Whether you need to fund a project or cover business expenses, there are plenty of financing options out there. Many small business owners turn to business loans and business lines of credit, the two most popular funding options in the Federal Reserve’s Small Business Credit Survey.

But what’s the difference between a business line of credit and a loan? A line of credit allows you to borrow up to your credit limit anytime during the draw period—which is why business owners often use it for covering periodic or emergency expenses. A business loan gives you the money upfront and comes with predictable payments, which you might opt for if you need a large amount for a specific purpose, such as investing in the business’s growth.

These financing options have other key differences as well as similarities. Here’s a breakdown to help you figure out which is right for you.

What is a business line of credit?

A business line of credit (LOC) is a flexible funding option that provides business owners with working capital on demand. It works like a credit card (i.e., you borrow funds up to your credit limit and pay interest only on the funds you withdraw). You can then choose whether to pay off some or all of the balance and borrow again as needed.

Lines of credit often come with a lower borrowing limit compared to what you can get with a business loan, and you may need to pay an annual fee and other costs. These loans usually come with variable interest rates that can rise or fall over the repayment term. That’s why this funding option is typically used by businesses that want ongoing access to financing to even out their cash flow gaps or to tap for emergency expenses.

What is a business loan?

A business loan is more straightforward than a line of credit. You receive the entire loan amount as a lump sum upfront, then repay the balance through installment payments—usually over a few years. Interest rates tend to be fixed and won’t change as you pay off the balance. Unlike a line of credit, you’ll need to apply for more funding if you want to borrow more. Companies that need financing for a specific project, investment, or acquisition might opt for a business loan.

Business line of credit vs. loan: What’s the difference?

• Amount borrowed
• Fees and interest
• Repayment terms
• Collateral
• Personal guarantee
• Eligibility criteria

Both financing options can provide funds to cover business expenses, but they vary in a few key ways. Let’s dive into the similarities and differences between a business line of credit and a loan.

Amount borrowed

Lines of credit come with a trade-off: a lower borrowing limit (compared with term loans) in exchange for the ability to access your funds repeatedly over the draw period. Borrowing limits often come out to around $250,000 with a draw period of about three to five years.

Business term loans often provide up to $500,000, but some lenders extend much larger loans. For example, some loans backed by the Small Business Administration (SBA loans) reach $5 million.

Fees and interest

Borrowers pay interest, the main cost of borrowing money, on both financing options. Interest is usually expressed as an annual percentage rate, or APR, and acts as compensation for a lender taking on the risk to provide a loan. A higher interest rate results in higher borrowing costs and vice versa.

Lines of credit often come with variable interest rates, while term loans are typically fixed. In a 2024 Federal Reserve study, APRs were slightly lower on lines of credit compared to term loans. An additional benefit: You’ll only pay interest on the funds you draw with a line of credit.

Both loans and lines of credit may also charge fees, such as origination fees, prepayment penalties, and late fees. But lines of credit may come with additional charges, such as annual, inactivity, or per-draw fees.

Repayment terms

With a business loan, you’ll pay off the debt in set installments over the loan term with a fixed interest rate. Each payment usually includes a portion of the loan principal plus interest. This financing option usually comes with longer repayment terms compared to a line of credit.

A credit line is more nuanced. You can typically draw funds from the account repeatedly during a draw period, which can last up to several years, if it’s a revolving credit line. There are minimum monthly payments (which include interest) during this time frame, though you can choose to pay the minimum, pay the entire balance, or do something in between.

You won’t be able to withdraw funds once this period ends. Depending on the terms of your contract, the lender may either require a balloon payment or convert any remaining balance to a loan that’s payable over a brief set period.

Collateral

Business loans and lines of credit can either be secured, meaning they’re backed by business assets, or unsecured. With a secured loan or LOC, the lender can take the collateral and sell it to recoup its losses if you default on payments.

Whether the financing is secured or unsecured depends on a few factors, such as the borrowing purpose and the business owner’s creditworthiness. For instance, equipment financing and commercial real estate loans are often provided as secured loans. Some borrowers with poor credit must provide collateral to reduce the lender’s risk.

If you take out unsecured forms of debt, the lender bases your eligibility on your credit history instead of requiring collateral.

Personal guarantee

A personal guarantee is a statement that you (as the business owner) will step in and repay the debt if the business defaults on its loan terms. These are very common for business financing, whether you take out a business line of credit or a loan. But they differ from collateral, which is a specific asset a lender can take after a business defaults. Collateral doesn’t specifically require the owner to be personally liable.

Eligibility criteria

Before you can borrow money, whether it’s a loan or a line of credit, lenders check your ability to repay the funds. They’ll usually review your credit history, check your monthly revenue, and set a minimum “time in business” requirement. Lenders will also request your recent financial statements and may require that you have a business checking account and a strong credit score.

The qualification requirements vary with each type of lender and the specific institution. Traditional banks often set stricter criteria compared to online banks, credit unions, and CDFIs. Between loans and lines of credit, the latter often have easier qualification requirements.

Some business loans can be used only for specific purposes, such as equipment or real estate. Lines of credit are often more flexible and can be used for any business purpose. But as with any financing option, it depends on the terms of your contract, and lenders usually want you to state the purpose of the loan or LOC when applying for funding.

How to get a business line of credit or a loan

• Credit unions
• Banks
• Online lenders
• CDFIs

You can get a business line of credit or loan at many different financial institutions. Here’s a breakdown of how you can get the ball rolling with each option.

Credit unions

Credit unions are not-for-profit institutions that tend to offer lower interest rates than their bank counterparts. However, you’ll need to join the credit union before applying for a loan or line of credit. Additionally, credit unions may offer fewer business financing options compared to banks and online lenders. This type of lender is often a good fit for small businesses and startups, as credit unions may be more willing to work with them than traditional banks.

Banks

Large national banks tend to offer low interest rates, but they also set strict eligibility criteria. Approval usually requires a credit score of around 670 or higher, at least two years in business, and annual revenue of around $200,000 or more. If you’re having trouble qualifying with these traditional lenders, try a community bank. In the Fed’s survey, businesses were fully approved more often at small banks than at large banks.

Online lenders

Online lenders are financial institutions that operate entirely online. They often process applications more quickly and set looser eligibility criteria. In the Fed’s survey, small business owners with bad credit were more likely to be approved for financing at online lenders than at other sources. The trade-off is that you’ll typically pay a higher interest rate and more fees to offset the lender’s risk.

CDFIs

Community Development Financial Institutions, or CDFIs, are nonprofit lenders that serve low-income communities and individuals who can’t qualify for a traditional loan, typically due to a lack of credit history and/or collateral. These institutions often provide lower interest rates and longer repayment terms on business financing.

However, businesses usually need to meet strict eligibility criteria, which may explain why only 6% of respondents in the Fed’s survey borrowed from one of these lenders. You can search for CDFIs to see if one matches your needs.

*Shopify Capital loans must be paid in full within a maximum of 18 months, and two minimum payments apply within the first two six-month periods. The actual duration may be less than 18 months, based on sales.

So you had your eureka moment—congrats! But your great idea is just the first step to starting a business. You may also need funding to cover your startup costs and, eventually, fund your growth.

Raising capital is an obstacle some businesses never clear. According to federal data, about 22% of new businesses fail within their first year, often because of a lack of cash. Fortunately, there are multiple ways to secure funding for your fledgling enterprise. Here’s a rundown of how to raise capital for your new business.

6 ways to raise capital

1. Self-funding
2. Angel investors
3. Venture capitalists
4. Bank loans
5. Crowdfunding
6. Friends and family

Here’s an overview of some of the most popular ways to raise capital:

1. Self-funding

Also known as bootstrapping, self-funding involves using personal savings and resources instead of external debt or equity investments to start your business.

Advantages of self-funding:

• Control. You retain complete control over your company without giving equity investors ownership or decision-making power.

• No debt. You don’t need to worry about making monthly loan payments and can avoid the interest costs that come with debt.

• Strong signal to investors. You may attract future investors by showing your commitment and ability to expand your business with minimal funds.

Disadvantages of self-funding:

• Limited resources. You may need to operate on a tight budget, which could slow growth and limit opportunities.

• Personal financial risk. You assume all the financial risk, which can be a heavy burden if the business fails.

• Opportunity cost. You may need savings for other uses, such as family emergencies. Or you may realize the money could have been spent on another business idea for higher returns or less risk.

2. Angel investors

An angel investor is typically a wealthy individual who uses their own money to invest in your startup, usually in exchange for an ownership stake in the business.

Advantages of angel investment:

• Mentorship and guidance. Angel investors may provide advice on scaling, hiring, fundraising, and market strategy.

• Networking opportunities. Angels can help you form strategic partnerships with people in their personal and professional network, such as potential customers and future investors.

Disadvantages of angel investment:

• Limited contributions. Angels typically invest $25,000 to $500,000, which may not be enough if your startup has significant capital requirements.

