Blog/News
We at ETC are pleased to announce that Helen Ku has been promoted to Senior Vice-President and Client Portfolio Manager effective immediately. In addition to her current responsibilities, Helen will have full responsibility for the entire factoring and purchase order financing portfolio of clients.
Learn more about our trade finance services here.
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Sadie Keljikian, Express Trade Capital
President Trump’s promised trade war has begun and it doesn’t look like there will be any winners.
Earlier this year, Trump imposed a series of new import tariffs on goods made outside the US, particularly those made in China. The move has been controversial, largely because each affected country’s respective economy relies heavily on exports. As many economists predicted, however, China, India, the EU and Russia have all fired back.
The president signed the so-called “Trump Tariffs” in March in an attempt to combat “unfair trade practices“ in China and other manufacturing hubs. The newly established tariffs targeted $34 billion in Chinese-produced goods, as well as numerous steel and aluminum goods manufactured abroad.
Shortly after news of the proclamations broke, the EU pledged to place new tariffs on American-made goods in retaliation. Soon after, China announced plans to impose a 25% tariff on US exports, including motor vehicles, soy beans and lobster, which also total at $34 billion in value. Russia followed suit last week and began introducing its own tariffs on US goods, including mining and road building equipment as well as oil/gas industry products. India joined in last week as well, notifying the World Trade Organization that it would raise tariffs on 30 US products including almonds, seafood and chocolate.
Experts continue to debate the precise effects that the trade war will have, but many agree that US traders will struggle to maintain financial stability and accessibility to everyday consumer goods. Although the US is economically stronger than any of the other involved countries, we lack the infrastructure and workforce to supplement the manufacturing resources on which we’ve become dependent in recent decades.
The trade war also drew controversy within the White House and among the Republican party. Several party leaders including House speaker Paul Ryan and former White House economic advisor Gary D. Cohn lobbied against the trade plan. Cohn even resigned shortly after the plan was set in motion, though it is unclear whether he left specifically due to the trade war.
As of now, it is still unclear what the lasting effects of this trade war will be, but sources warn that US consumers and exporters will suffer the most. It may seem counterintuitive, but a combination of the price increases on goods that we continue to import to meet demand and the devastating effect that retaliatory tariffs will likely have on US farmers and manufacturers will probably have a far more detrimental effect than most activity in the ongoing struggle.
Needless to say, it’s difficult to predict precise outcomes this early in the process, but given the buying and manufacturing powers at hand, the international trade industry may change dramatically.
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Sadie Keljikian, Express Trade Capital
Fears of the “retailpocalypse” have died down, but brick and mortar retailers may be overlooking some of the most pressing problems they face in their attempts to innovate and better serve modern customers.
Following dismal sales last year, retailers began frantically creating new, often diversified versions of their former stores. Some are combining low-cost fashion retail with items typically found at grocery stores, others have opened popups and smaller store locations where customers can try items on before ordering them online. Although these methods are objectively good ideas, they fail to address another widespread problem: retailers and developers often ignore the culture of the neighborhoods where they plan to open new stores.
Although brick and mortar sales are improving in general, chic neighborhoods like New York City’s Greenwich Village are plagued with long stretches of empty retail space. Vacant storefronts, particularly on Bleecker Street, are the result of some overeager decision making following the gentrification of downtown Manhattan in the early aughts. Soon after wealthy new residents started arriving, so did a variety of upscale businesses. Some were successful but, eventually, a number of luxury retailers began popping up. They made decent sales initially, but soon it became clear that there wasn’t a demand for so many luxury goods in the Village, and stores began to close.
The fact that high-end retailers didn’t find a demand downtown isn’t shocking in itself, but by the time they closed the problematic lasting effect had already taken place. Since so many luxury brands appeared in such a short time, real estate prices rose so quickly and so dramatically that even the retailers who drove them couldn’t keep up. As a result, many commercial spaces remained empty months or even years after their previous tenants closed up shop. And they continue to remain empty.
It makes sense for high-end retailers to “follow the money,” so to speak, but they should still consider the history and reputation of the neighborhoods where they open stores. Greenwich Village has a rich history of diverse culture and art, including the LGBTQ community, numerous immigrant communities, and artists of every discipline and type. Though many of the people who brought such unique variety to the neighborhood are no longer there, the association remains. Thus, wealthy newcomers choose to move to the village for its historical uniqueness and creative atmosphere, rather than for high-end amenities.
