Originally published September 20th, 2021
Last updated June 3rd, 2025
Online sellers have an ever-growing number of financing options. Many of these methods, such as credit cards, have been around for decades. Bank loans have existed for more than a thousand years. So, it makes sense that for a business in the world of ecommerce, lending opportunities are becoming more modern and flexible.
Despite the myriad of options available, only one financing method is specifically designed for online businesses. Ecommerce lending is an innovative way of providing online sellers with the extra cash they need without burdening them with minimum payments, high interest rates, or late payment fees. By collecting a percentage of sales, ecommerce lenders support small businesses by growing with them. If you sell, they get paid. It’s a win-win as both parties have skin in the game. This type of revenue-based financing provides more adaptable repayment schedules for ecommerce businesses looking to scale without taking on traditional loans.
Ecommerce lending is also more modern than a traditional loan or a credit card because it integrates payment into the online seller’s store. By using APIs, the lender receives payment automatically. This process eliminates errors, allows for payments based on a percentage of sales, and frees up small business owners for more pressing tasks, without ever needing to make a physical payment. With automation and real-time processing, ecommerce lending is a perfect fit for fast-growing online retail operations.
How to Benefit from Ecommerce Lending
When thinking about ecommerce lending, you should consider both the costs and the potential benefits of additional financing. Increased cash flow can dramatically impact your business by allowing you to spend money on goods and services that help you grow your business. This makes ecommerce lending an ideal funding solution for online businesses needing quick access to capital.
How you choose to invest your extra cash will depend on your business and its needs. Perhaps you’ve been itching to focus on advertising, marketing, and innovation? Or maybe you need to upgrade equipment, hire seasonal help, or pay off expensive debt. You might even want to focus on inventory by buying in bulk or hedging against price increases. With supply chain challenges, this has become the norm.
Read on for creative ways to use the funds from ecommerce lending. These strategies can help ecommerce sellers optimize growth while managing risk.
Increase Your Advertising
Are you one of the 81% of Amazon sellers that advertise their products? Or maybe you’d like to be, but you don’t have the cash flow you need to invest in marketing. Either way, an infusion of capital can go a long way. Brand name recognition is a deciding factor in most purchases, which can be an issue if your product is new or your company is small. The flexibility and personalization available in modern online advertising can level the playing field for emerging online sellers, allowing them to target people likely to purchase their products. Extra working capital can be used to run paid advertising on platforms like Amazon, Google, or Facebook.
Related: 3 eCommerce Financing Options to Grow Your Business
Buy Inventory in Bulk
If you’ve ever been to a bulk retailer like Sam’s Club or Costco, you’ve experienced the power of buying in bulk. By reducing a supplier’s packaging costs and guaranteeing a bigger sale, bulk purchasing can result in a decidedly lower price for the consumer. For online sellers, this principle applies to buying raw materials and inventory.
Purchasing in bulk can also allow you to keep more products in stock in case of unexpected demand. Think about the holidays or the inventory issues associated with certain products during the Covid-19 pandemic. With additional supply, you can better serve your customers and remain top of mind when they search for your product category. Not having inventory on hand can be detrimental to a seller's revenue and reputation.
Of course, if you purchase and produce your products for less, you can pass some of the savings on to your customers. Lower prices can lead to more sales and increased customer loyalty. With 66% of Amazon sellers concerned about competition driving down prices, even a small boost in margin could make an impact on your bottom line. Bulk buying using ecommerce funding options gives sellers more pricing flexibility and inventory security.
Invest in Innovation
Do you have a product you’ve wanted to offer, but you haven’t had the resources to research and develop it? New products can mean additional customers, more sales, and a more valuable brand, but they also require an outlay of cash. Perhaps you need to create new molds or design and update your packaging. As an online seller, you might also need legal advice or supplier research.
If you choose ecommerce lending, you can use the extra cash to diversify your product line. In return, you can boost your market share and minimize risk. All with the confidence of knowing your spending on innovation and growth initiatives isn’t coming out of your core business capital. Adding new products helps ecommerce companies drive customer acquisition and stay competitive.
Protect Against Price Increases
The last year has been a roller coaster for both the retail industry and the consumer. With the Covid-19 pandemic, prices for many goods have risen, often due to commodity costs. As an online seller or reseller, fluctuations in the cost of raw materials can impact your bottom line.