• Reduced control. Startups often give angel investors equity, which means losing some decision-making control over your company.

3. Venture capitalists

Venture capitalists (VCs) are professional investors or firms that invest in companies with high growth potential in exchange for equity or ownership.

Advantages of venture capital:

• Substantial funding. VCs can afford to invest the large amounts—hundreds of thousands to millions of dollars—that are often necessary for rapid growth.

• Expertise and mentorship. With their industry experience and connections, venture capitalists may provide strategic guidance. Firms often offer dedicated portfolio services to help with recruiting, marketing, and product development.

• Networking opportunities. VCs may connect you to their personal and professional network, helping you build valuable industry contacts, customers, and partners.

Disadvantages of venture capital:

• Loss of equity and control. Venture capital firms may demand a substantial share of equity and a board seat, limiting your control over the company.

• Pressure for returns. VCs expect high returns relatively quickly, which may put pressure on you to meet their expectations.

• Long vetting process. A venture capital firm will thoroughly vet your business before investing, often taking a few months to complete their due diligence.

4. Bank loans

Taking out a small business loan means borrowing money from a financial institution, like a bank, and repaying your debt with interest and fees. This may be a good option if you have a steady cash flow and have been in business for at least six to 12 months.

Advantages of bank loans:

• Predictable payments. Bank loans are usually repaid in fixed installments over a set period, such as five to 10 years or more. This predictability helps you budget.

• No equity dilution. No need to give up an ownership stake in your business or hand over decision-making powers to investors.

• Credit health. By consistently making on-time payments, you can build both business credit and potentially personal credit.

Disadvantages of bank loans:

• Collateral requirement. Some business loans, including US Small Business Administration (SBA) loans, require collateral—assets or property that you offer to a lender as security for your loan. If you fail to repay, the lender can seize the collateral to recover the amount.

• Strict eligibility criteria. Financial institutions often set strict requirements, including minimum time in business, credit score, and steady cash flow, which you prove through financial statements.

• Debt burden. You must make monthly payments until the debt is paid off, incurring interest costs along the way.

5. Crowdfunding

Crowdfunding is raising money from many donors, typically through an online platform like Kickstarter, GoFundMe, or Indiegogo. You offer various types of rewards to your backers in exchange for different levels of support.

Advantages of crowdfunding:

• No repayment or credit check. If you run a donation, reward, or equity crowdfunding campaign, you don’t need to repay the funds or pay interest on the amount raised. You also don’t have to go through a credit check.

• Creates an engaged audience. Backers are interested in what you have to offer and may become customers once you launch your business.

• Quick path to funds. Crowdfunding platforms often limit campaigns to 60 days, providing a quick way to raise funds (if successful).

Disadvantages of crowdfunding:

• Limited contributions. Crowdfunding campaigns raise an average of $28,656, which may not be enough to cover your startup costs. You may have to combine this funding strategy with another source.

• Dilution of ownership (equity crowdfunding). When you raise money through equity crowdfunding, you’re selling shares of your company, meaning you’re giving up some ownership and potentially some control over business decisions. This dilution continues with each funding round.

6. Friends and family

Your personal connections, like friends and family members, may also be willing to contribute to your endeavor. This may be a good option if you have a strong support network willing to back your vision.

Advantages of raising from friends and family:

• Fast and straightforward. Unlike traditional investment channels, securing funds from friends and family is often quicker and involves fewer formalities.

• Flexible terms. Repayment conditions and interest rates tend to be more lenient than those of banks or venture capital investors.

• Emotional and moral support. Beyond financial backing, personal connections can offer encouragement and motivation during your startup’s early stages.

Disadvantages of raising from friends and family:

• Risk to relationships. Business setbacks can strain personal relationships, leading to tension or conflict.

• Limited capital. Friends and family may not have the financial means to provide substantial funding, limiting your growth potential.

• Lack of strategic expertise. Unlike professional investors, your friends and family may not offer the same valuable industry insights or networking opportunities as VCs or angel investors.

Funding stages

Businesses that raise money from venture capital investment typically do so in stages, starting with seed and pre-seed funding, followed by Series A, B, C, and additional rounds as needed. Here’s a breakdown of each stage of the capital-raising process:

• Pre-seed and seed. This is the money that helps get your business off the ground. Pre-seed funding could precede investment from venture capitalists (VCs), possibly coming from the founders’ personal savings or friends and family. Early stage startups usually use this capital to do market research, draft business plans, and work on product development and prototypes.

• Series A. Series A is for proving that you have a business model with long-term potential. Once you’re open for business, investors can help you scale operations, expand your team, and refine the product or service.

• Series B. At this stage, you’re ready for significant growth initiatives, often involving larger VC firms. Businesses that reach Series B have an established market presence and are looking to prove that they can scale their ideas.

• Series C and beyond.Later-stage funding rounds can finance entering new markets, acquiring other companies, or preparing for an initial public offering (IPO). Institutional investors like private equity firms, investment banks, and hedge funds are typically involved.

Tips for raising capital

• Know your financial needs
• Diversify your funding sources
• Link to business milestone
• Prepare for due diligence
• Plan the exit strategy

Here are a few tips to keep in mind when raising capital:

Know your financial needs

Identify your startup costs and create a budget if you haven’t already. Knowing how you’ll spend the capital you raise can help you figure out how much you need and where to raise it. Then create a funding strategy for each stage that aligns with your evolving needs.

Diversify your funding sources

Depending on a single funding source is risky, potentially creating financial vulnerability and limiting flexibility. Plan to raise funds from several sources, such as combining government grants with business loans.

Link to business milestones

If you plan to raise money from investors over time, your fundraising strategy should align each investment round with key business milestones. Investors expect a clear roadmap showing how their capital will drive value—whether through a product launch, user acquisition goals, or reaching profitability.

Prepare for due diligence

Investors will go through your financial statements, business plan, and legal documents to evaluate your business before pledging funds. Gathering and reviewing these documents beforehand can help you pass this review.

Plan the exit strategy

Plan for the long term and ask yourself, what’s the exit strategy? The answer will influence how you fundraise. For example, if you want to run the business forever, seeking VC investment may not be the best option. You might plan for an initial public offering (IPO) and sell shares on the stock market or set a goal of being acquired by a larger company. All of these decisions can influence funding choices and investor selection.

*Shopify Capital loans must be paid in full within a maximum of 18 months, and two minimum payments apply within the first two six-month periods. The actual duration may be less than 18 months based on sales.

Think of your finances like a busy train station—your personal and business funds are two different lines running on separate tracks. Mixing them in one account is like sending every train to the same platform: confusing, inefficient, and risky.

A checking account is one of the key tools for managing your finances. But it’s important to keep your personal and business finances separate. You need a distinct account to take in your organization’s revenue and pay for business expenses. Having separate hubs for your personal and business funds may even be legally required for some business types.

Understanding the differences between business checking and personal checking accounts can help you better size up your options and know what to look for.

What is business checking?

A business checking account is where you can handle daily business transactions. For instance, you can deposit funds, process customer payments, handle payroll, or pay suppliers. You’ll typically get a debit card to use with the account, and you may also get access to a business line of credit if you’re eligible. The same goes for a business loan.

These accounts often come with banking tools tailored to the needs of business owners. Depending on the account, you may have access to bookkeeping integrations, cash flow monitoring, employee debit card access, and invoicing features. As a downside, basic business accounts may limit the number of transactions you make each month—although you can sometimes upgrade them for a fee to get over this hurdle. They also come with maintenance, cash deposit, and wire transfer fees, as well as other costs to keep the account open.

What is personal checking?

A personal checking account is where you can manage your day-to-day personal expenses and income. You might use this type of checking account to receive your direct deposit paychecks, pay household bills, deposit funds, withdraw cash, and send money to friends.

You typically get a debit card linked to the account and checks to make payments as needed. These accounts may come with simple budgeting features, but they’re usually not as robust as the tools that come with business checking accounts.

Some banks have rules against using a personal checking account for business purposes—and may close your account if you break those rules.

Business checking vs. personal checking: What’s the difference?

• Deposit insurance
• Access
• User roles
• Business tools
• Transaction limits
• Fees
• Earning interest
• Accepting credit card payments

Business and personal checking are two types of accounts that help you manage transactions. They both offer deposit insurance and charge fees, but they’re geared toward different audiences and come with different features. Let’s explore the commonalities and differences.

Deposit insurance

Personal and business checking accounts both come with deposit protection, which reimburses you for the funds in your account if your bank or credit union fails. The Federal Deposit Insurance Corp. (FDIC) provides this type of insurance for federally insured banks, while the National Credit Union Administration (NCUA) provides coverage at federally insured credit unions.

Business and personal accounts both have the same standard insurance limit of $250,000. Each depositor receives at least this amount in coverage at each insured institution for each account type. Business accounts are insured separately from the individual accounts of the business owners, with the exception of a sole proprietorship.

