrive and start selling. Then you would have one to two weeks before your credit card bill is due.
For the first couple months on Amazon I would stick with just the initial $100 and not the extra percent so you give yourself time to learn and get comfortable with Amazon. This is a business that should compound on itself as you keep investing fresh capital in every month and products you previously purchased sells.
Now, if you decide you want to grow your Amazon business faster and get more consistent cashflow then I recommend a service call Payability. This is service that gives you access to a percentage of the money Amazon deposits into your seller central account on a daily basis. So as an example if Amazon deposits $100 into your seller central account on a Monday, then on Tuesday Payability would give you access to $80.
Over the long term of running an Amazon business your goal should be to focus on building up a business bank account that can pay for several months of expenses so that way you are always covered. This also helps you save money because you are not paying interest or fees to access capital.
Videos mentioned:
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29 мар 2020
