Amazon is a capital game. To do $10m a year you have to be holding around $2m in inventory — without it, the revenue is arithmetically impossible no matter how good the listings are.
Which means growth is usually limited by cash, not by demand.
But you do not necessarily need more money. You need more money that is free.
Prefer to watch? One hundred and fifty-five seconds on why growth is limited by cash rather than demand, the four arguments for supplier credit, and how to get Net 60 from a freight forwarder.
Why the cycle strangles you
Look at what happens to a dollar of inventory.
You pay the supplier before production. Sea freight from Asia takes 45–75 days. Then Amazon holds your sales revenue roughly 30 more days after the sale.
So you are funding that unit for something like four months before the money comes back. Every unit you want to sell more of extends that gap.
The tactics below close it with supplier and freight credit rather than borrowing — which is the point. A loan at 10% a year is a real cost. Payment terms are free.
Ask your existing suppliers for terms
This is where the serious credit is, and it depends on relationship, volume, and how much your business matters to them. If you have worked with a supplier for years, the answer is usually yes.
Negotiate on the messaging app they actually use, not email. Terms are a relationship concession, and relationships are not built in an inbox.
The four arguments, in order of weight
1. Mutual growth. Credit is not charity — it lets you order a larger quantity, which lets you spend more on marketing, which sells more units, which makes the next order bigger. Say that explicitly: you are the constraint on my order size, and removing it grows your business too.
2. The payment cycle. Explain the four-month gap above. Most suppliers do not know Amazon holds seller funds for a month, and it makes the request look structural rather than opportunistic.
3. A yearly plan, not a purchase order. Tell them how many units you intend to order across the coming 12 months. The same request framed against an annual volume lands very differently from one framed against a single PO.
4. Social proof. Mention that your other suppliers already work on these terms. Real, but the weakest of the four — lead with growth, not with comparison.
What to ask for
Open with 25% deposit, 45% on ready date, 30% at 60–90 days after shipment.
Then expand gradually as trust builds. Terms are a ladder, not a switch.
Long term, push toward 100% at delivery. Some suppliers will agree once your reliability and volume are strong.
And once you have real leverage, ask them to hold finished stock — or at least raw materials — and ship on demand without upfront payment. That collapses your lead time and your cash gap in one move.
Then do the same with freight
Freight forwarding is a commodity. Several providers offer effectively the same service at different prices, which is exactly the condition under which asking works.
Get multiple quotes. The first purpose is simply not to overpay.
Then choose on terms, not only on price. When two quotes are close, take the one with better payment terms and better communication. A slightly higher rate on Net 60 beats a slightly lower rate paid up front.
After 3–4 months of consistent shipments, ask for Net 60 — paying 60 days after the shipment lands. Forwarders grant this far more readily than suppliers do, because the service is commoditised and they do not want to lose the volume.
Q4 is the easiest ask of the year
Ask for better terms on specific POs and specific shipments, not as a permanent change.
And be direct about why: without the terms, you cannot place the order at that size.
Both suppliers and forwarders expect this conversation in Q4, because every one of their customers is trying to fund a peak. A request scoped to one season and one order usually goes through smoothly.
What this is worth
Work out your own number before you negotiate. Take the order value, multiply by the extra days you are asking for, and you have the amount of free working capital the conversation is worth.
Then decide what you would do with it. Free cash flow only helps if it goes somewhere — more inventory on your best-performing products, a bigger advertising budget behind a launch, or simply the ability to take money out of the business.
Sizing your inventory need is the input to all of this — see Inventory Forecasting and Purchase Orders.
Common mistakes
Not asking. The overwhelmingly most common failure. These terms are standard for sellers who requested them and absent for sellers who did not.
Asking by email, where a relationship request reads as a procurement demand.
Framing the request around one purchase order instead of an annual volume.
Choosing a freight forwarder on price alone, and giving up 60 days of free capital to save a small amount per shipment.
Treating financing as the first move. Supplier and freight terms cost nothing; borrowing costs interest. Exhaust the free credit first.
Freeing up cash and then not deploying it. Idle working capital earns you nothing.
Related
- Inventory Forecasting and Purchase Orders — how much stock the terms need to fund.
- Where Your Margin Actually Goes — the cost side of the same problem.
- PPC Payments and Cash Flow — the other free credit line.