Access

Both personal and business bank accounts provide several ways to transfer, withdraw, or otherwise use your money. Personal and business checking both usually let you withdraw cash at ATMs, set up wire transfers, and send money using peer-to-peer payment services. Both types of accounts may also provide access to the Automated Clearing House (ACH), where you can send and receive payments and transfer money between bank accounts. The bank or credit union will also provide a debit card and checks. To manage your money, you can usually log in to a mobile banking app or your online banking account.

All bank accounts come with high-level security features, such as multifactor authentication and fraud detection. But because business checking accounts handle higher transaction volumes and may carry higher liability risk, security is often more robust. For example, the accounts may come with dual control requirements (where two employees must approve certain transactions), more sophisticated fraud detection, IP address restrictions, token-gated login, and more.

User roles

Both business and personal checking accounts allow you to grant access to authorized users, but with a business account, you can be more nuanced with permissions. Business checking accounts often allow you to assign different permissions and features to employees. For example, a manager may be able to pay bills up to a certain limit using a debit card or setting up digital transfers.

Jointly held personal checking accounts usually don’t offer this type of controlled access. Each user has equal permissions to the account.

Business tools

Many business checking accounts provide access to a robust suite of business tools, which can help you run your business more efficiently.

For example, Found Bank’s business checking account helps you estimate your tax payments, categorize your transactions, and look for deductible expenses to reduce your tax bill. It also integrates with your accounting software. Bank of America’s business checking accounts also offer this feature and help you check your business credit score for free. These business specific features can help make tax reporting and finance tracking easier.

Personal checking accounts, on the other hand, typically offer fewer, less-advanced features. For example, Bank of America’s budgeting tool helps you track your income and expenses on the mobile app, while SoFi’s checking account allows you to earmark funds for different purposes.

Transaction limits

Business checking accounts typically have large deposit limits but may limit the number of free transactions you can make, such as 100 or 200 per month. You might pay a fee, such as 50¢, for each transaction beyond your agreed number.

Personal checking accounts often come with lower deposit limits but don’t restrict the number of transactions you can make.

Fees

You can often find free personal checking accounts that come with no monthly service fees, opening deposits, or minimum balance requirements. If you do open a checking account with maintenance fees, you can often avoid the fee by meeting criteria, such as exceeding a minimum deposit amount.

Business checking accounts often set minimum opening deposit or minimum monthly balance requirements in order to waive or lower their monthly fees. They may generally charge higher fees than personal accounts for monthly maintenance and services like cash deposits.

Financial institutions may offer savings accounts you can link to for overdraft protection, which can help you avoid some fees. This feature may be available with both business and personal checking.

Earning interest

Some business and personal checking accounts pay interest on your balance in the form of an annual percentage yield (APY). Depending on the account’s compounding schedule, interest may be calculated daily, monthly, or quarterly.

The bank or credit union may require you to meet certain requirements, such as receiving direct deposits each month or maintaining a certain balance, to earn the best APY.

Interest-bearing accounts are more likely to charge monthly maintenance fees, so you’ll need to do the math to determine whether the account benefits outweigh those fees.

Accepting credit card payments

Many business checking accounts offer merchant services, which let you accept customer payments via credit card, debit card, or mobile app. Personal checking accounts lack these features, though you can transfer money to friends and others using a person-to-person payment app.

How to open a business checking account

It takes just a few minutes to open a business checking account. Preparing in advance can help make the process easy.

1. Consider your needs. For example, are you looking for a bank or credit union that has branches and ATMs nearby? Very small businesses might need a simple account for their business related expenses, while larger businesses with more employees may need extra features and higher deposit limits.

2. Gather documentation. Banks typically ask for copies of your business’s formation documents, ownership agreements, and business license. You’ll also need an employer identification number (EIN), or a Social Security number (SSN) if you’re a sole proprietor. Check your bank’s specific requirements in advance because it may request additional documentation.

3. Review your options. Research business checking accounts at several banks, credit unions, and online institutions. Compare details like available business tools, fees, introductory offers, interest rates on deposits, minimum account balance, and opening deposit requirements.

4. Submit your application. Once you choose a financial institution and the best checking account for your situation, fill out the application, and submit copies of your documents. Most banks and credit unions let you do this online, but you may be able to complete the step in person.

5. Open the account. If your application is approved, you’ll sign your account documents and make the minimum opening deposit, if there is one. You can also typically set up account access online and in a mobile app.

Let’s say you’ve got a $10,000 marketing budget. Should you go all-in on paid advertising, allocate a portion to influencer marketing, or invest in search engine optimization (SEO)? Some entrepreneurs get giddy in the face of decision-making, others get the jitters, and most experience both at some point.

But the ability to make good choices in a work setting is essential for company success. Your decision-making skills impact the future of your business, from high-level marketing strategy down to the details that form your customer experience.

Learn about the key components that go into this valuable workplace skill and how to get better at making thoughtful business decisions with confidence.

What are decision-making skills?

Decision-making skills are the combination of skills you use to evaluate choices. They help you remove roadblocks affecting everything from company-wide initiatives to your day-to-day business operations. Whether you need to choose a marketing slogan or build a new team workflow, the ability to make the right choice efficiently and confidently is critical for success.

Good decision-making skills demonstrate your strength as a leader, give your team confidence, and guide your company toward a collective vision. Making efficient and quick choices is the pinnacle of good decision-making and an incredibly valuable skill.

Key components of decision-making skills

1. Creative thinking
2. Organization
3. Time management
4. Leadership
5. Problem-solving
6. Emotional intelligence
7. Critical thinking

Here are the essential skills you need in your toolbox to become a better decision maker:

Creative thinking

Creative decision makers develop original ideas that are uniquely suited to their business and the challenge at hand. Ask yourself which choices will make your brand stand out from competitors. For Douglas Watters, the founder of nonalcoholic beverage brand Spirited Away, that choice was to start local and prioritize the consumers in his community.

Douglas decided to keep the shopping experience personal by launching with a brick-and-mortar store—and that decision was the right one. “About 90% of our orders come from in-store shopping because people want to shop for beverages in person,” he says on the Shopify Masters podcast.

While the brand offers online orders to handle local deliveries and in-store pickups, Douglas followed his conviction to remain local. While this choice may be surprising among ecommerce brands that prioritize online sales from day one, this creative yet logical thinking allowed Spirited Away to curate an intimate retail experience that appealed to their target market.

Organization

When you’re organized, you’re more likely to be productive, calm, and clear-headed under the pressure that comes with making critical decisions. Being organized comes in many forms, from keeping detailed notes to having dedicated time in your schedule to think through company strategy without distractions.

When it comes to effective decision-making, staying organized means you have all the necessary information readily available—from financial statements and market trends data to customer data—to help you make the best choice. Timely decisions are easier when you have all your data tracked in one place. If you run a handbag company and are wondering whether to launch a bold color or neutral, having a database of customer purchase history will help you identify the best-selling shades.

Time management

Can you make a final decision without spending too much time deliberating? There’s a time to take the decision-making process slowly and a time to make it snappy. For example, if you need to decide on a social media advertising campaign that’s dependent on a trend, you risk missing the trend’s window of virality if you take too long to deliberate.

When you need to make a timely decision, time management techniques—like giving yourself a deadline or clearing time in your day to focus solely on the decision at hand—can make you a faster decision maker.

Leadership

When you demonstrate decision-making skills, you’re demonstrating leadership skills. Decisive business leaders can inspire confidence in those around them and set an example for others on how to approach decisions. Good leaders also encourage team members to contribute to business decisions.

Try holding an open forum involving numerous people from different teams to contribute suggestions and ideas on where to take your next marketing campaign. This gives your team insight into your decision-making process, which can encourage professional growth and ownership of positive outcomes.

Problem-solving

Problem-solving, which identifies issues and possible solutions, is often a step along the journey toward making a decision. Identifying problem patterns means you can plan in ways that avoid repeating issues.

For example, shopping cart abandonment remains a common problem for online retailers. To solve this problem, you can start tracking your website’s cart abandonment rate, then generate a list of practical solutions, such as strengthening calls to action (CTAs) on your checkout page or emailing reminders about abandoned carts.

Emotional intelligence

Emotional intelligence helps you make workplace decisions with care and understanding, manage your emotions in a high-stakes work environment, and respond appropriately to coworkers and customers. It’s also a key component of being a rational decision-maker who doesn’t let emotion cloud their judgment.

Displaying emotional intelligence can also enhance your brand reputation and build consumer trust if you’re known as an authentic, transparent company. In turn, this can build customer loyalty.

Critical thinking

Critical thinking is the ability to evaluate and synthesize information to form a judgment or solve a problem; it’s the core of all decision-making abilities. As a business owner, you’re bound to come across countless tough decisions, especially when it comes to how you allocate funds.

In a Shopify Masters podcast interview, Shanae Jones, founder of Flyest, discussed the importance of weighing the potential outcomes of every choice. “When you are spending money on your business, you have to consider what the returns are going to be,” she says. “Are you going to be able to live with the decision?”

