The Hidden Cash Flow Challenge of Marketplace Sellers

Matthew Shearer

Last Modified : Sep 09, 2025

Reviewed by: Bruce Sayer

Why Growing Sales Doesn’t Always Mean Growing Profits

Online marketplaces have opened new doors for sellers worldwide, fueling an industry worth an estimated $6.3 trillion in global e-commerce sales in 2024 (Statista). But while the headlines celebrate revenue growth, many marketplace sellers are learning a hard truth: more sales don’t always equal more profits. Beneath the surface lies a hidden cash flow challenge that can hold back even the fastest-growing businesses.

Inventory: The Cash You Can’t Touch

Inventory is the backbone of marketplace sales, but it’s also where cash gets trapped. Sellers often need to pay for products months before they’re sold, tying up working capital in stock sitting in warehouses. According to Shopify, 45% of small businesses struggle with inventory management, with overstocking or understocking directly impacting cash flow.

What looks like healthy growth—thousands of units ready to sell—can actually represent tens or even hundreds of thousands of dollars in unavailable cash. And as consumer trends shift rapidly, sellers risk being stuck with unsold stock that erodes margins further.

Delayed Payout Cycles

Even after products sell, sellers don’t see money right away. Marketplaces like Amazon typically hold funds for 14 days before releasing payments, and in some cases, longer if returns or disputes occur. For high-volume sellers, this delay creates a cash flow gap between when expenses are due (inventory, advertising, packaging) and when revenue arrives.

In fact, a 2023 Payoneer study found that over 50% of marketplace sellers cite delayed payouts as their top cash flow challenge. The irony? The more they sell, the more money they have tied up waiting for release.

Rising Advertising Costs

With millions of sellers competing for customer clicks, advertising is no longer optional. Marketplace ads are big business—Amazon alone generated $46.9 billion in ad revenue in 2023, up nearly 25% year-over-year (Insider Intelligence).

For sellers, this means continually increasing budgets just to maintain visibility. A Jungle Scout survey revealed that 75% of Amazon sellers run pay-per-click campaigns, with many spending upwards of 20–30% of their revenue on ads. Rising costs squeeze margins, leaving little left over for reinvestment or growth.

Supply Chain Disruptions

Global supply chains remain fragile. Shipping costs skyrocketed in recent years, with container freight rates reaching over $10,000 per 40-foot container in 2022, compared to just $1,500 pre-pandemic (Drewry Shipping Index). Although rates have stabilized, delivery timelines remain volatile due to port congestion, labor shortages, and geopolitical instability.

For sellers relying on overseas suppliers, these disruptions delay stock arrivals, extend cash-to-cash cycles, and increase the amount of working capital tied up in transit. Smaller sellers, in particular, lack the negotiating power to absorb these shocks without straining liquidity.

Example: How Cash Flow Gets Trapped in Inventory

Imagine a marketplace seller who imports consumer electronics.

• Step 1 – Placing the order: To prepare for the holiday season, they order 5,000 units from their supplier at a cost of $20 each. That’s $100,000 paid upfront.

• Step 2 – Shipping & storage: Add another $15,000 in shipping, customs, and warehousing fees. Now a total of $115,000 is tied up before a single unit is sold.

• Step 3 – Selling the product: Each item lists for $40. On paper, the seller expects to generate $200,000 in revenue—almost doubling their investment.

• Step 4 – Marketplace payout cycle: Sales begin quickly, but Amazon holds payouts for 14 days. That means the seller has to wait two weeks to see cash—even as ad costs, supplier invoices, and payroll still need to be paid.

By the time money finally lands in their bank account, the seller has already outlaid more than six figures in expenses. Even though sales are strong, their liquidity is weak because capital is sitting idle in inventory and pending payouts.

Breaking the Cycle

Marketplace sellers face a paradox: success requires ever more upfront cash—yet that very growth often creates a cash flow crunch. Inventory sits unsold, payouts are delayed, ad costs rise, and supply chain delays stretch cycles even further.

The result? Many sellers are profitable on paper but cash-poor in reality. Traditional financing isn’t always an option, as banks often shy away from inventory-heavy, small-margin businesses. That’s why alternative financing solutions—such as invoice financing, merchant cash advances, or inventory-backed loans—are becoming lifelines for marketplace sellers.

What if your inventory could unlock the capital you need to grow?

Matthew Shearer

In his role as SVP, Channel Sales at eCapital, Matt he leads our go-to-market strategy for embedded finance solutions. Leveraging his extensive network, Matt establishes new partner relationships and drives revenue, showcasing his dedication to business success and innovation in fintech.

Previously, at Funding Circle US, Matt drove innovative lending solutions as the Head of Financial Institutions for Strategic Partnerships and Enterprise Sales. He also excelled in strategic roles at Alviere and Viasat, and began his career managing diverse lending portfolios at FirstBank, where he cultivated a thriving organizational culture.

Matt holds an MBA from the University of Colorado Boulder and a BBA from the University of San Diego, complemented by a certification in Strategic Sales Management from Harvard Division of Continuing Education.