1 00:00:00.100 --> 00:00:03.500 The significance of the post that I 2 00:00:03.500 --> 00:00:06.500 put out is just that we kind 3 00:00:06.500 --> 00:00:09.200 of have an idea of what they've been 4 00:00:09.200 --> 00:00:12.600 up to by using this one very 5 00:00:12.600 --> 00:00:15.300 particular statistic that they've been reporting in every 6 00:00:15.300 --> 00:00:18.400 quarterly earnings report. It's easy to gloss over 7 00:00:18.400 --> 00:00:21.800 because the earnings report might be like 60, you 8 00:00:21.800 --> 00:00:24.500 know, the financial statement to the court might be like 60 some 9 00:00:24.500 --> 00:00:27.400 on pages that's fine fine print and stats and balance sheet 10 00:00:27.400 --> 00:00:30.200 and p&l and all this stuff and you're like looking through it and 11 00:00:30.200 --> 00:00:33.900 you're just doing you're doing like a search for a certain keywords and 12 00:00:33.900 --> 00:00:36.300 you might not find it. However, if you look for 13 00:00:36.300 --> 00:00:40.300 I think the term was seller seller receivables, 14 00:00:39.300 --> 00:00:42.300 which are defined at the mounts do from 15 00:00:42.300 --> 00:00:45.600 sellers related to their seller lending program. I 16 00:00:45.600 --> 00:00:48.400 said, aha I got you it is. It's been 17 00:00:48.400 --> 00:00:51.200 there the whole time. I mean, I kind of known what I 18 00:00:51.200 --> 00:00:54.200 never just said I never sat down and said, let me let me like make a 19 00:00:54.200 --> 00:00:57.200 chart so I did and so 20 00:00:57.200 --> 00:01:00.100 now we're able to see that they're receiving. 21 00:01:00.100 --> 00:01:03.200 Did go down during it during the period of covid and I know that they did 22 00:01:03.200 --> 00:01:06.100 pause payments during covid as well. 23 00:01:06.100 --> 00:01:09.300 I don't know how long it was for. I did read one earnings report that said payments have been 24 00:01:09.300 --> 00:01:12.200 polished for like 30 days or so, but being that it's Amazon, 25 00:01:12.200 --> 00:01:15.700 it's e-commerce. I don't know how much of a reprieve their 26 00:01:15.700 --> 00:01:18.400 own sellers needed. You know, my understanding of that e-commerce was 27 00:01:18.400 --> 00:01:21.800 like a gold mine during the pandemic and and so we 28 00:01:21.800 --> 00:01:24.300 did I did see that they had pause payments for 29 00:01:24.300 --> 00:01:27.400 some of their borrowers, but at the same time you see 30 00:01:27.400 --> 00:01:30.200 that they're receivables drop or alone with Super Bowls 31 00:01:30.200 --> 00:01:33.300 drop during that time period so that to me looks as though 32 00:01:33.300 --> 00:01:36.500 they probably stop making new loans or 33 00:01:36.500 --> 00:01:38.300 really shrank it significantly. 34 00:01:39.100 --> 00:01:42.600 It could also mean that they moved the you 35 00:01:42.600 --> 00:01:45.400 know, they moved the loans off balance sheet, but I don't really think that that's 36 00:01:45.400 --> 00:01:48.200 the case here. I didn't really see any indication that they're moved their 37 00:01:48.200 --> 00:01:51.400 loans off balance sheet. I think they've been pretty consistent their loan terms 38 00:01:51.400 --> 00:01:54.500 tend to be about 12 months. I think like 12 month terms 39 00:01:54.500 --> 00:01:57.500 you might be able to do like a six-month term for Amazon, but these 40 00:01:57.500 --> 00:02:00.400 These are term loans they do take a percentage of your sales 41 00:02:00.400 --> 00:02:03.600 much like an MCA but it's a loan product. And so 42 00:02:03.600 --> 00:02:06.600 then you see the drop during covid and then all of a sudden 2021 comes 43 00:02:06.600 --> 00:02:09.800 and a 2021 your loan receivables shot up 44 00:02:09.800 --> 00:02:12.400 to 1 billion dollars at the highest. It's been at least over the 45 00:02:12.400 --> 00:02:15.300 last five years that looked at it and so obviously they've been 46 00:02:15.300 --> 00:02:18.200 doing quite a lot of lending in 2021 because 47 00:02:18.200 --> 00:02:21.300 that number shot up and of course, I looked at Q2 the most recent one 48 00:02:21.300 --> 00:02:24.400 that's been available Q3 should be out pretty soon, but they 49 00:02:24.400 --> 00:02:27.800 were already up to 1.3 billion. So the loan receivables 50 00:02:27.800 --> 00:02:30.600 continues to accumulate which means that they're probably making 51 00:02:30.600 --> 00:02:33.600 alone at a faster Pace then they 52 00:02:33.600 --> 00:02:36.100 were before this indicates to me that 53 00:02:36.100 --> 00:02:38.900 they've done at least that they did at least a billion dollars in loans. 