For every decision you need to make, evaluate how the outcome might impact company strategy and your bottom line. Run a cost-benefit analysis that considers labor, materials, and opportunity costs. Compare those to projected benefits, such as increased revenue and boosted brand awareness.

5 tips to improve your decision-making skills

• Reflect on past decisions
• Give yourself a deadline
• Use decision-making tools
• Collaborate with your colleagues
• Stretch your creative muscles

Reflect on past decisions

Take the time to learn from past decisions by collecting feedback from one or more teammates and carving out time to reflect on your own. Assess why they were or weren’t the right move, and identify what you could have done differently. When you retrace your past actions, you can better prepare yourself for the future.

You can also evaluate the outcome of a decision using data. Look at revenue reports or conversion rate reports to determine if the latest product you added to your inventory was the right move, for example.

Give yourself a deadline

Decision paralysis is when you get stuck in the decision-making process due to fear of making the wrong choice, often in the face of an overwhelming number of ways forward. Giving yourself a strict timeline, including a deadline to make a call, can help you build the habit of making sound decisions quickly.

Use decision-making tools

Use a decision matrix to clearly evaluate your choices. This tool compares your options based on different criteria using a rating scale. Say you’re deciding between two manufacturers. To pick which one to work with, you rate each based on its cost, reliability, and location. The manufacturer with the highest total score wins.

You can also consider using the tried and tested method of a pros and cons list. This simple yet effective strategy allows you to visually compare the benefits and drawbacks of each option you’re deliberating.

Collaborate with your colleagues

Discussing a decision with others gives you access to different perspectives and all the factors at play in your decision, even those beyond your own expertise. The more you expose yourself to other problem-solving methods and points of view, the better you can assess decisions from a wider lens and consider all available options.

Try different problem-solving methods like brainstorming or team-building activities that encourage thinking outside the box. Mind mapping is a method that helps you and your team organize ideas by topics and subtopics. Write the main idea in the center of a piece of paper or a whiteboard, then add related ideas around it. As your session progresses, group related concepts together to help refine broad concepts into specific ideas.

Stretch your creative muscles

Creativity can improve how you make strategic decisions by generating multiple ideas and better alternatives, but it doesn’t come naturally to everyone. Try following the five stages of the creative process to fire up your imagination. This step-by-step approach encourages you to research, plan, and reflect to help you reach the aha moment of a fresh idea.

Once you have your new solution, put your idea into motion by soliciting feedback from colleagues and confirming that your creative decision is in line with your broader objectives.

High-quality, up-to-date website content is important for all businesses. It’s particularly critical in the ecommerce space, where it functions as a storefront, greeter, sales team, and customer service desk. Strong site content can also support your digital marketing strategy by improving your performance in search results and encouraging your target audience to convert.

Ecommerce businesses use something known as a content audit to organize and manage existing content and optimize their content strategy. Here’s what content audits are, why they matter, and how to run a comprehensive content audit for your ecommerce store.

What is a content audit?

A content audit is the process of gathering and analyzing your business’s content to evaluate its performance and gauge alignment with your business goals. Successful audits provide a complete picture of all the content on your website. They’re a key part of any search engine optimization (SEO) strategy and can help you ensure brand consistency across content assets. Content audits help you identify content to retain, remove, improve, and repurpose so you can improve your site’s overall performance—and usefulness.

Why is a content audit important to ecommerce?

Content audits provide insights into the effectiveness of your content strategy and improve your understanding of your target audiences. SEO content audits, which focus on website content, aim to improve your site’s search engine visibility and increase your volume of relevant web traffic. SEO content audits can help you do the following:

• Evaluate content quality. Content audits identify high- and low-performing content, enabling data-driven decisions about your content marketing efforts.

• Identify opportunities to improve page performance. They also help you find and fix broken links and uncover any technical issues relevant to search engine performance.

• Optimize existing content. Content audits address on-page SEO, evaluating a page’s structure and keyword use to identify opportunities for improvement.

• Understand audience needs. An audit can reveal how your audiences interact with different subjects and content types, helping you focus your efforts on the content that drives engagement and conversions.

How often should businesses run content audits?

Best practices include performing content audits on a set schedule, such as quarterly. Annual site audits are typically considered the bare minimum. You might also consider a content audit in any of the following situations:

• Your content marketing efforts aren’t yielding results.

• You’re significantly changing your content marketing or brand strategy.

• You feel your site content is disorganized, or you’re unsure where new content belongs in your existing structure.

• You’re updating your content management system (CMS) or redesigning your site.

How to perform a content audit

1. Set goals and define the scope
2. Create a content inventory
3. Add performance metrics
4. Analyze content
5. Create an action plan
6. Implement changes and evaluate results

Comprehensive audits require time and resources, but they’re a critical element of any content strategy. Here’s how to set audit criteria, collect data, analyze findings, and use the results to meet your business goals:

1. Set goals and define the scope

An effective content audit process starts with defined objectives. Identify the end goal of your content audit process—or the results you’d like to see after you complete the audit. Examples include increased site traffic, improved conversion rates, or lower bounce rates.

Use the SMART goal framework (specific, measurable, attainable, relevant, time-bound) to structure your goals. If one of your goals is boosting brand engagement, for example, your SMART goal might be to increase average session length by 20% by the end of the fiscal year.

Your larger content audit goal can also help you define the scope of your project. A comprehensive content audit can address every page and asset on your site. A more focused content audit might zero in on a specific content format or asset type, such as blog posts, product descriptions, landing pages, or videos. SEO content audits typically address an entire site and analyze content at the page level, meaning that they evaluate all the content on a given page through SEO metrics like search rankings.

2. Create a content inventory

A content inventory is an organized list (typically a spreadsheet) of every piece of content on your website. Content audit spreadsheets include the following details:

• Content title (or H1)

• URL

• Focus keyword

• Topic, pillar, or content or product category

• Meta title

• Meta description

• Content type (e.g. blog post, product description, case study)

• Content format (e.g. long-form or short-form text, video, infographic, etc.)

• Date last modified

• Call to action (CTA)

Use free content audit templates and digital tools like Screaming Frog or Google Analytics to jumpstart the process. These tools inventory your entire website, eliminating the need to manually pull web page URLs and ensuring that you don’t miss any hidden or unlinked content. Some tools can also pull other page details. Screaming Frog, for example, fills in URLs, page titles, meta descriptions, header tags, and focus keywords.

3. Add performance metrics

Use your audit goals to identify the performance metrics you need. A business that wants to increase brand awareness might use Google Analytics to measure traffic volumes and search rankings for each page, for example. SEO software tools like Semrush and Moz can also provide advanced metrics like keyword optimization and domain authority scores.

Add a spreadsheet column for each performance metric relevant to your goal. Here’s a list of common metrics:

• Organic traffic volume

• Keyword rankings

• Keyword optimization score

• Domain authority score

• Average time on page

• Number of backlinks

• Bounce rate

If you’re performing a qualitative brand audit, add categories like accuracy, relevance, and brand consistency. That said, resist trying to include too many performance metrics at once, as too much data can disguise relevant trends and distract you from your goal. If your primary goal is to boost engagement, revisit your brand audit goal later and add categories relevant to a different objective. Again, it’s all about establishing a scope that you can accomplish in a reasonable amount of time.

4. Analyze content

Next, analyze your content. The exact steps you take will depend on the goal of your content audit, but here are a few common actions:

• Identify high- and low-performing content. Sort a relevant performance metric column (like organic traffic volumes or keyword ranking) numerically, and look for trends among high- and low-performing pages, considering categories like topic, word count, page type, and format.

• Identify content gaps. Sort your content audit spreadsheet by topic and evaluate content distribution across areas. Does it align with your content strategy? Do you see any meaningful performance trends? Then, cross-reference your distribution with the latest relevant search volumes to see if your content distribution aligns with audience needs.

• Review on-page SEO. If you’re using advanced SEO software, use your keyword optimization score to validate on-page SEO performance. If you aren’t, check the page content for best practices like effective primary keyword use, appropriate title, header, meta tags, and an optimized URL slug, and add a column for your findings. To keep your spreadsheet manageable, use a numerical score or a simple yes/no binary to indicate on-page optimization.

• Check for technical SEO issues. Broken internal links, missing SSL certificates, slow page speeds, and duplicate content can also hurt your SEO performance. Review each page for technical SEO issues and create a column that notes the number of technical SEO issues on each page.

5. Create an action plan

Create an action column in your audit spreadsheet with four options: retain, remove, improve, and repurpose. Here’s what each one means and when to use it:

• Remove. If a page isn’t performing well, is outdated or inaccurate, or doesn’t align with your content strategy, you might decide that your site is better off without it.

• Improve. Sometimes underperforming content is high-quality and accurate, and inaccurate or outdated content can perform surprisingly well. In these cases, you might decide to retain the page and improve existing content or address relevant technical issues.

• Retain. If a page is meeting your goals and doesn’t have any obvious technical or SEO issues, great. Leave the page as-is.

