5 Ways To Improve Your Cashflow Today

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Today, I will show you five things you can do to improve your cash flow.

Many businesses focus only on metrics like revenue, growth, net profit, and ROI; while those are all important, Cash flow is the most essential metric for any business. If you don’t manage it correctly, your business won’t survive, regardless of how high your profits are.

Steven Pope, who runs the MyAmazonGuy Agency, recently shared that a staggering 41% of their client cancellations came from growing brands that simply ran out of cash.

There’s a common misconception that all it takes to be successful is to buy for $10 and sell for $20. but what happens when you need to pay the $10 upfront, and the $20 will only come six months later? You end up with a significant cash outlay and no cash coming in to pay your bills and support your growth.

No Cash = No Business

And therefore,

Cash today > cash tomorrow.

Cash today is worth more than cash in a month. Always.

By strategically delaying cash movement out of your bank account, you can improve your cash flow and, as a result, have a healthier business.

Here are five things you can do today to improve your cashflow:

1. Ask Amazon to increase your billing threshold for PPC ad spending

This is by far the quickest and easiest one.

When you started spending money on ads, chances are Amazon was charging you every time the balance hit $50. That amount slowly increases based on your spending up to $500.

Most people don’t know that you can ask Amazon to increase the open balance limit up to $10,000. This means you won’t have to pay the PPC bill until you reach $10K in spend.

I wrote about this years ago, yet I’ve seen too many sellers with long credit card statements full of $500 charges. If you haven’t done it yet, open a case with Seller Support and ask for it.

2. Not all credit cards are created equal – Get more time to pay

Using credit cards strategically can pay off real dividends.

There are currently multiple Business cards offered by both Chase and Amex that offer 0% interest on purchases for the first 12 months.

And on the consumer card side for both Chase and Amex, it’s 15 months of no interest

Additionally, cards such as the Amex Plum card let you carry a monthly balance for up to 60 days with no interest.

With limits on each card in the $20K – $50K range, this can quickly add six figures of liquidity to your business.

(The info above is for the US; other countries may have similar options)

3. Pay anyone for anything with a credit card using these services

You already use your credit card to pay for PPC, shipping, and other expenses. What if you could use it to wire money to anyone worldwide?

Companies like Melio allow you to do just that for a fee (2.9% as of writing), which can be partially offset by your card rewards if you play your ‘cards’ right. Melio also offers $100 cashback after your first payment.

You can read more about credit card rewards and their value here

Using this method, you will effectively keep your cash for an extra 30-45 days on expenses that normally would be cash or wire only, such as payments to your suppliers, etc.

4. Renegotiate better terms with your suppliers

This can be a big one. While the standard payment terms, such as 30% upfront and 70% on shipment/delivery, may work for you, improving those terms can mean holding on to cash for a few extra months.

The key here is relationships, forming a connection with your supplier, and showing them the big picture so they know the impact of better terms on your business and, therefore, your order sizes. If they believe they will succeed when you do, it will incentivize them to help you out.

Here’s a recent Twitter / X thread from Ben Lenord on how he approaches supplier negotiations:

As an anecdote, a friend of mine convinced his supplier to wait for his balance payment until after he sold the goods. He then used that cash to pay the balance. It’s not typical, but use it as inspiration for what’s possible.

5. Turn returns into cash

I’ve spoken with countless sellers who let Amazon dispose of all their returns. On top of not recovering anything, they are paying extra fees for the pleasure.

Here are a few alternatives you should try:

First, use the Amazon Grade and Resell program. Amazon will take your returns, inspect them, grade them, and then list them in your seller account for a predetermined discount based on the condition. This is the easiest option.

Use services such as Returns Worldwide, Returnaround, and Flexport returns for items that Amazon won’t grade. Create a removal order to their warehouse, and they grade and resell the products for you. This option is more work, and recovery amounts tend to be lower, but it still beats disposals.

Lastly, if you have the resources, consider bringing your returns In-house to process, grade, and resell. This is the most complex option but can have the highest recovery rate when done correctly.

Which of these will you act on today to improve your cash flow?

I hope you enjoyed this. Thanks for reading!

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