The missing link seems to be that the choice to move downtown says quite a bit about the new residents. Given the income bracket in question, these residents could choose to live in almost any neighborhood, including New York’s Upper East Side, famous for its high-end retail and “old money” residents. The choice to live downtown suggests an interest in creativity and diversity among both the people and the businesses that populate the neighborhood. Although they may have a passing interest in luxury goods, they probably don’t prioritize them.
This same principle applies to retailers across the board. It’s often wise for businesses to swoop in when a town or neighborhood sees an uptick in residents with disposable income, but some basic market research can help determine if the newly popular location will be worth joining. If a neighborhood is populated with young families, a nightclub probably won’t do much business. Likewise, young people who are drawn to famously creative communities probably don’t care too much about high-end brands in their neighborhoods.
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Valued clients and associates:
Please be aware that our offices will close at 3pm on Tuesday, July 3rd and will remain closed until July 5th at 9am in observance of Independence Day. Please plan your transactions accordingly and have a safe and pleasant holiday.
Ari Markowitz, Express Trade Capital
As a product manufacturer you are always considering ways to grow your company and get your products in front of the people who are most interested in purchasing them. There are several ways of approaching the sales process, and through this post we explore several of the most important.
Trade Shows
Likely the most formal and most traditional method of reaching potential buyers for your products is through trade shows. Events like Moda, Mobile World Congress, and the Advanced Manufacturing and Design Expo are excellent ways of getting your products in front of hundreds if not thousands of prospective clients.
Trade shows offer exposure to an audience that is more interested and relevant to buying your products than any audience or venue. There will be buyers from multiple organizations walking around looking for products just like yours, and they will be interested in speaking with you to either set up a meeting or learn more. It’s a strong way of breaking into an industry and reaching the right people at the right time.
The downsides to a tradeshow can be burdensome however, and especially taxing on smaller companies. One of the most common problems with tradeshows is the cost. To have a booth and present at a tradeshow, you need to come prepared. Typical costs include registration fees for the actual booth, materials needed to show off your products, transportation and accommodation required to attend the show, the cost of amenities within the venue including things like Wi-Fi, and lastly the setup and teardown costs mandated by the venue staff.
Digital Aggregators
Where traditional methods of getting your products in front of retailers may be inefficient and difficult to scale, online platforms allow the introduction process to yield a greater benefit.
Services like RangeMe, Maker’s Row, and ThomasNet bring suppliers and retailers together in an entirely new way, creating an easier method of introducing value to both parties. With modernization and the age of the internet have come new efficiencies that coincide with the transactional process between buyers and sellers. The other important benefit that comes from using services like these is the capture of data and potential application of that information across various analytics channels. This kind of data is important because it allows for better decision making across every element of a business and informs relevant stakeholders on where to focus to drive the greatest amount of value.
Unfortunately, digital aggregators also present the threat of competition, leading to marginalization of product portfolios. As multiple aggregators materialize, similar products are spread across each of them, thus requiring buyers to spend more time searching for your product and often causes them to overlook your product entirely.
Multi-Channel Presence
Often, the best approach to reaching retailers and potential customers is multi-pronged. It’s more effective to try a combination of both tangible and digital methods in pitching to potential customers and expanding into what works best for you and your products. Having a presence in both types of media is important to reduce the risk of being overlooked, however, it’s certainly tenable to throw more resources at one method over another once you learn what’s best for you.
Having a multi-channel presence is also important because it encourages your business to explore all open opportunities. There are constantly new channels, platforms, and events that might be relevant to your business and having an open mind in exploring them is essential. Your competitors will fight just as hard to get in front of retailers, so it’s important to never let your guard down or get too comfortable in the notion that what you’re doing is enough.
This piece is intended to provide an opinion on how a business can best use its resources to grow. At Express Trade Capital, we work with hundreds of small businesses and entrepreneurs every year, and we are happy to provide a closer look at your business and how we can assist in your growth. You can reach out to us here.
Sadie Keljikian, Express Trade Capital
Is your workforce happy?
