Funding White Label Products
Bridging the working capital gap caused by extended lead times and sea-shipping halfway around the world.
Case Details
Client Sector: Technology Distribution
Client Size: $xxxM
Project Duration: 36 months
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Introduction
When we first met the client, they were looking for a solution to help them grow their white label product line. Being a distributor, they were experts in the type of products their customers wanted and what they were prepared to pay for them in the highly price-sensitive region of Mexico. Meeting that expectation with a cost effective product that maintained the margin they needed to be able to range and market the products was a challenge. Being a distributor, their margins were already challenged in dealing with major CE and IT manufacturers and they were struggling to find the cash to be able to invest in their own project.
About our client
With more than 20 years in the technology distribution market and a significant level of business with major manufacturers, our client is no stranger to success in the retail markets.
Why did they need us?
The company was already distributing well known global, household brands but wanted to grow its own white label range of products, which are mostly TVs, laptops and tablets for the home consumer. The suppliers are based in China with deposits being required at order placement stage and balance paid on collection. Due to the long manufacturing time and long freight time to Mexico, this puts a strain on the company’s working capital.
Why did they choose us?
The client was impressed with our track record of helping clients bridge their financial gaps, and the simplicity of the solution we proposed. They were very happy that we could solve their issues without our processes getting in the way of their day-to-day business.
What solution did we create?
We took over responsibility for factory management, product procurement and international logistics. We paid the deposits to the factory, then paid the balance on collection. Through our logistics team. We were responsible for the logistics from China to Mexico and the customs import process. We invoiced our client upon arrival at the port and provided up to 90 days terms for payment. Full reporting and inventory visibility was provided at every stage to our customer giving them renewed confidence when promoting consumer retail campaigns.
What were the results?
Our customer saw an immediate positive effect. They could confidently promote and grow their own white label brand to their retail consumers, across all stores in Mexico, confident in the knowledge that the goods would arrive at the right time. This was especially important during Q4 peak season.
Over a 3 year period, revenue for their white label range grew by 250%.
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