Banking pitfalls to avoid during hypergrowth

Saul Doane is the Co-Founder of The Buy Box, an online community dedicated to accelerating Amazon businesses through ongoing curriculums, 1:1 mentorship, enablement tooling, and more. He’s also Head of Operations at Ohnut, a rapidly growing DTC sexual wellness brand

We sat down with Saul to learn from his depth of operating expertise, focusing on:

1. Why instant payouts are essential for free cash flow
2. How separate bank accounts on Highbeam can reduce taxes
3. How to find a financial partner to solve your cold start problem

"There are so many hoops to jump through that new eCom business owners don’t know about. The Buy Box alleviates that — and Highbeam offers major support."

Why Amazon merchants struggle with banking

Considering the existing commercial banking landscape, Saul points to three prominent pain points for merchants, especially on Amazon, which span both legacy banks and neobanks.

1. Free cash flow is king

None of the banks that Saul has used have ever proactively helped him understand the impacts of different credit lines or manage varying cash flow situations.

These banks and platforms are built to alert founders when they’ve run out of money, but not to aid them in understanding their estimates or trajectories in arriving at that point.

In response, Saul emphasizes the need for a bank that can:

1. Intelligently track and project deposit and purchase trends
2. Proactively offer relevant loans or lines of credit within that ecosystem
3. Help clients navigate multiple financing options and decision-making processes

2. Preparing for tax season

Saul drives home the point that any new Amazon merchant likely won’t be able to understand the full scope of tax season requirements as a business owner until their first tax cycle.

Unless a merchant uses their bank or a third party like QuickBooks for every single situation, there is little opportunity to keep an accurate, real-time pulse on your profitability.

This leaves business owners entirely caught off guard by their tax return come April.

Most solutions for automating tax savings also fail to deliver, since they only set aside predetermined monthly amounts and fail to react dynamically to your financial health.

3. The cold start problem

Through his experience with The Buy Box, Saul can attest that a large number of SMBs on Amazon are early-stage business owners, if not hobbyists with zero operating experience.

For instance, most of the Buy Box community nets a monthly $1,000​​–10,000 that goes toward vacation money or paying off medical debt and student loans. These sellers include:

• Parents with free time looking for an extra income stream
• Young adults operating during a gap year from school

Because of this, most of these merchants lack the know-how on crucial topics like:

• Incorporation status and documents
• The importance of having a CPA on deck
• Which corporate banks are founder-friendly

Many of them will wind up banking with legacy names like Chase, which do little for their smaller commercial clientele all while saddling business owners with unexpected taxes owed.

"Tons of people sell on Amazon as a hobby. Their lack of experience means they don't know what to expect from taxes or business banking. It's a huge pain point."

How to improve your brand’s financial health

Saul drives home three fundamentals of commercial financing, banking, and tax season for first-time or early-stage Amazon merchants.

1. Instant payouts are essential for free cash flow

Amazon businesses rely heavily on how quickly they can convert sales into cash in their bank accounts. Saul points out that the faster a merchant can buy new products with fresh cash in their account, the faster that brand can grow its business. In his words, condensing your company’s cash conversion cycle is vital – and instant payouts shorten that cycle further.

Critically, if your bank doesn’t provide instant payouts, your growth trajectory slows down. Thus, instant payouts become a crucial growth tool and a key lever for fast-growing merchants.

Saul adds that financial partners like Highbeam gives merchants the option to get instant payouts for free, so they don’t have to worry about paying high fees with other banking products.

Many Amazon SMBs begin as test drives or hobbies. However, if you're starting to carve out time and finances for your operation or imagine long-term returns, treat it like the business it is.

Turning your experiment into something you can either live off or flip and sell down the line will require early and intentional setup. To do this, Saul recommends first steps such as:

• Creating a registered business entity, LLCs being the cheapest in most states
• Purchasing the proper insurance to protect yourself from potential liability issues

2. Create separate bank accounts on Highbeam to reduce taxes

In Saul’s words: “You’re going to want to separate your money.”

After all, he explains, founders can only be protected by their LLC or S Corp status if there are clear divisions between personal and corporate assets.