• Repurpose. Sometimes, the problem with a page isn’t the content—it’s how or where it’s used. Consider two underperforming blog posts with similar focus keywords: Could combining or restructuring the posts improve SEO performance by boosting keyword rankings or better aligning with search intent? Use this category for content that fits your content strategy and provides value to readers but has performance issues not answerable by technical fixes.

Use your content audit spreadsheet as a to-do list and track your progress in it, but keep in mind that any content gaps you identified won’t show up on your list of existing pages. Add new subjects in the topic column and fill in planned page titles as you build out your content strategy.

6. Implement changes and evaluate results

Implement your planned changes, updating your spreadsheet to keep track of your progress. When you’re ready to measure your results, you’ll re-run your performance metrics and look for changes, but remember to give it time. It will typically take three to four months for the results of an SEO content audit to appear in your site performance metrics.

In the traditional startup playbook, entrepreneurs typically develop a product, test it with customers, generate some sales, and then approach investors with data in hand. But Evan Quinn, cofounder and CEO of Hiyo, flipped this script.

While getting his MBA at UCLA Anderson in 2019, a personal crisis involving family members hospitalized with alcohol-related incidents led Evan and his cofounder George Youmans to identify a gap in the market. The white space they found? Quality non-alcoholic beverage options that could substitute for alcohol in social settings. This idea offered the promise of fun without the negative effects of alcohol.

Even before they perfected a product, Evan, George, and a third cofounder, Cygne Cooper, secured $1 million in funding based on the idea.

With this million-dollar investment, Hiyo was able to move quickly in the emerging “sober curious” movement and came to dominate the space.

How to raise money without a single product

See how Evan secured a $1 million investment before having a single product.

1. Leverage and take advantage of market timing

Evan went after an early investment to scale his brand before he had a single product. “The traditional route is to bootstrap it, you know, maybe you’re whipping something up in your kitchen and you’re fulfilling orders out of your garage. That kind of story.” But for Hiyo, speed was essential. “[We wanted to] go big out the gate, because there is a speed component to trying to get ahead of the adoption curve and getting yourself ingratiated in the category and in the space at the right time.”

Raising money before you have a product offers several advantages. Founders can capitalize on emerging trends before they become crowded with competitors, and they can do this without depleting their personal resources. The right funding at the right time, lets you focus on product excellence rather than marketing and immediate sales.

At Hiyo, this meant having the resources to formulate a functional beverage with adaptogens and nootropics that could create the relaxing “float” feeling the team wanted their product to deliver.

2. Build credibility, creatively

Without sales figures to prove market demand, Evan and his cofounders needed alternative ways to communicate credibility. “As part of my master’s thesis, I had four of the MBAs working alongside me on my [beverage] concept. And I also had access to 300, 400 students that were ready and able to do primary research and consumer data,” Evan says. The academic environment provided Evan with free market research, expert feedback from professors and mentors, a structured environment to test ideas without financial pressure, a network of potential investors, and most importantly, credibility.

With Hiyo as his thesis, Evan and his cofounders decided to enter UCLA’s Knapp Venture Competition with their concept. Maybe not surprisingly, they won the competition and received a $40,000 grant. This grant created momentum, provided the initial capital to create a minimum viable product that provided third-party validation of the concept, and connected them with judges who later became investors.

Even without a final formulation locked, Evan recognized the need for something tangible to share. “[Investors] need to test it, right? If they’re older, they’re gonna have their kids test it and make sure their kids like it and give the approval.”

Their first production run, funded by the Knapp Venture Competition grant, gave investors something concrete to evaluate—even though this still wasn’t the product’s final form.

3. Pitch vision and market understanding, not just product

Without any sales data, Evan focused on three key elements in his investor presentations. First, he didn’t rely on his own assumptions about market potential. He leveraged industry research: “IWSR (International Wine and Spirits Record) was starting to kind of cover the sober curiosity movement, and so there’s a lot of things I can find online.” Showing investors that respected industry analysts were tracking this emerging category helped validate the opportunity.

Second, he emphasized that investor confidence in the founding team was crucial. “We were very confident in ourselves as entrepreneurs,” he explains, noting this confidence was a selling point in early fundraising. For first-time entrepreneurs without proven track records, this confidence can come from relevant industry experience, educational credentials, or a real commitment to solving a problem.

Third, rather than positioning Hiyo as merely non-alcoholic, Evan articulated a distinct identity—what the product was, not just what it wasn’t. “We talk about what we are. We celebrate people that are drinking less. We branded the feeling—we call it ‘the float,’” Evan says. This positive framing helped investors envision how the product would connect with consumers emotionally, beyond the functional benefits.

4. Embrace feedback and be willing to pivot

Hiyo’s fundraising journey wasn’t all smooth sailing. After securing about half of its $1 million goal, Evan noticed a pattern in investor feedback: “We love you. We love the concept. We love how you know the market. The product’s just OK.”

Many founders might have persisted, hoping to convince skeptical investors of their product’s quality. Instead, the founding team made a bold decision. “We took a step back and we’re like, ‘Wow, we’re not gonna be here to sell our product all the time. The product needs to sell itself,’” Evan says. “So we paused, we went and reformulated the product into what Hiyo is today.”

When they returned to the investors who had previously declined, Evan reports they “batted a thousand”—everyone said yes. Not only were they impressed with the improved product, but investors appreciated the team’s receptiveness to feedback and willingness to act on it. One of the judges from the competition they had won, who initially declined to invest because his family didn’t like the product, became one of Hiyo’s largest single investors after the reformulation.

5. Have patience

“[Fundraising] will take a lot longer than you think,” Evan says. “I’ve never penciled in, in my financial model, like an accurate assessment of how long it actually takes. It’s probably usually double.” Building this extended timeline into your planning is essential to avoid running out of runway before securing investment.

While some call it creating FOMO (fear of missing out), Evan describes the process more accurately as instilling confidence. “You need to aspire confidence in your investors, especially the early stage ones … make them gain confidence in you that you’re the right entrepreneur and you’re the right concept,” Evan says. Demonstrate an understanding of the market, a passion for solving the problem, and your ability to execute and adapt.

“The people you think are gonna invest, usually actually don’t. And the people that you don’t think are gonna invest, are actually the ones that do,” Evan says. This unpredictability means casting a wide net and not becoming discouraged by early rejections. Successful fundraising often snowballs through networks, “it’s really leaning on those that do say yes, [and] tree branching off of them,” Evan says.

6. Embrace a flexible mindset

Taking a balanced perspective allows entrepreneurs to maintain passion while remaining open to necessary changes. “I think it’s really important when you’re going through fundraising to have both a 30,000-foot view and a three-foot view where you’re so close to your concept,” Evan says.

Perhaps most importantly, Evan emphasizes the need for unwavering self-belief. “You need to have an insane amount of self-belief,” he says. “If you don’t believe that you can do something and your company can get as big as you, in your mind, make it out to be, it won’t get there, cause no one else believes it.” This conviction must be balanced with openness to feedback—confidence in your vision while remaining flexible about execution.

A pre-product fundraising approach can work across sectors, but it isn’t necessarily right for every business. When market timing is critical, development costs are substantial, or you have unique credibility through your background, raising money before you have a viable product is a fitting strategy.

By focusing on these elements rather than completed products or sales data, entrepreneurs can secure the resources needed to develop truly exceptional solutions rather than rushing minimum viable products to market with limited resources.

You have the opportunity to gather the resources and the runway needed to create something truly exceptional. As Evan puts it, “Entrepreneurship is amazing. It’s this growth mindset where you learn and you’re a problem solver. Every day you’re working on something that you love, [in order] to help people.”

Tune in to Evan’s full Shopify Masters YouTube video to understand the process behind bringing Hiyo’s first product to market, and expanding into retail doors nationwide!

Unless you’ve established your own product manufacturing operations, you probably need reliable third-party suppliers. One of the best ways to find suppliers is through online marketplaces—platforms designed to help buyers like retailers and ecommerce merchants connect with manufacturers, wholesalers, and distributors.

Two of the most popular marketplaces for sourcing products online are Alibaba and AliExpress, both owned by the Alibaba Group—sometimes items may even appear on both platforms. Whether you need to source bulk inventory or find dropshipping suppliers, read on to learn how AliExpress and Alibaba work, how they compare, and how each online marketplace can potentially benefit your ecommerce business.

What is AliExpress?

AliExpress is a business-to-consumer (B2C) ecommerce retail platform owned by the Alibaba Group that features millions of products from thousands of different suppliers, primarily based in China. Popular categories on AliExpress include beauty products, toys, shoes, pet supplies, and consumer electronics.

If you’re an ecommerce business, you can become a seller on AliExpress, or source products from thousands of large-scale manufacturers on the platform. You can also use AliExpress to find suppliers for your dropshipping business, using AliExpress’s dropshipping portal to find, research, and buy products. When customers purchase products in your store, those orders go directly to the suppliers, who then fulfill orders by picking, packing, and shipping the items.

