Scaling a product business can be challenging, and securing proper funding is a crucial aspect of enabling growth. Without adequate financial resources, it can be difficult to invest in key growth strategies such as expanding your product line, increasing marketing efforts, and hiring talented individuals.
Identifying and securing the right resources to fuel your expansion is crucial for long-term growth.
What is Inventory Funding?
Inventory funding leverages the resources of a financing partner to pay for inventory production. Funding can often be customized to address your business’s exact manufacturing, shipping, and sales timelines. Some providers require no payment on goods until the inventory sells. This works well with natural cash flow cycles.
The products produced typically act as the collateral for the financing, meaning that if the business reports an inability to repay the funding, the inventory can be sold to cover the debt.
Inventory funding is especially valuable to any business experiencing a significant delay between paying for inventory and receiving payment from future sales. It is also helpful for businesses that want to receive volume-based discounts by placing larger orders to support all of their sales channels. This works best when done on a quarterly or other regular basis and can help to prevent the stock-out issues that stifle growth.
Growth Opportunities with Inventory Funding
Inventory funding can provide several growth opportunities for your product business.
1. Ability to purchase more inventory
With inventory funding, you can secure the necessary capital to increase your inventory stock. This allows you to meet higher customer demand, especially during peak seasons or periods of growth. Having a well-stocked inventory ensures you can fulfill orders promptly and efficiently, which can lead to increased sales and customer satisfaction.
2. Expand your product line
Inventory funding can support your product businesses in expanding your product lines. By having access to capital, you can introduce new products or variations of existing products, providing more options to your customers. Diversifying your product offerings can attract new customers, increase market share, and drive revenue growth.
3. Bulk purchasing and discounts
You can take advantage of bulk purchasing opportunities and negotiate better prices or discounts from your suppliers. By purchasing inventory in larger quantities, you can often secure cost savings, and improve your profit margins.
4. Seasonal inventory management
Many businesses experience seasonal fluctuations in demand. Inventory funding can help manage your inventory levels during off-peak seasons by providing the necessary funds to purchase inventory in advance. This ensures you are prepared for increased customer demand during peak seasons without tying up their working capital.
5. Improved cash flow management
Inventory funding allows you to improve your cash flow management by providing an alternative source of financing. Instead of using your own capital to purchase inventory, you can rely on inventory financing to cover these costs. This preserves their working capital, which can be used for other growth initiatives such as marketing, hiring, or investing in technology.
6. Scaling operations
You can invest in equipment, technology, or infrastructure to optimize their inventory management processes, reduce lead times, and improve overall operational efficiency. This allows you to handle larger order volumes, expand into new markets, and grow your customer base.
Inventory funding provides you with the means to strategically manage your inventory, meet customer demand, and seize growth opportunities. By accessing the necessary capital, you can navigate the challenges associated with inventory management and drive sustainable growth.
Get funding for your Inventory
Inventory management is crucial for the success of any eCommerce store. It can help improve customer satisfaction, reduce costs, and improve forecasting, all of which can contribute to the long-term success of your business.
And finding funding for your inventory is an important aspect of running a successful eCommerce store. For physical product companies (CPG companies), or those producing shelf-stable consumables, a growth funding option that provides larger amounts than traditional financing and at faster speeds is inventory funding with Kickfurther.
Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you control. Kickfurther’s unique funding platform can fund your entire order(s) each time you need more inventory, so you can put your capital on hand to work growing your business without adding debt or giving up equity.
No immediate repayments: You don’t pay back until your product sells and you control your repayment schedule.
Non-dilutive: Kickfurther doesn’t take your equity.
Not a debt: Kickfurther is not a loan, so it does not put debt on your books, which can sometimes further constrain your access to additional capital providers and diminish your valuation if you approach venture capital firms.
Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.
Interested in inventory funding through Kickfurther? See how much capital you can access by creating an account today at Kickfurther.com!
Brandi Whytas is the Partnerships Marketing Manager at Kickfurther. She enjoys connecting with consumer product brands to understand their needs, while also building a network of partner services that supports brands in their continued growth.
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