Starting an Amazon business is one of the most popular ways today to move from employment to working for yourself.
You find a product, source it from China, list it on Amazon, and scale. Thousands of small businesses do exactly that, and many succeed.
But once you move from idea to execution, a few real problems show up very quickly when starting an Amazon business.
The Three Main Challenges
If you plan to source products from China, your business can expect to run into three core issues:
1. Logistics
Shipping takes time. Delays happen. Costs fluctuate. You’re dealing with international freight, customs, and multiple intermediaries.
2. Supplier Reliability
You don’t fully control production. Quality issues, miscommunication, or even fraud can happen, especially with new suppliers.
3. Money
This is the biggest one. Most suppliers require 100% upfront payment, or at best a 30% deposit on signing and the remaining 70% before shipment.
Which means you are paying for production, logistics and risk — long before you make your first sale.
Why Cash Becomes the Bottleneck
Let’s say your first order is $20,000. Typically, that money is locked for two to four weeks in production and another three to six weeks in shipping. Once that’s done, there’s the Amazon prep and sales cycle. All of which means your capital can be tied up for two to three months.
If you want to scale, the problem multiplies: The bigger your orders, the more cash is needed, and the more stock keeping units (SKUs) you have, the more of your capital is locked in your import orders. With that dynamic in play, even profitable businesses hit a ceiling simply because they run out of cash.
The Typical Beginner Path
Most beginners accept this as “part of the game.” They start small, reinvest their profits and grow slowly. This works, but it’s not how more experienced importers operate.
A Different Model: Supplier Credit
In international trade, there’s another approach that many small businesses don’t initially consider. Instead of paying upfront, the buyer receives goods and pays later. In many cases, it’s possible to secure terms that allow you to pay, for example, 60 days after shipment or 90 days after delivery. This is often called supplier credit or trade credit.
From a business perspective, this changes everything. Instead of locking in your capital, you sell first, generate revenue, and then pay the supplier.
But Why Would a Supplier Agree?
At first, this sounds unrealistic. Why would a supplier ship goods without getting paid? The answer is simple: they usually don’t take the full risk themselves.
In many cases, suppliers rely on external protection mechanisms that cover the risk of non-payment. This allows them to offer deferred payment terms safely, land orders from new or international buyers, and scale their own sales.
From the outside, you only see the payment terms. But behind the scenes, the deal is structured to manage risk.
How This Solves the Money Problem
For a small Amazon business, this is a major shift. Instead of investing, say, $20,000 upfront and waiting months to recover it, you can keep your capital liquid, making it feasible to increase order size and scale your business.
Importantly, it reduces the pressure on your business. You’re no longer making high-risk bets; you’re operating within a more flexible system.
Why Most Businesses Don’t Use It
Despite the advantages, many small importers never access supplier credit. Not because it’s unavailable, but because they don’t know how to structure it.
Suppliers don’t simply agree based on a request like “Can you give me 90 days?” They evaluate a buyer’s credibility, the transaction structure, and perceived risk.
Without the right setup, the answer will almost always be no.
Making It Work
In practice, getting access to supplier credit often requires structuring the deal properly. This may include:
- presenting the business correctly
- aligning terms with supplier expectations
- using frameworks that reduce perceived risk
Some companies specialize in helping importers navigate this process. For example, firms like Axton Global work with buyers to structure transactions in a way that enables suppliers to offer deferred payment terms backed by international risk protection systems.
The Bigger Picture
Selling on Amazon is not just about product selection or marketing. It’s also about how your supply chain is structured. Two businesses can sell the same product, but get very different results because one is limited by cash and the other scales faster with better terms from their suppliers.
The difference is not luck. It’s understanding how deals work beyond the surface level.
If you’re planning to start an Amazon business using Chinese suppliers, solving logistics and supplier reliability is important. But solving the money problem is what ultimately determines how fast, and how far, you can grow.
Find a Home-Based Business to Start-Up >>> Hundreds of Business Listings.