Because these orders often involve international shipments, delivery times for AliExpress can range from one to 50 days, depending on the shipping method and destination. Buyers don’t need to pay to use the platform; sellers pay a commission of between 5% and 8%, depending on the product category.

What is Alibaba?

Alibaba is a business-to-business (B2B) wholesale marketplace that connects companies that manufacture goods with companies that need inventory. Alibaba is run by the Alibaba Group, a public company that owns other marketplaces as well, including AliExpress, Tmall (business-to-consumer), and Taobao (consumer-to-consumer).

Alibaba features many of the same product categories as AliExpress (like consumer electronics and beauty products), but it also includes raw materials like metals, plastics, and textiles sourced from suppliers primarily based in China.

Outside of the bulk inventory side of the marketplace, Alibaba offers a dedicated dropshipping portal that features products from suppliers who provide order fulfillment services for merchants. You can research suppliers and import products to your online store through the dropshipping portal. When a customer places an order, Alibaba automatically sends that information to the supplier to fulfill the order.

Shipping can typically take anywhere from five to 40 days, depending on the destination and shipping method. The Alibaba marketplace is free for buyers, and suppliers can use the platform starting at $166 per month with no commissions imposed on sales.

AliExpress vs. Alibaba: How do they compare?

• Type of marketplace
• Minimum order quantity
• Price negotiation
• Buyer protection
• Shipping

Both Alibaba and AliExpress can act as platforms for sourcing products for an ecommerce merchant’s online business, but they serve different functions and have unique features.

Type of marketplace

Whereas Alibaba focuses on bulk orders of wholesale inventory, AliExpress is geared more to consumers with the option for small purchases of even one item like a necklace, wallet, or phone case. Conversely, Alibaba has a more robust B2B offering, as it can also supply raw materials and industrial machinery to retailers and merchants who want to produce their own products.

For example, a clothing company could purchase raw materials like textiles as well as industrial machinery like sewing machines on Alibaba. By contrast, an ecommerce merchant could use AliExpress to incorporate low-cost apparel into its store via dropshipping.

Minimum order quantity

Many of Alibaba’s offerings include a minimum order quantity (MOQ), a requirement for the smallest order amount that a buyer can make of a particular wholesale item. For example, a supplier selling t-shirts could set an MOQ of 200, meaning retailers would need to place an order for at least that many t-shirts to do business with that supplier. AliExpress, on the other hand, has no minimum order quantity requirements.

Price negotiation

Some bulk inventory suppliers on Alibaba set a fixed wholesale price, whereas others allow negotiation. Alibaba lets buyers on the platform contact suppliers directly to negotiate a price and complete a payment.

On the other hand, AliExpress prices are fixed, aside from promotions or discount codes.

Buyer protection

Alibaba offers Trade Assurance, an order protection program that includes payments being withheld from suppliers until confirmed delivery, an on-time delivery guarantee, and a money-back policy where customers can claim a refund for missed deliveries, incorrect orders, or damaged items. AliExpress does not offer Trade Assurance, although it does have some buyer protection that lets customers submit an application for a refund within 15 days of delivery.

Shipping

Because Alibaba typically involves suppliers transporting bulk inventory to a warehouse, shipments usually require sea or air freight, which can take several days to weeks to arrive. AliExpress offers a variety of shipping options, including standard shipping with average delivery times of 15 to 45 days and premium shipping with deliveries completed in a few days to a week. AliExpress works with a variety of shipping companies (like FedEx and DHL) to deliver products directly to customers.

Why use AliExpress?

AliExpress is a popular marketplace that dropshippers use to source products for their businesses. Here are a few of the reasons so many use AliExpress:

• Ease of use. AliExpress is designed to quickly integrate with ecommerce stores and automatically process orders placed through your online store.

• International sales. AliExpress is available in 18 languages and 220 countries and regions around the world, making it a dropshipping option for expanding into international markets.

• Built-in audience. Since AliExpress is a business-to-customer marketplace, the platform has existing web traffic, meaning AliExpress can act as both a supplier and a sales channel for your dropshipping company.

• Pricing and promotion tools. AliExpress lets sellers set prices, offer discount codes, and run flash sales.

Why use Alibaba?

Alibaba is a platform that best serves merchants that need to source inventory for their retail or online stores, rather than dropshipping merchants. Here are a few of the main benefits for merchants choosing this platform:

• Competitive pricing. Alibaba offers bulk discounts for a wholesale business, direct manufacturer, or merchant needing to stock inventory, as well as competitive prices for some dropshipping products.

• Wide selection of suppliers. Alibaba works with more than 2.8 million suppliers in about 5,900 product categories.

• Protection. Alibaba’s Trade Assurance program applies to eligible products, and can provide buyers with the certainty that their orders will arrive on time and in good condition, or else they can claim a refund.

• Available for small businesses. Alibaba includes suppliers offering fairly low minimum order quantities for items (sometimes around 50 or 100) compared to other wholesale marketplaces, allowing small businesses to purchase more limited orders of wholesale inventory and then scale up orders as needed.

If you sell products you don’t manufacture yourself, finding reliable suppliers is one of the most crucial aspects of your business. While many companies turn to Chinese wholesale juggernaut Alibaba for inexpensive goods available in bulk, there are downsides to consider. Goods shipped from China can entail long delivery times, high shipping costs, and potential tariffs for the importer.

Product quality can also be an issue, as disreputable or fraudulent suppliers can make their way onto the platform. Finally, there may simply be more competitive prices elsewhere—if you know where to look. Read on to learn about popular alternatives to Alibaba.

What is Alibaba?

Alibaba is a business-to-business (B2B) online marketplace designed for merchants and retailers to purchase products in bulk, mostly from Chinese manufacturers and wholesalers. Ecommerce store owners can also use Alibaba to source and connect with suppliers who offer a dropshipping relationship.

The platform lets buyers research potential suppliers, negotiate prices, and collaborate with manufacturers to produce private-label products. By purchasing items in large quantities from Alibaba, merchants can potentially lower their product-sourcing costs. Buyers can also identify verified suppliers with a good reputation based on their past transactions on the platform.

8 Alibaba alternatives

• Shopify Collective
• IndiaMART
• Thomasnet
• tradeKorea
• Wholesale Central
• Trendsi
• DHgate
• Amazon Business

Here are a few of the largest and most reliable sites to consider if you’re looking for alternatives:

Shopify Collective

Shopify Collective connects US-based Shopify merchants with retailers who want to sell their products using the dropshipping model. All transactions take place within the Shopify ecosystem, so it’s easy to connect with reliable suppliers, add high-quality products to your online store, and make sales using Shopify Payments, a secure gateway that processes multiple payment methods like credit cards and digital wallets.

Shopify Collective accepts only suppliers who have an active Shopify store and accept Shopify Payments, which involves meeting Shopify Payments’ terms of service. Since only legitimate Shopify merchants can become suppliers on Shopify Collective, the platform has a higher standard for suppliers than Alibaba.

Pricing: Shopify Collective is a free tool for eligible Shopify merchants who submit an application to join the marketplace on the Shopify admin dashboard. You can create a Shopify account for $1 per month for the first three months.

IndiaMART

IndiaMART is a B2B marketplace that sources products primarily from Indian suppliers. Some suppliers also offer dropshipping services. Dropshippers can search through a variety of product categories on the platform, from semi-finished materials like textiles to consumer goods like clothing and cookware.

Buyers on IndiaMART can use its Post Your Requirement feature with a detailed request (including order quantities and location preferences) and get a list of supplier recommendations from the platform.

IndiaMART’s suppliers are primarily in India, while Alibaba’s are mostly in China, which can impact trade costs and shipping time frames. IndiaMART is especially useful for buyers based in India, while Alibaba has more experience with international export orders.

Pricing: Buyers and sellers can sign up and use IndiaMART for free; sellers can sign up for premium subscriptions to boost lead generation, visibility, verification, and targeting.

Thomasnet

Thomasnet is an online marketplace that connects buyers and sellers of industrial equipment and supplies throughout the US and Canada. Merchants that manufacture their products can use Thomasnet to find production equipment and raw materials like plastic or metal. Thomasnet also includes a catalog of suppliers selling finished goods like office supplies, framed art, and boom microphones.

Although Thomasnet does not include a dropshipping feature like Alibaba, it can help merchants discover new suppliers to contact for a dropshipping arrangement. Thomasnet generally implements higher quality standards for suppliers than Alibaba and offers buyers a Supplier Discover tool that includes advanced search options like location filters, side-by-side supplier comparisons, and Supplier Profile Summary Reports that merchants can use to evaluate different suppliers and choose the right fit.

Thomasnet vets the basic business information of suppliers applying for Thomas Registered Suppliers Badges, and goes a step further for Thomas Verified suppliers by validating their entire product catalog, which helps items rank higher on search results. Sellers with Supplier Badges place higher on the platform’s search results and collections.

