Ebay via YOULEND - anyone got any pros and cons

 

Hi All,

 

I hope sales are good!

 

Today we received a generous offer from eBay Capital that would be enough to rent a unit for a year. I believe that you pay a daily percentage of sales. The previous similar type of loans via P-pay were very straightforward and handy for a few thousand pounds now and then.

I’ve heard both good and bad things about You Lend. Does anyone have any stories or information before we consider contacting them?"

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Re: Ebay via YOULEND - anyone got any pros and cons


@chrismcc1953 wrote:

@dch2112011 wrote:

It was just a question to do with youlend in that if they are lending money to non business accounts to buy stock and ebay are by default condoning it in the process to avoid  legal requirements to provide consumers with their rights it needs to be questioned -  that was why i queeried wether you were buying stock to sell on the account you were posting from or whether it was for a different business account 

 

If you want members to keep their noses out - don't post the information you do publicly !  

 

Your response sums it up !


Like i said this is a thread about the pros and cons of a loan not my account. What information have I posted other than information about a loan I got, whether I sell as a private or business seller wasn't mentioned by anyone but you.

 


BUT what you are not considering is with the ebay push to stop traders operating on personal accounts is what happens to the you lend account when ebay puts an abrute stop to your illegal trading - pay back from your personal income ? cry it is unfair ? claim you are a victiim ? What ?

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Re: Ebay via YOULEND - anyone got any pros and cons

As a follow-up to my previous posts;

 

I was finally able to pay off my YouLend account and they reached out to me to offer more funding. I referred to their service as a cancer on eBay sellers and provided a link to this post. Maybe they will check it out and taken some lessons on hjow to improve their service, let's see.

 

In the meantime, my choice to use CapitalonTap has been fantastic. Not just because of the instant funding but how I've seen the business grow rapidly over the last couple of months, and the 10% minimum payout  works. As with any card, you only pay this once a month, compared to YouLend where the payments compounds continuously. They haven't pushed me to take on more funds and the ONLY gripe I could find is they how many manual/advanced payments you can make on a daily basis. It's not a big issue, just something to bare in mind with your account.

 

I really hope I've been able to point people towards better options than YouLend!!!

Message 62 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

Klarna for buying stock? Wholesale?? You cannot be serious and your advice seems ridiculous, this is a thread about business loans not catalogue shopping 🤷‍♂️ 

Message 63 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

finally a normal answer.

Your answer is the only valid comment here, should be pinned to the start.
All other people just moaning about to pay back, what is obvious: they get a loan, and they pay it back. But no details about the actual most important thing: How much interest rate, how much is that mysterious "one off pre agreed fee"
There are no any information of the interest rates at the email, nor their info page on ebay.
I have to start filling out my details, and give access to my selling before I could find out how much is that one off pre agreed fee, before I agreed.

Thank you for this answer, now I see it is around 11%. That is too high, so I am out


Message 64 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

You need to consider why the issue of YouLend would even come up, and that's in relation to obtaining additional capital for business growth.

 

It's clear that YouLend has been covered to great degree as a poor option. Klarna might be focusd on retail, but it is a stepping stone for private sellers or new business sellers to gain a small amount of capital or take advantage of wholesale/bulk orders. Klarna is by my experience, limited to £1,000 of credit (this may not be immediate), requires a third of the order to be paid upfront, with the other 2 payments paid monthly, essentially spreading the cost of the order over 60 days, with not interest. So you could potentially order £1500 of stock with an initial amount of £500. That's a nice boost to a business.

 

The only complaint with Klarna is that they are not clear about your credit amount. Unlike ClearPay, they do not show the figure available to you in your account, and it can be frustrating to set up an order and find Klarna declining with no specific explanation or a credit limit. It was easier when Klarna offers an option to set up a digital card for specific websites. However, there was a loophole where you could apply for a card through an approved website (ie eBay), then use it somewhere else. It seems they may have caught on to this and this options seems to have disappeared, so Klarna use is now very limited to websites specifically offering Klarna as an option.