While most new business owners are pointed toward legacy banks, Saul recommends enrolling in or switching to a neobank, particularly Highbeam, to members of The Buy Box.

He emphasizes the long-term success boost from neobank benefits like immediate, transparent credit, instant payouts, and more – all of which are crucial in helping reduce net taxes owed.

3. Find a financial partner to solve your cold start problem

Beyond saving your banking statements, Saul advises all merchants, especially at the SMB level, to maintain solid records on their sales and expense history.

As mentioned, having this info readily available provides a periodic indication of profits, as opposed to being surprised come time for your monthly or quarterly taxes.

For Amazon, third-party tools like InventoryLab, which he personally recommends, alleviate manual efforts — although he stresses keeping detailed internal records as you grow.

When looking for the right banking partner, Saul adds that Amazon merchants should work with tools like Highbeam that are intentionally designed for Amazon – specially due to the fact that Highbeam plugs directly into Amazon data to offer personalized advice and financial insights.

"You can protect yourself by creating a business entity with its own specific assets. Support systems like Buy Box or Highbeam only make that easier."

The outsized value of leveraging instant payouts

Saul underscores the value of banking software with instant payouts for one reason: cash flow.

He dives deeper into this cash flow issue, unpacking three steps that merchants go through:

1. Most members of The Buy Box start their businesses with personal money
2. Once invested, the owner's struggle becomes: How do I recuperate this?
3. Generally, it takes 60–90 days to see returns on purchased product

Very rarely will an Amazon merchant buy in bulk every few months, whereas a Shopify owner might. This means consistently high spend and sales efforts on a weekly basis.

Maintaining a practical approach to cash flow can be daunting, which leaves folks to fall into predatory lending schemes for Amazon sellers.

Thus, instant payouts — a key feature of Highbeam — becomes a lifeline for these businesses, who might otherwise wait days for their funds to hit, disrupting their deal cycles.

In Saul’s words, time directly equates to money.

"If you’re an Amazon SMB, like most Buy Box partners, you’re always churning. You absolutely need the cash flow from instant payouts to support that."

Banking pitfalls to avoid during hypergrowth

As for the merchants he serves via The Buy Box, Saul sums up the community in two buckets:

1. Zero-to-One Merchants — Maxing out at roughly $1 million in ARR
2. One-to-Ten Merchants — Generating up to roughly $10 million in ARR

He also highlights two of the most prominent mistakes he’s seen these merchant groups make, as well as his solutions.

1. Stop stunting your own growth

While he’s aware many zero-to-one businesses won’t want to hear this, Saul strongly cautions against withdrawing any of your profits prematurely unless you absolutely need them.

He’s made this mistake himself — and it can severely slow your long-term financial growth.

Just because you've finally begun turning a $5,000 profit, it doesn't mean it's time to write your paycheck. The reality is that every dollar you pay yourself is one less dollar to invest in sourcing.

In Saul’s case, it took him six months to realize that $8,000–12,000 could quickly become $12,000–30,000 as soon as they began leaving the money invested where it was.

Put simply: Use funds more effectively by investing them straight back into the business.

2. Delegate your time

In Saul's experience, most brands spend the one-to-ten phase addressing the mistakes that plagued them throughout the zero-to-one period. Once they do so, the company skyrockets.

At the same time, many teams wind up getting in their own way or dragging their feet because they didn’t expect this speed of scale – especially during inflection points. Saul affirms the importance of delegating your time as a leader once you’re driving millions in annual revenue.

Saul highlights that many Buy Box merchants position themselves to scale in two ways:

1. Hiring employees to begin working “in the business” (AKA day-to-day ops)
2. Stepping back to work “on the business” (AKA higher-level strategy)

It’s critical that every growing brand – no matter what stage of growth the business is in – remains proactive and diligent when it comes to finding the right banking partner to work with. Based on Saul’s operating experience, that partner of choice continues to be Highbeam.

"You know the adage: ‘Work on your business, not just in it.’ Hiring more people enables you to make stronger high-level choices and scale that much faster."