Many businesses struggle to answer that question, and those who don’t usually know the answer: “no.” Contrary to popular belief, people aren’t categorically miserable in their day-to-day work. Generally, they find specific aspects of it frustrating, but managers and business owners often fail to identify the components that need to change. A happy workforce is a productive workforce, so taking an active interest in your employees’ satisfaction is both kind and shrewd. Here are a few ways to keep tabs on morale and address issues as you learn about them:
Most CEOs and managers assume their employees want more money, but the reality may surprise you. The solution is often simpler (and cheaper). Although most entry-level employees wouldn’t argue with a pay raise, they’re usually more concerned with things like life-work balance, health benefits, and other resources like childcare, transportation assistance and higher education for themselves and/or their children.
Giving your employees a voice allows you the opportunity to address the actual problems your workforce faces instead of guessing and potentially wasting money on the wrong solution. Distribute a company-wide survey or implement a suggestion box to let your employees air their thoughts and concerns anonymously, the results will inform your next move.
In the day-to-day hustle and bustle, it can be easy to take your employees’ work for granted. However, appreciation for hard work done well can make all the difference to a dedicated employee. Make a point of showing your appreciation in whatever way possible; whether it’s a large-scale reward system like “employee of the month” or smaller rewards like a free lunch for the most productive team members, make sure your highest performers know that you appreciate them.
Offering to help your employees with daily expenses like transportation or childcare demonstrates an appreciation for their concerns outside of work. Employees, particularly in large-scale businesses, often feel that their humanity is ignored in the workplace. So, helping them with a non-work aspect of their lives will make them feel seen and appreciated.
This may sound difficult, and it will be at the beginning, but taking an interest in your employees’ dreams and future plans will tell them that their job, whatever it may be, is a means to their personal ends. This goes back to listening to your employees. If you can find out what their aspirations are, you may be surprised how easily you can facilitate them. For example, if you have employees who’d like to receive higher education of some sort, you may be able to work out a deal with a local community college or state school to get your employees access to cheap or free classes.
Although company outings and team building activities are often seen as cliché, it’s important to establish trust and a friendly rapport among your employees. Whether you decide to institute a pet-friendly office (after inquiring about all office workers’ allergies, of course), install a foosball table, or occasionally plan social gatherings, your staff will appreciate the stress relief and the opportunity to bond with one another. Even just one casual gathering (IE a bowling night, board game night, or potluck dinner) per month can make a dramatic difference in a team’s ability to work together.
No one expects their workforce to be overjoyed all the time, but taking steps to keep your employees happy and motivated is easier than you think and will do wonders for your team’s productivity. All you have to do is listen.
Sam Permutt, Express Trade Capital
Receivables factoring is a tried-and-true solution for insufficient cash flow in business-to-business sales relationships. It allows vendors to sell large orders to retailers and assign the receivables to a factor, helping to avoid depleted operational funds while outsourcing collections labor and, in many cases, the risk of unpaid invoices.
Lately, we’ve received numerous inquiries about the difference between “full-recourse” and “non-recourse” factoring.
To address these queries, here are five things to know about these different types of factoring:
Full-Recourse factoring means that the vendor, not the factor, bears the risk if the retailer does not pay the invoice.
Non-Recourse factoring means that the factor, not the vendor, absorbs the credit risk. If the retailer goes bankrupt or insolvent – or even refuses to pay without reason – the burden falls to the factor to pay the invoice.
Hybrid recourse/non-recourse factoring means that the factor will provide credit protection for a portion of the invoice. The amount of risk the factor will take on depends on how much of that invoice the retailer will likely pay.
The risk of normal chargebacks and disputes is not covered in these instances.
The benefit of non-recourse factoring is that the vendor knows that once her invoices are factored she can rest assured that one way or another, she will be paid.
To speak more about non-recourse factoring, please contact us.
Express Trade Capital is sending two representatives to the IFA conference in Miami, FL, which begins tomorrow. If your factoring prospects or clients require letters of credit, financial instruments, purchase order or inventory funding, and/or logistics services, let’s connect while we’re here!
In short, ETC partners with banks and alternative lenders to offer a one stop shop for all trade financing services that allows lenders to enhance offerings while expanding their network beyond the standard third party molds and models.
If you’d like to attend, email David Estrakh at david@expresstradecapital.com or Sam Permutt at sam@expresstradecapital.com
Representatives from the ETC team will be exhibiting at the Small Business Expo NY at New York City’s Jacob K. Javits Convention Center all day tomorrow!
Join us at BOOTH 511 to meet with some of our staff and learn how our financial and logistical solutions can help your business grow and thrive.
We are thrilled to attend this event for the third year running and look forward to networking with old friends and new!