 

My advice, from my experience, is by all means, have a ClearPay and Klarna account, as it comes in handy as an interest free option to spread the cost of large orders from some suppliers, giving access to more products or lower prices than you might have otherwise obtained. However, long term, it can be too limiting and like myself, you may eventually need to acquire funding more representative of your long term business growth.

Message 65 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

Hi 

 

Its currently 11% up front added to the loan. £10000 advance = £11,100 Debt at the outset. 

If you are registered for VAT  this type of loan is a nightmare.  Not only do you not receive

20% of your takings you have to gross your sales up and pay the VAT output tax on it.

 

Regards

Ann

 

Message 66 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

That's an 11% deduction from your top line, so convert that to your actual net profit, it's closer to around 20-25% once you account for eBay fees, packing costs etc. It's all been said above, that the compound impact of these significant deductions will shrink your business, not grow it, even if the capital injection gives you a initial boost.

Message 67 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

stay away from them. 

Message 68 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

The above replies are correct. They make no allowance for if you want to maybe close your shop for a few weeks for Christmas /vacation. They are still wanting their cut (even if there are no sales) and hassling you to pay by bank transfer. Never had this probem with PayPal WC as they worked over a 3 month period so it was easy to catch up on missed sales. I would not take a second loan.


Message 69 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

Hi, I'm astonished by this reply if I'm honest.  I'm mostly out of the eBay game now.  To be honest Youlend was one of the reasons why.  I'm not an 'expert' so to speak but lets look at your claims.

You made £12,000 from a £3000 loan.  Okay...

'''''Youlend take 25% of that £12,000 so there is £3000 gone'''''

 

Surely that £3k was also the capital investment in stock?

Message 70 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

You need to consider compound growth. A £3k loan for stock, that you sell for a 10% profit, leaves you with £3,300. Repeat the transaction cycle and you end up with £3,630.

 

The issue with YouLend is they take a 10% sweep from your sale amount, once you factor in eBay fees etc, they are taking 20% of your income. So instead of 10% profit, you make 10% loss. As there is no cap on how much they take over time, it is more than just losing 10% of your sale, but the negative compound effect of losing 10% off every sale, having 10% less to buy stock, 10% to cover expenses etc. So instead of growing your business, your loss on all your sales shrinks your business at an increasing rate.

 

Consider the chart below. If you started with £1,000 and make 10& profit in a month, then reinvest those funds back into the business and repeat, your hit over £3k revenue in 12 months. If you borrow £3k from YouLend, on a 10% sweep, assuming this is 20% of your income, your 10% loss per month takes you down to just making £647 after 12 months. Assuming your overheads are £1k, you are operating at a loss after 9 months and still haven't paid back YouLend.

 

This is an illustration and obviously differs by what deal you make with them and how profitable your business is. Generally 10% profit is good and the minimum I aim for when listing a product, but the more income you make, the more YouLend take as it's tied to the same percentage with no cap.

 

I've had a very frank conversation with the staff there about this issue and there are aware of it, agreeing they need to look at eBay in a different way. There is room to negotiate down the sweep rate. It's claimed it can go as low as 3%, but the weird thing is, the more your borrow, the higher the sweep amount. Completely the opposite of how a loan usually works! It seems the sweep is covering risk. If you are making enough revenue, you can borrow a small amount and argue that with your revenue, you could pay it back very quickly.

 

Consider this, you make £200k a year revenue and want to borrow £5,000. With a 10% sweep, (20% if income) you're pay that back within 2 months. Why would you do this? Let's so it's to take advantage of a bulk deal, or cover postage fees over Christmas, or replenish stock sold over that busy time period. Your revenue keeps you far above your overheads line and makes you low risk, so you can likely argue them down closer to 5%. Their sales staff would likely go for it as they make money on the contract fee.

 

Just don't put that scenario to someone only making £20k a year, as the impact of losing 20% of revenue to a small business, is too impactful at such an early stage. I've said it before, register as a business and get a business credit card. I use CapitalOnTap and it works for me.

 

Honestly, I think this thread is at a point where people really need to be more specific about their circumstances. The general idea of YouLend has been down to death and if people really want advice, give us specifics!

