Taking Amazon Loans for amazon fba sourcing using Oaxray for online arbitrage for fba

Hey guys it’s Ted with OAXRAY and today we
are going to talk about taking loans, Amazon loans to start up your Amazon business So right here actually on Forbes post and they’re talking about Amazon lending and how
Amazon has entered the lending market they did this about two years ago and essentially
what they do is they look at your account generally your FBA account is where I’ve seen
of their loans be offered and they look at how fast you’re selling things and they have
some time algorithm in the background it says OK you’re selling twenty thousand dollars
a month it’s safe to offer this person forty thousand dollar loan, they can probably pay
it back in X time period their metrics are good and everything just makes sense to make
this offer so the average interest rate seems to be about 14% and you can pay
back the loan early without anything fees from what it looks like and for those who
can get a loan they might see this as a great opportunity. For me on lending I used to be a person who
was hard more of a Dave Ramsey stance just no doubt at all to start your business and
I moved a little bit from a stance but for me the issue of taking out a loan for your
Amazon business is generally people are just getting started they do not have the experience
or the skill to manage twenty thousand dollars, thirty thousand dollars in new funds of purchasing
product so let’s just put the situation to you I’m a brand new bookseller maybe I purchased
five hundred dollars in books for about onezy, twozy dollar books at the dollar store all
of a sudden you give me a twenty thousand, thirty thousand dollar loan I’ve never spent
that much money before I don’t have the actual experience of spending that kind of capital
purchase all profitable items see as you build as a seller you generally start making contacts
you generally start step your way up to being able to spend those larger amounts so I’m
going to tell you my first day selling first probably few months selling it will be difficult
for me to spend thousands of dollars on books because I didn’t have those contacts now
after a year of selling I knew vendors who selling books by the pallet I knew how to
go into goodwill and find huge entire truck loads of items and I knew where I could meet
out the good items from the bad items the problem with taking a loan very early is that
you might not have this experience yet for me I liked building my way up even though
the slower my mistakes were smaller and I did make mistakes I would buy items and I
might spend twenty or thirty bucks and realize I can’t sell this on Amazon or realize hey
this item has an expiration date and this is an actual thing that happened to me I bought
a whole bunch of closeout items that had no return policy I look at the expiration date
there are all these numbers I had no idea what the digits meant when I actually looked
it up online all the stuff expired before the cut off days for Amazon so this is a huge
mistake that I ended up making earlier now had I had a ten thousand dollars loan I might
have purchased I probably would’ve purchased more of this item and lost more money on it. The expiration it was so close because of
the because of the dates are here that I couldn’t even sell it in time on e-bay or whatever
the other websites were because expiration dates were that close another instance that
I made pretty earlier on whenever I have low cash I bought an item that I was completely
restricted from selling it was actually automotive windshield wipers they were on clearance like
two bucks a piece they were selling between fifteen and nineteen on Amazon awesome set
of windshield wipers and had I been a little bit more experienced like now I check every
time and I’ve been a little bit more experienced I would have looked at that and say that’s
an awesome deal but I can’t sell that item but had I had a huge injection of cash I might
have made these bad purchases in larger quantities so there is a benefit to not taking out a
loan and kind of work grinding your way to the top until you can get to a clip where
you can make huge purchasing decision and that is my take on the whole thing I’m not
saying that every single person who takes out the loan will fail or everyone who takes
out will succeed but I am telling you that managing the cash that you have this just
the best policy whenever someone injections you with cash you tend to spend your money
differently than you would if you had just what you started with so I think Amazon is
making a good move here they’re saying we want more things sold on our website so if
we push our cash people can purchase more deals and they will sell more on the platform
which is one hundred percent true plus there are charging you a 14% percent interest
rate which is good for them but one thing I want everybody to remember about the loans
is they have your inventory. if you’re FBA they have all of your maybe
ten, twenty, thirty thousand dollars in inventory and they have this essentially as collateral
so if something happens they know OK we’re looking at this inventory is worth ten thousand
bucks his loan is eight thousand dollars so if worst comes to worst they’re going to take
your inventory and they’re going to sell your inventory they have a collateral if you’re
doing FBA so take that into consideration also I’ve read speculation that taking out
an Amazon loan they’re never going to suspend you but I mean I don’t really see why they
wouldn’t because they have your inventory as collateral so if you screw up and you have
an Amazon loan out I mean they’re going to take your payouts they’re probably going to
take your inventory and then your pay outs are taken, your inventory is taken they will
probably be paid back in full with those two things that happened so I don’t think there’s
any way that this is going to prevent you from being suspended on their platform so
take everything into consideration yes you can grow faster by taking out loans this is
one hundred percent true but just keep an eye on your skill level your purchasing abilities
before you actually go in and take out loans. One of the things taking up the loans does
is it puts a rush on you and what I mean is let’s say you’re currently spending two thousand
dollars a week and then you take out a ten thousand dollar loan. The best thing for you to do is just spend
that money as quickly as possible so you can purchase as many items and you can start flipping
it and you can make back that fourteen percent you actually want to make back way more than
that your interest rate in this situation you’re going to be you have pressure on you
to spend. spend, spend, spend as much as possible and
I think that you might be making worse buying decisions in some cases but if you decide
to take out a loan go for it. But just take everything into consideration
I think that some businesses can use a loan build their business faster but if you’re
in a situation where you’re not sure exactly how you want to spend your money or if you’re
spending a small amount of money now you’re going to get this large cash infusion just
remember that buying patterns your buying decisions are going to be different. Thank you guys very much, have a great day and make some money using OAXRAY

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