Pricing: Thomasnet is a free platform for buyers, but there is a 4.5% marketplace fee for suppliers without a Supplier Badge, which is accessible through a premium paid subscription. There are two Supplier Badge options: a Thomas Registered Supplier Badge for $100 per month and a Thomas Verified Supplier Badge for $250 per month.

tradeKorea

Sourcing items primarily from South Korean suppliers, tradeKorea is a wholesale marketplace with more than 100,000 manufacturers selling bulk inventory and raw materials. Some of the most popular product categories on the platform include consumer electronics, beauty and wellness products, kitchen goods, and even fertilizer material like groundnut meal and palm bunch ash.

The platform offers a few unique features, including a B2B matchmaking process where buyers can submit a form with procurement requirements and receive supplier recommendations based on that information. By leaning on the expertise of manufacturers in South Korea, tradeKorea generally offers higher-quality and more expensive products than Alibaba, especially in certain industries like technology and textiles.

Pricing: tradeKorea is a free online marketplace.

Wholesale Central

Wholesale Central is a US-based B2B directory that lists global suppliers selling products in bulk, including health, beauty, and wellness products, jewelry, electronics, and apparel. Wholesale Central includes a wide range of primarily North American dropshipping suppliers on its platform, helping dropshipping merchants find and interact with suppliers directly.

Although Wholesale Central doesn’t have an in-site messaging feature like Alibaba, it offers a more user-friendly search engine for finding niche items like organic wellness products or specialized supplements from a curated list of US-based dropshipping suppliers, including a specific directory for trending products. Wholesale Central uses a paywall and verifies suppliers on the platform, which helps buyers avoid the types of supplier scams on more open marketplaces like Alibaba. It also provides a calendar of upcoming supplier trade shows in North America where merchants can meet potential suppliers in person.

Pricing: Wholesale Central is free for buyers; suppliers pay a fee starting at $299 for a six-month listing. The platform doesn’t handle transactions or collect any related fees.

Trendsi

Founded in 2020 and based in California, Trendsi is a marketplace focused on connecting dropshippers and retailers with clothing suppliers. Ecommerce merchants can download and list dropshipping products directly through Trendsi’s free app. Trendsi works with reliable suppliers based in the US as well as trusted overseas vendors to source apparel and fashion accessories.

While Alibaba includes a huge selection of product categories, Trendsi focuses on high-quality apparel and fashion accessories sourced from North American suppliers. Buyers on Trendsi have the option to dropship individual items as well as purchase inventory in bulk for discounts.

Pricing: The Trendsi app is free for buyers but takes a percentage of every sale made on the platform and charges for shipping.

DHgate

DHgate is a wholesale marketplace that primarily sources products from Chinese manufacturers. Like Alibaba, DHgate uses customer reviews and a rating system to vet supplier quality, but it’s ultimately up to merchants to choose legitimate suppliers on the platform and avoid scammers. DHgate focuses on bulk orders and wholesale, but its suppliers generally offer a lower minimum order quantity (MOQ) than those on Alibaba, meaning buyers can purchase fewer items and still receive bulk discounts.

For example, suppliers on Alibaba often list MOQ requirements of around 500 or even 1,000 units, whereas DHgate suppliers often list an MOQ of around 100 or 50 (some even have no MOQ at all). DHgate’s product search engine includes a minimum order filter that you can use to find suppliers with MOQs that fit your company’s inventory needs. This means DHgate can sometimes be a better product sourcing option for small companies that have limited inventory requirements or want to test out a new product line before purchasing bulk inventory.

Pricing: DHgate is free to use, but the company takes a percentage of the sale amount on transactions made through the platform.

Amazon Business

Amazon Business is a B2B online marketplace designed for small and medium-sized businesses to purchase bulk inventory online from hundreds of thousands of suppliers across the globe. You can find a wide range of products on the platform, from office supplies to industrial equipment, consumer electronics, and beauty products. Merchants can purchase bulk inventory from Amazon Business or choose suppliers on the platform who provide dropshipping services and handle order fulfillment. According to a 2024 survey, the majority of products sold on Amazon are manufactured in China, with the United States being the second largest producer, and India coming in third.

Amazon Business’s selection of wholesale suppliers and products is more international compared to Alibaba, which almost exclusively features products from Chinese suppliers. Additionally, shipping is generally faster on Amazon Business than Alibaba, especially for Amazon Business Prime members who can choose from two-day, one-day, or even same-day shipping for certain products. By contrast, Alibaba’s international shipments using air or sea freight can take anywhere from five to 40 days.

Pricing: An Amazon Business account is free to use, but Amazon does charge referral fees using two methods: either a percentage of the total price or a minimum amount of 30¢. Amazon chooses whichever method is higher. Referral fee percentages range from 3% to 45%, depending on the product category.

An Amazon Business Prime Essentials account starts at $179 a year. Benefits include faster shipping, free shipping for select items, discounts on some bulk purchases, and better analytics tools, although referral fees still apply to Amazon Business Prime sellers.

The goal of robotics technology within Amazon’s operations is simple: pair employees with the right technology to make their workday safer, easier, and more productive, while delivering packages to customers faster than ever.

The scaling of these systems has reached a new crescendo with the recent launch of Amazon’s next-generation, state-of-the-art fulfillment center in Shreveport, Louisiana, equipped with the latest innovations in robotics to support employees who package and deliver customer orders. This site uses eight different robotics systems that work in harmony to support package fulfillment and delivery.

Additionally, Amazon Web Services cloud computing infrastructure enables these robots to operate efficiently by storing and processing rich data generated by sensors, cameras, and machine processes. Amazon plans to scale these robotics systems to existing facilities across the network.

“Years of innovation have allowed us to build, test, and scale this unique, highly integrated suite of robotics systems that work to support employees fulfilling customer orders,” said Scott Dresser, vice president of Amazon Robotics. “Thanks to advancements in AI, these technologies integrate seamlessly, and will help us drive an estimated 25% productivity improvement at next-generation fulfillment facilities. This allows us to deliver more efficiently for customers, while supporting the employees who make it happen.”

Follow along the journey of the package through the eyes of the nine robots that are supporting the next generation of package fulfillment at Amazon.

1. Sequoia

Before orders are fulfilled, Amazon’s sophisticated inventory planning system ensures the right products are in fulfillment centers near customers. Then, Amazon’s robotic system, Sequoia, uses AI, robotics, and computer vision systems to consolidate inventory and free up storage at the site to facilitate faster order transactions closer to our customers.

Sequoia enables Amazon to identify and store inventory up to 75% faster at our fulfillment centers. It works by having mobile robots transport inventory directly to a containerized storage system or to an employee picking out items for a customer order.

Inventory is transported directly to employees at a workstation ergonomically situated for their power zone (between mid-thigh and mid-chest height), mitigating the need for employees to reach above their heads or squat down, which can lead to common workplace injuries.

2. Hercules

Next up, employees will use a variety of robotics systems to pick items for customer orders. Hercules is a drive unit that finds and brings pods of items from areas of the fulfillment center to employees who pick out items for customer orders before they are packaged.

Hercules makes key decisions about how it moves independently, but takes overall direction from centralized planning software. It then uses a forward-facing 3D camera to differentiate between people, pods, other robots, and other objects in its path to make safer decisions.

Hercules uses its camera to read a grid of encoded markers on the floor, which enables it to navigate, find its position, and locate any pod.

3. Titan

Similar to Hercules, Titan is another drive unit that brings items from across Amazon’s fulfillment centers directly to employees as they assemble customer orders. What’s special about Titan is that it can lift twice as much as Hercules, meaning it focuses on larger and/or bulkier items like small household appliances or pallets of food.

Titan picks up pods of totes and navigates through a restricted robotics floor using computer vision.

4. Vulcan

Vulcan is Amazon’s first robot with a sense of touch representing a fundamental leap forward in robotics. Working alongside employees, the robot can pick and stop items at the highest and lowest level of inventory pods, creating a safer and easier job for our workers, while moving orders more efficiently.

Built on key advances in robotics, engineering, and physical AI, Vulcan can easily manipulate objects within inventory pods to make room for whatever it’s stowing, because it knows when it makes contact and how much force it’s applying and can stop short of doing any damage.

Vulcan uses an “end of arm tooling” (what you might call a hand) that resembles a ruler stuck onto a hair straightener to grab items, but can also understand how much force to apply when picking it up.

For picking items from those bins, Vulcan uses an arm that carries a camera and a suction cup. The camera looks at the compartment and picks out the item to be grabbed, along with the best spot to hold it by.

While the suction cup grabs it, the camera watches to make sure it took the right item. It also has the smarts to identify when it can’t move a specific item, and can ask a human partner to tag in, helping us leveraging the best of what our technology and employees can achieve by working together.