 

Self-Fund vs YouLend.jpg

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Re: Ebay via YOULEND - anyone got any pros and cons

Thanks for all that but if folk are only marking up 10% then they are doomed to failure with or without funding

Message 72 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

Marking up and margin are different things.

I would imagine that in this case they were talking about a profit margin of 10%, which is very different to adding on 10% to cost price.

As to whether or not someone can make money with only a margin of 10%, it is quite possible to do so.  It just depends on the model they are following.

There are many cut price retailers out there that make margins less then 10% and they seem to do alright.

 

Message 73 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

Not at all and that's rather simplistic approach to business. 10% is actually good in a competitive market when some companies are taking a loss-leadership position on products to bring in customers. There's also many other factors, largely turnover rate. If 10% profit allows you to turn over more products within a given time, compared to someone more expensive based on a 20% margin-up, you can make more money within the same time period, largely as you take a high portion of their business then you would if you matched their price.

 

You just have to compare to the stock market, with all the fuss being made over 1-3% rises in prices. If you're familiar with value investing from Benjamin Graham then you would know it's not about the initial margin, but the power of compound growth from reinvesting that 10% back into the business. So the compound effect of a loan can be devastating to a business if the figure is too higher.

Message 74 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

Any eBay seller worth their salt would be familiar with eBay calculators when setting their prices:

 

https://www.ebayfeescalculator.com/uk-ebay-calculator/

 

In most cases, you need to sell for double your cost price to mark 10%. I've seen many sellers listing products at a loss, as if they haven't factored in these fees, or have a supplier given them incredibly low prices. They eventually stop trading on eBay though, so I can assume it doesn't work out well for them. With so many amateurs on eBay. there is some merit to YouLend charging so much for the risk.

Message 75 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

So I am a bit confused, in your first post you say 10% is good mark up then in your last you say it should be 50% to cover fees?

Message 76 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

No idea why your  telling me that, I never responded to you!

 

Utterly  pointless post.  And nothing to do with what I said.

Message 77 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

In order to mark a 10% profit, you need to account for fees. Once you factor in tax, transaction fees, proportional fees, shipping, packing materials etc, you typically have to charge double your cost price to make a 10% profit. There's more give in higher priced items, but eBay taking 12.9% by default, plus promotion %, then tax being 20%, then competition, hitting 10% consistently is excellent. You just don't need YouLend coming in and taking 20-25% of you sale price in their 'sweep'.

 

Sellers who don't account for fees is exactly why I referred to amateurs on eBay. I have little sympathy for people who start a business and don't study business an inevitably fail.

Message 78 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

I appreciate your input, I am guessing you are a Uni Grad, as you have never sold anything on Ebay, personally, I think while your advice is correct to a point it doesn't really help the OP's question.

 

Getting a loan or committing your own money to purchase stock is only worth it if you are confident that you can sell the stuff in a reasonable time and at a decent profit. I would recommend  to any one selling low ticket goods with a view to anything up to a £2K turnover to look to start at a core mark up of 200%, that is to say original cost of goods £5 sell for £15 you can be sure most high street clothes shops will work with a wider margin than that (400-500% but I appreciate they have significantly higher and different overheads) If you need to borrow £1000 to do that, paying 10-15%% interest (or fees as YouLend put it) will only eat a relatively small amount into the bottom line. 

 

Good luck with your studies it is good for you that you understand things as you seem to do at the beginning of your career

Message 79 of 101
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Re: Ebay via YOULEND - anyone got any pros and cons

You do realise that your both talking about the same thing, but in a different way?

 

At the end on the day, recommending a core markup of 200% is utterly meaningless, without knowing how the person your recommending it to is trading etc.

As to whether or not the loan will work for said person, only they can really decide if it's a good or a bad deal.

The main thing being, that you understand how it actually works as the YouLend loan is quite different to other loans.  ie. you pay a percentage of your turnover back.  The higher that percentage is, the harder it's going to be to make a profit.

That is of course irrespective of fees, which should be accounted for as well.

 

It will work well for some and not so well for others.

Ensure that you can afford to take a loan.  Understand how it works and use it for what it's supposed to be used for.  Don't fritter it away.

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