Amazon starts offering sellers 13 percent interest loans

ONLINE RETAILER Amazon is offering third party sellers loans to buy inventory.

Amazon, which promotes third party sellers on most of the products it sells, has got into the lending game. The firm has been sending sellers that use Amazon's online storefront an email in which it introduces Amazon Lending, a loan business that it claims will help sellers buy extra inventory to flog on its website.

According to Amazon Capital Services, the firm judges the seller's performance on its website and pre-qualifies the seller for a particular loan value. If Amazon approves the loan then the seller will see the amount on their Amazon Seller Account balance within five business days, with the monthly repayment being deducted automatically from their Amazon Seller Account.

Amazon's lending services marks an interesting new front for the company that has spent a considerable amount of money trying to change the perception that it was just an online storefront. The firm has invested heavily in its Amazon Web Services product and now is trying its hand at becoming the lender of choice for those who use its website to hawk their wares.

According to Channel Advisor, Amazon is offering these loans with a 13 percent interest rate, not exactly cheap money. It will be interesting to see how many of Amazon's sellers take up the loan offer, and how much loans indirectly help Amazon get more sellers onto its website. µ