AccrueMe asks for their initial investment back, plus a percentage of the net profits during the time a seller is using AccrueMe’s money. The profit share percentage is between 5% and 25% – equal to half the percentage of the capital AccrueMe has put into the business.
If you reinvest the profits and grow your capital in the business, then the amount AccrueMe has invested will become a smaller percentage of the total, and the profit share percentage will get lower and lower. (Or, you can just stop using AccrueMe’s money, and keep 100% of your profits.)
The seller continues to run the business and is responsible for all the usual requirements, such as collecting, filing and paying sales taxes. As a profit sharing agreement, there is no interest, fees, monthly payments, or permanent percentage of ownership taken.
Sellers have the option to pay AccrueMe back any amount they wish at the end of a month, or simply keep the capital invested in their business to continue increasing profits. AccrueMe will also contribute more funding when asked, as long as it is used to buy more inventory.
A detailed example
Say you have $100,000 invested in your Amazon business. Then AccrueMe provides another $100,000 to bring the total capital to $200,000 (50% comes from AccrueMe). AccrueMe’s share is 25% (half of 50%) of your profits, but only until you pay back the initial investment and the accrued profit share.
So, imagine that you are making a 20% ROI (you make $120 in revenue for every $100 you spend). That means if you are spending $100,000 a month, you earn $120,000 in revenue for a $20,000 profit.
AccrueMe invested $100,000, so you are now spending $200,000 a month to earn $240,000 in revenue and a $40,000 profit. You can choose to pay AccrueMe its 25% share of the profit ($10,000) and still walk away with a $30,000 monthly profit. Over the course of a year, that increase from $20,000 to $30,000 per month means you would become $120,000 richer by using AccrueMe.
But many sellers choose to keep their profits invested in the business, which has two big benefits. First, you can use the capital to grow your business further by researching new products, investing in marketing or simply buying more stock. The second benefit is that, as you increase your capital in the business, the total capital will grow larger and AccrueMe’s share of the capital and profits will get lower and lower.
Reinvesting your profits
Let’s continue the example, and see how it looks when you reinvest your profits. You take that $40,000 profit from your first month and invest it right back into your business (remember, you don’t have to make any payments to AccrueMe until you want to). You now have capital of $240,000 in the business, and with a 20% ROI you can use that to generate $48,000 in profit in the second month.
If you put that money back in again, then your third month will see capital of $288,000 and profit of $57,600, based on the same ROI. Now your own capital has grown, and the $100,000 that AccrueMe originally invested makes up around 35% of the total capital instead of 50%. As a result, AccrueMe’s profit share goes down from 25% to 17.5%. By month six, even if you start paying out AccrueMe’s share, your personal monthly profits will have gone from the $20,000 range to well over $50,000.
AccrueMe has a calculator on its website that allows you to adjust for your working capital, the capital you are requesting from AccrueMe, your ROI, turnaround time, and even the amount you want to withdraw each month for your own personal lifestyle. Here’s one of the charts it generates to help show the effect of the investment:
As you will see from the calculator, the difference can add up to millions of dollars within just a couple years.