If you have additional cash flow, you’ll be able to purchase products when suppliers offer a good price. You can take advantage of discounts and deals, but you can also hedge against an increase in the price of raw materials. Suppose your business is dependent on a commodity known for volatility. In that case, it may be wise to research price tendencies before making large purchases. Using ecommerce financing to buy ahead can stabilize margins for online businesses facing cost uncertainty.
Pay Off More Expensive Debts
Many entrepreneurs choose to take on debt when starting a business. For lots of them, that debt stays around for a while. In fact, 70% of small businesses have outstanding debt.
Loans and credit cards can be an efficient, simple way to raise needed funds, and financing is indeed a cost of doing business. However, high interest rates and fees can quickly become unsustainable. With increased cash flow from ecommerce lending, you can pay off more expensive debts. This decision can help ensure the future of your business by reducing the total amount of money spent on interest while still providing adequate cash flow. Ecommerce sellers can improve their credit score by consolidating debt using lower-cost funding options.
Improve Logistics and Distribution
As a small business, you may have been bootstrapping it for a while. Despite your big plans for optimizing your operation, you might not have had the cash available to make your dreams a reality.
Ecommerce lending can offer you the opportunity to improve your logistics, distribution, and other aspects of your production and shipping cycles. By streamlining your process, you'll reduce costs and shipping time, both of which will benefit your customers, your bottom line, and drive repeat business. Investing in automation or warehouse tools can improve efficiency for ecommerce merchants.
Get Some Seasonal Help
One of the most significant aspects of ecommerce lending is how it fits into your sales cycle. Because you make payments when you receive payments from your customers, your cash flow isn’t negatively affected. This benefit can be advantageous when it comes to hiring seasonal help.
If you know you’ll need to hire additional personnel during a specific period, you can ramp up before your busy season starts. You don’t have to worry about cash flow because payments are proportional to your sales. When sales pick up, you’ll already have both assistance and additional cash. Flexible repayment terms allow ecommerce businesses to scale staffing during key holiday periods.
Related: Ecommerce Seller Financing: Why It Doesn’t Always Work
Go Green
Environmental improvements can pay off in both marketing and production costs. But they may not be at the top of the list if you’re limited in terms of financing.
A majority of Americans want companies to take action on environmental issues. By initiating and promoting sustainability initiatives, you can diversify your customer base and, hopefully, grow your sales. Examples include incorporating recycled and organic products, going carbon neutral, and reducing non-recyclable packaging.
If you focus on waste reduction and efficiency, you may also find that environmental initiatives translate to savings. A decrease in energy, materials, water, and fuel usage can have significant positive effects on your profits and will boost brand reputation and customer loyalty. Ecommerce sellers can use working capital to implement green packaging and eco-friendly supply chain improvements.
Upgrade Your Equipment and Packaging
Entrepreneurs are excellent at doing big things with limited tools. But sometimes, to grow, you need to invest in more specialized equipment. There also comes a time when you need to upgrade your packaging.
Perhaps you're considering purchasing a computer, a 3D printer, or manufacturing equipment or partnering with a new package design firm on attractive packaging. An investment in the tools of your trade can have positive returns and drive repeat business. Efficiency, customer satisfaction, and new products are just a few of the possible benefits. Access to ecommerce financing empowers startups to modernize tools and enhance brand presentation.
Diversify Your Marketing
When you’re short on cash, it may feel like you’re limited in terms of how you market your business. If you’re sticking to the same free or low-cost methods, you may not be reaching all your potential customers.
With additional cash flow, you’ll have the leeway to explore new marketing ideas. For example, you can look into affiliate marketing or hire a digital marketing agency. You could also upgrade your email marketing or invest in an SEO or social media strategist.
More traditional methods include promotions, discounts, and even money-back guarantees. A bit of extra cash can give you the freedom to explore so you can see what works best for your business. Online businesses can test new acquisition channels with funding solutions tailored to ecommerce sellers.
Are you excited yet? If you’re an online seller, you should be. Ecommerce lending is a straightforward, quick way for you to increase your cash flow, optimize your working capital, and upgrade your ecommerce business with confidence.
Onramp Funds isn’t a traditional lender. Founded by veterans of the ecommerce industry, Onramp puts the needs of small businesses, startups, and ecommerce merchants first. Its goal is to ensure sellers have the ecommerce financing they need when they need it—without the delays or friction of traditional loans. The world of online retail is changing fast, and Onramp is changing with it.
Schedule a call with us today to explore flexible ecommerce funding options tailored to your business model. At Onramp, you aren't just a decision—we care, and we’ve got your back.