Vulcan’s focus on the highest and lowest pods allows employees to work more efficiently in their ergonomic power zone instead of climbing up a ladder or crouching down. It can pick and stow approximately three quarters of all various types of items we store at our fulfillment centers and at speeds comparable to that our front-line employees. Vulcan works alongside our employees, and the combination is better than either on their own.

5. Sparrow

Sparrow is another robotic system that supports employees who aggregate items for customer orders. This robotic arm picks up and moves individual items from containers into specific totes to send off to employees before they’re packaged.

Sparrow uses computer vision and AI to identify the correct item and add it to the tote on its delivery journey.

6. Packaging Automation

Once all the items for a customer order are selected, Amazon uses a variety of packaging innovation systems to pack up customer orders with sustainability in mind.

This machine originally created plastic bags, but has been retrofitted to create made-to-fit paper bags. It uses sensors to measure an order’s dimensions and then creates a correctly sized, protective bag using a more durable, weather-resistant paper and heat-sealing technology.

This technology allows us to use curbside recyclable materials so more customers can recycle at home. We have retrofitted more than 120 of these machines across the U.S. in more than 20 fulfillment centers, helping us avoid more than 130 million plastic bags this year.

7. Robin

Once a package is boxed up, it starts to make its way to the outbound dock for the next leg of its journey to a customer’s doorstep. Robin was the first robotic arm ever deployed by Amazon Robotics, made to sort packages before they’re brought to the outbound dock to be placed on a truck.

Robin grabs packages from conveyor belts and puts them onto robotic drive units to be moved to the next part of the facility. It also transfers damaged packages to ensure optimal quality control.

8. Cardinal

Similar to Robin, Cardinal is a robotic arm that uses advanced AI and computer vision to quickly select one package out of a pile of packages delivered via a chute, lift it with air suction, read the label, and precisely place it into the appropriate cart before it’s brought to a truck in the loading dock.

Cardinal can handle packages up to 50 pounds, which helps reduce the risk of injury for employees who would normally have to pick up larger packages.

9. Proteus

Proteus is Amazon’s first fully autonomous mobile robot, meaning it can navigate freely throughout a site using sensors to detect and avoid objects in front of it. Other mobile robots, such as Titan and Hercules, are confined to areas where only authorized robotic specialists can enter, and read barcodes that are stickered to the floor as navigation coordinates.

Proteus works in conjunction with Cardinal—a robotic arm that loads packages into carts—to move those carts from the outbound dock area of the fulfillment center to the loading dock, where packages are loaded onto trucks.

To get a startup off the ground, entrepreneurs need boundless energy, a sense of mission, a great idea—and money.

The term “startup capital” may evoke images of the TV program Shark Tank or venture capitalists in sleek Silicon Valley office campuses. In reality, entrepreneurs and startup founders have many different paths to secure funding for startup costs. Here’s what startup capital is, how it works, and what to consider before using it.

What is startup capital?

Startup capital refers to the financial backing a startup business needs to operate and grow in its early stages. It includes both the initial investment of seed capital and any additional rounds or series of fundraising. You can use startup capital for operating expenses like developing products, hiring staff, buying equipment, or just paying the bills.

Entrepreneurs can explore many different ways to fund their startup companies. Many consider business loans from banks or borrowing against a business line of credit, which gives you the flexibility to borrow only when you need funds. Some turn to community support via crowdfunding or friends and family. Others tap into personal sources, such as savings and retirement accounts or borrow against their homes.

Startup capital vs. seed capital

“Startup capital” and “seed capital” are often used interchangeably, but they have important differences. Seed capital is the very first startup funding a company receives to begin operations. Seed funding is often used for the initial costs of business operations like market research, product prototype development, and early marketing efforts. Startup capital, on the other hand, broadly encompasses all financial resources a growing business needs, including seed stage backing and later rounds of fundraising.

Both start-up and seed capital can come from various sources, such as angel investors, venture capitalists, investment banks, major corporations, private equity firms, or your own funds.

10 types of startup capital

1. Bank/credit union loan
2. SBA-backed loan
3. Business credit card
4. Crowdfunding
5. Grants
6. Personal savings
7. Friends and family
8. Venture capitalists and angel investors
9. Home equity loan
10. Retirement savings

A business owner can consider multiple ways to fund a new business, and you may use several simultaneously or at different stages of your business ventures. Each funding option has advantages and disadvantages, with some being more accessible to brand-new businesses than others:

1. Bank/credit union loan

Many financial institutions, such as banks, credit unions, and online lenders, offer small business loans to help start or expand your business. These funds may be a lump sum or a revolving line of credit you can use for any business expense. However, securing traditional loans can be challenging if you’ve been in business for less than a year. You will likely need to provide a personal guarantee, meaning you are personally responsible if your business can’t make loan payments.

2. SBA-backed loan

SBA loans are also issued by traditional banks, credit unions, and online lenders—but with a US Small Business Administration guarantee, which may help new businesses qualify more easily. These loans range from $50,000 microloans to as much as $5 million for larger projects. They often come with benefits like low down payments, competitive interest rates, and sometimes minimal collateral requirements—or are assets the lender can take if you don’t repay the loan. But the approval process is often lengthy and complex, and like traditional bank loans, you will need to provide a personal guarantee.

3. Business credit card

A business credit card can be a simple way to fund startup costs, especially if you have excellent personal credit. They work similarly to personal credit cards and typically provide features to help you track purchases, manage employee cards, and download financial data. But just like that personal credit card, it’s easy to run up high-interest debt if you’re not careful. You’ll need to generate revenue sufficient to pay the monthly bill.

4. Crowdfunding

Crowdfunding involves raising capital from many individual donors via websites like Kickstarter and Indiegogo. You might offer donors a reward (like a product) or provide a stake in the company through equity crowdfunding. This approach not only raises funds but also helps validate your business concept and build an early customer base.

5. Grants

Local, state, and federal governments may offer various small business grants that don’t require repayment. Many aim to fund businesses founded by underrepresented groups like minorities or women, those located in economically depressed areas, or specific industries, like agriculture. Check state and local government sites, local business advocacy groups, and the federal grants database at grants.gov. Note that competition for these grants is often intense, particularly for new companies with unproven business models.

6. Personal savings

Using only your personal savings is called bootstrapping, from the adage “pulling yourself up by your bootstraps.” If you have enough savings, using your own money may let you avoid taking on interest-bearing business debt. However, financial planners generally recommend you maintain at least three to six months of living expenses in an emergency fund before investing personal savings in a business venture.

7. Friends and family

If friends and relatives have the means, they might consider lending you money for your business. If you go this route, clearly define expectations on both sides and create a formal agreement that outlines terms and conditions. While this funding source can be more accessible and flexible than traditional options, mixing personal relationships with financial arrangements requires careful navigation.

8. Venture capitalists and angel investors

Angel investors are wealthy individuals who provide seed money using their own funds, while venture capitalists invest in early stage businesses on behalf of venture capital firms. Generally, these professional investors are providing startup capital in exchange for an equity stake in high-growth companies. You may attract investors and receive equity financing with a unique idea and solid business plan; however, only a very small percentage of startups receive venture capital funding, with estimates ranging from 0.05% to 1%.

9. Home equity loan

If your company can’t qualify for a standard business loan, you might consider a home equity loan or home equity line of credit (HELOC). How much funding you receive depends on your home value. Lenders usually let you borrow as much as 80% to 90% of your home’s market value—minus your outstanding mortgage balance. While these loans often have lower interest rates than a standard business loan, they put your home at risk—if you can’t make your payments, the lender can foreclose on your property.

10. Retirement savings

If other funding sources aren’t possible, another alternative is dipping into your retirement savings. Withdrawing from an individual retirement account (IRA) incurs income taxes that can range from 10% to 37%—plus a 10% penalty if you’re younger than 59 and a half years old. Some 401(k) plans let you borrow up to 50% of your account value for any purpose (maximum $50,000 within 12 months), with repayment plus interest required within five years. Carefully evaluate the impact of withdrawals as part of your comprehensive retirement planning.

Advantages and disadvantages of startup capital

No matter the source of your funding, raising startup capital has advantages and disadvantages:

Advantages

• Access to critical financial resources. Startup capital is what gets your business up and running, letting you invest in operational necessities like product development, research, market research, and staff.

• Ability to scale faster. When you have multiple, flexible funding sources, you can pounce on opportunities to expand your business.

• Reduced personal risk. If you secure funding externally, you may avoid putting personal assets—like your savings, your retirement accounts, or your home—at risk in the event of business setbacks.

Disadvantages

• Less control. Accepting money from equity crowdfunders and investors typically means providing them with shares in your company. Many investors want a say in decision-making and strategic direction, which can limit your freedom as a founder.

• Debt. If you raise funds using credit cards and loans, you typically will have to repay that money with interest—which can add significant financial pressure and limit your ability to reinvest any earnings into the business.

• Pressure to perform. When you raise money from external investors, you’re beholden to others. Investors typically expect a return on their investment, which can add pressure and stress, and if you miss a growth milestone, you may have trouble raising more capital in a future funding round.