1/ This is a great piece about Amazon's business lending arm by @ShaoulSussman. A brief explanation: prospect.org/economy/how-am…
2/ most small business loans use asset-based collateral, where the lender can inspect inventory and call it in if there's a default.
You can't do this with an Amazon-based business.
You can't do this with an Amazon-based business.
3/ Amazon holds the merchandise at their warehouses, commingles the inventory with other sellers' products. So that whole area of financing is locked out for third-party sellers. Enter Amazon to solve the problem it caused.
4/ Amazon Lending will loan to these sellers, but only through a "merchant cash advance" product with high interest rates. More important, the loans "can be used only for one purpose: building up or restocking inventory on products sold on Amazon"
5/ This embeds sellers deeper into Amazon's world, and it indirectly moves more money into Amazon’s pocket, since the company earns a substantial cut from every third-party sale on the marketplace.
6/ Lots more in this great piece- the point of this is control of a universe of sellers for the greater good of Amazon. prospect.org/economy/how-am…