Sadie Keljikian, Express Trade Capital
Standing out in your industry can be tricky, especially if you work in a competitive field. To get ahead of your competition, it’s important to develop and demonstrate the unique qualities you and your business can offer. Here are a few ways you can distinguish yourself from other players in your industry and break away from the crowd:
It may be the most obvious point of comparison, but if you can distinguish yourself on pricing, you should do so and you should advertise as such. Compare yourself to businesses that provide similar or identical services/products and demonstrate your ability to fulfill the same need at a lower price.
Beware of competing with bigger businesses on price. Larger companies can generally underprice smaller ones because they typically have lower costs due to economies of scale. Moreover, although extremely low prices may bring a surge of new business, it is important to make sure your profits are sustainable.
However, lower prices are not always the answer. Sometimes, a higher price signals quality for which customers are willing, and even eager, to pay a premium especially if they believe those items are better in other ways . . .
If you can provide and demonstrate quality superior that of your competitors, it won’t necessarily matter if your prices are higher than your industry’s average. In fact, counterintuitively, higher prices may attract more purchases in the right circumstances. Many customers are willing to spend more 
for quality assurance. Whenever possible, use objective data to support your claims.
Some industries are notorious for taking a long time to process orders or engage services. If you have created an effective system to speed up your processes vis-à-vis competitors, let your prospects know! This is an especially attractive perk to offer when you sell products or services that your customers typically need upon demand. Customers want to know you can deliver quickly and efficiently.
If you have a wide variety of goods or services, and/or if you offer a combination of goods/services that is rarely offered in your industry, you’re already ahead of the game. Business clients particularly love a one-stop shop. If they find a business they trust and with whom they like working, they’ll want to take full advantage of that business’s range of offerings rather than shop around for multiple providers.
Having a wide range of products also allows for sharper pricing through bundling, which can increase cross sales by enticing consumers to purchase other products in your line. For example, you can cut the price of one product if a consumer agrees to purchase an additional product.
Good policies and philosophies can be marketed to distinguish the quality of your business. Recently, advertising conscientious business practices has become a massive trend everywhere from independent retailers to international corporations. Whether you focus on helping the environment, meticulously sourcing your goods and labor to observe fair trade policies, charitable giving, or any other activities that demonstrate your business’s ethical beliefs, it’s a good idea to publicize your efforts.
This is more relevant to businesses that have been in operation for a while and have developed a following. One of the most favorable things a customer can hear about your business is that your clients/customers stay on board with you after your initial transaction. It means that you treat your customers well and run your business ethically, so always strive to keep existing customers coming back for more.
This is similar to business ethics and reputation. Unfortunately, many businesses stretch the truth in the sales process or pull bait and switch tactics to win clients. Many of your prospective customers have heard sales people make over the top claims and gloss over their disadvantages or imperfections. Fortunately, this creates an opportunity for good businesses to capitalize on the poor reputation of their less scrupulous peers.
While deceit sometimes seems like the best way get immediate sales in the short term, prospects will quickly discover the ruse and eagerly post poor reviews. Consumers respect you and your business more if you’re upfront about what they can expect from you, even if the truth is that you cannot deliver on certain requests. The more open your line of communication with them, the more inclined they’ll be to work with you long term. In the long run, it is often better to under-promise and overdeliver than vice versa.
If you can provide more hands-on services or otherwise offer flexibility or customization, many customers are willing to pay more or forego working with larger or more established companies whose operations are too large to accommodate those personalized specifications. Some larger companies deliver goods or services in set ways that have little flexibility because allowing for individualized customization may cost too much to implement on a wide scale.
In fact, many larger companies systematize their processes, which reduces costs and increases efficiency for their clients in many instances. However, systemization can also make larger companies unable to service more specific and specialized consumer demands. Smaller companies can take advantage of this by filling in the gaps where their larger competitors are not willing to venture.
Many of the above listed qualities bleed into each other. For example, better quality allows for higher prices and honesty is directly related to business ethics and reputation which are both in turn facets of your quality. Meanwhile, good customer service and sales practices can improve the perception of your business in virtually all areas.
The key is to see your business on a variety of dimensions which will allow you to distinguish yourself on multiple fronts. A competitor may be larger and have many more years’ experience but they may be set in their ways and inflexible when consumers require them to deviate from their standards and practices. In short, dynamic businesses who stay vigilant can stay ahead of competitors by seeing and seizing on opportunities and gaps left by competitors.
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