54 00:02:39.300 --> 00:02:42.300 In 21, so they're at least the same or better than they were 55 00:02:42.300 --> 00:02:45.000 in 2018. Yep. And you know, 56 00:02:45.400 --> 00:02:48.500 that's that's big in the scope of things. I don't know that it 57 00:02:48.500 --> 00:02:51.200 puts them in the top five. I think you and I were talking about it briefly before 58 00:02:51.200 --> 00:02:54.300 I don't know that they're in the top five. We have a chart on our site. 59 00:02:54.300 --> 00:02:57.700 We have like a list to break down of who's funding what per year origination volumes 60 00:02:57.700 --> 00:03:01.200 but that does make them noteworthy. They 61 00:03:00.200 --> 00:03:04.200 are bigger than a lot of their more Boutique, 62 00:03:03.200 --> 00:03:06.300 you know, Boutique competitors in the space. And so 63 00:03:06.300 --> 00:03:09.400 Amazon the fact that they're doing small business lounge or 64 00:03:09.400 --> 00:03:12.200 they're taking a percentage of sales something everyone needs to pay attention 65 00:03:12.200 --> 00:03:15.400 to because every time we have this conversation of like, 66 00:03:15.400 --> 00:03:18.100 you know this funding who's doing this type of 67 00:03:18.100 --> 00:03:22.200 funding that you know, the small companies that are unregulated who 68 00:03:21.200 --> 00:03:25.100 are these players and it's like no, it's Shopify PayPal 69 00:03:24.100 --> 00:03:27.500 and like oh and the 70 00:03:27.500 --> 00:03:30.100 fact I think the thing that strikes me the most about this whole thing is 71 00:03:30.100 --> 00:03:33.200 that they're you know, they're advertising. It's just within their own 72 00:03:33.200 --> 00:03:35.300 platform and their platform pretty much. 73 00:03:36.200 --> 00:03:40.300 I mean, it runs our life. I mean regardless whether 74 00:03:39.300 --> 00:03:42.700 you want to admit or not. They're everywhere. So they 75 00:03:42.700 --> 00:03:45.500 really, you know regard to advertising. 76 00:03:45.500 --> 00:03:48.400 They're not they don't need to advertise. It just it's something 77 00:03:48.400 --> 00:03:51.300 you would see in your dashboard. If you're eligible for it my understanding 78 00:03:51.300 --> 00:03:55.200 that if you're not eligible for it, you won't see it. And you 79 00:03:55.200 --> 00:03:59.300 know, this is just there. This is just their main product. They 80 00:03:58.300 --> 00:04:01.200 have other products. Yeah that are not 81 00:04:01.200 --> 00:04:04.800 on balance sheet, like for instance. They can refer you to lendustry 82 00:04:04.800 --> 00:04:07.200 and help you get alone through industry. In fact, they did 83 00:04:07.200 --> 00:04:10.300 a pilot program with industry just last year. Yeah, and they 84 00:04:10.300 --> 00:04:13.200 just renew they just renewed it where they they plan to 85 00:04:13.200 --> 00:04:16.600 do 150 million dollars in loans to Amazon 86 00:04:16.600 --> 00:04:19.800 sellers over the next three years through land industry. 87 00:04:19.800 --> 00:04:22.300 So this would be separate from the lending that we just talked about. 88 00:04:22.300 --> 00:04:25.600 Yeah have Amazon's direct lending to sellers. You 89 00:04:25.600 --> 00:04:28.300 can also use the London Street option and 90 00:04:28.300 --> 00:04:32.100 then there's even another option. They have a line of credit option. Yes. I've 91 00:04:31.100 --> 00:04:34.600 heard about the line of credit. It's doing 92 00:04:34.600 --> 00:04:35.900 Marcus by Goldman. 93 00:04:36.100 --> 00:04:37.200 inside and I'm 94 00:04:37.900 --> 00:04:40.500 we've talked about this before I'm always a big Advocate to 95 00:04:40.500 --> 00:04:43.800 see what types of lines of credits. There are out there. What type 96 00:04:43.800 --> 00:04:47.000 of products are because I have you know, I've worked 97 00:04:46.300 --> 00:04:49.800 with different lines of credits in my personal life and in 98 00:04:49.800 --> 00:04:53.600 my businesses and it's always interesting to see who's offering 99 00:04:53.600 --> 00:04:54.100 what products 100 00:04:55.100 --> 00:04:58.400 Yeah, well Amazon now offers to their sellers again. 101 00:04:58.400 --> 00:05:01.900 This is just two years sellers a line of credit through markets 102 00:05:01.900 --> 00:05:04.100 by Goldman Sachs why that significant 103 00:05:04.100 --> 00:05:07.600 it's because well Marcus by Goldman Sachs is really supposed to 104 00:05:07.600 --> 00:05:10.700 be an online saving account in an online consumer lender here. 105 00:05:10.700 --> 00:05:13.900 We see them dabbling in the world of business lending. So 106 00:05:13.900 --> 00:05:16.700 that might mean that if this goes well Marcus 107 00:05:16.700 --> 00:05:19.200 by Goldman Sachs could be doing a little bit more in the 108 00:05:19.200 --> 00:05:22.100 business lending space. I don't know but this is a way 109 00:05:22.100 --> 00:05:23.400 for them to get their feet wet for sure.