Advertising is key for any business but the costs can take as much as 50% of the operating budget, and often with mixed results. Groupon advertising is a great avenue, and invoice factoring is a great way to accelerate payment from Groupon for sales on their platform. Groupon’s advertising model focuses on deals that bring volume sales and new customer traffic, offsetting the large discounts that can be offered. Groupon invoice factoring can be a big help for your business and here is why:
How Groupon Works
When deals are purchased, Groupon immediately takes 50% of the sale proceeds. The business’ portion is divided over three installments; roughly a third of the amount is provided within 7 to 10 days, a third in 30 days, and a final third in 60 days. The processing of payments can take up to 90 days in some cases.
Between the promoter’s 50% discount on the product or service, the business can only expect to receive 25% of the deal’s proceeds. With a minimum wait of 60 days to receive payment, this can be crippling for businesses that heavily rely upon cash flow from Groupon sales. Fortunately, a viable option is available to help the small business sustain capital: Groupon invoice factoring.
Groupon Invoice Factoring: A Solution
Factoring companies rely on the creditworthiness and reliability of the invoiced business, not the business owner. With Groupon a multi-billion dollar business, their credibility speaks for itself (or so it should). The other great news is, in a typical invoice factoring transaction the business can receive as much as 80% of the invoice amount. The factoring company owns the invoice after it is purchased, and takes on the responsibility of collecting the revenue from Groupon. Afterwards, the factor pays the business the balance of the invoice less a small fee. Additionally, a typical factoring transaction takes only one to two days to complete, rather than waiting a full 60 days.
In order to take advantage of Groupon’s advertising model while maintaining steady capital, it’s wise to utilize invoice factoring. This allows for a more predictable business experience, in planning and working with regional and national advertising campaigns.