Blog/News

ETC Announces Small Business Award!

Express Trade Capital is inviting wholesale businesses to apply for the first annual ETC Trade Show Grant & Community Outreach Award! This award reflects our personal commitment to helping our community and encourages our friends in the wholesale industry to join us in giving back.

Requirements to apply for the 2019 ETC Community Outreach Award are:

  • Application must come from an owner or authorized representative of the nominated wholesale business.
  • Nominated businesses must sell consumer goods to retailers in the US with a minimum annual sales volume of $100,000 USD.
  • Applicants must demonstrate their business’s commitment to the community at large, whether through charitable giving, volunteer work, or other creative methods.
  • All applications must be submitted by February 28th, 2019.

We will announce a winner on March 28th, 2019. The winner will receive $3,000 USD toward a booth at a trade show of their choice.

Click here to apply today!


Back-to-Back Letters of Credit

Sam Permutt, Express Trade Capital

A back-to-back letter of credit (LC) is a common, but often overlooked, form of trade financing.

In a typical back-to-back LC scenario, an intermediary trading company receives an inbound LC from the buyer’s (applicant’s) bank and, using that first LC as collateral, issues a second, outbound LC in favor of the supplier (beneficiary).

Back-to-Back Letter of Credit graphic

Back-to-back LCs are surprisingly simple to coordinate, as both LCs are nearly identical. The only differences between the two LCs in a back-to-back LC model are the credit amount vs. the unit price and the expiry date/period for presentation/latest shipment dates. The unit price is how much the product will cost the final customer, whereas the credit amount accounts for the wholesale costs. The timing of the two LCs must be staggered to allow time for each party to process and transport the shipment.

The additional layer of security that back-to-back LCs provide comes not only from the presence of two separate, albeit nearly identical LCs, but also from the fact that both LCs are available at the intermediary’s bank. This centralized method of monitoring reduces risk and secures all parties involved in the multi-tiered transaction at hand.

Back-to-back LCs therefore help build trust between buyers and sellers of goods around the world, reduce credit risk, and speed up cash flow. They’re beneficial to the intermediary trading company insofar as the company does not need to disclose to its supplier the details of the ultimate buyer of the goods or even the price at which they were sold.


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Acquisitions: a Blessing or a Curse?

Sadie Keljikian, Express Trade Capital

Big brands, particularly food brands, have been merging with and acquiring smaller brands for decades. In recent years, food and drink executives have continued to strategically acquire small brands, but struggle to boost productivity among those acquisitions without damaging or cancelling out any of the fundamental qualities that made the small brands worth buying.

This struggle to maintain the appeal of a small brand while operating under a massive international conglomerate like Coca Cola or Hershey has become increasingly challenging as consumer priorities evolve. When a big brand acquires a smaller one, consumers tend to be concerned, at least initially, about the product remaining consistent. Over time, however, other issues often arise. A strong company culture and drive to innovate, both of which are often crucial to a small brand’s success, can get lost when a big brand takes over.

A prime example is the trajectory of natural food brand Kashi since it was acquired by Kellogg Co. in 2000. Prior to the acquisition, Kashi was one of the first brands to usher in the now-lucrative and popular industry of healthy foods made from simple, ethically sourced ingredients. Though the partnership worked for a while, Kellogg’s impulse to control Kashi’s internal operations eventually took hold, which hindered Kashi’s ability to constantly innovate and improve its products. Before the acquisition, teams of three or four people made decisions about everything from suppliers to pricing to new product development. In an attempt to take more decisive control, Kellogg’s convoluted Kashi’s processes, slowing down their decision-making capability and complicating attempts to change or grow.

To be clear, no one is saying that big brands shouldn’t acquire smaller ones. There is immense potential value in giving young, fresh businesses the resources that big brands have. However, when acquiring a young company that’s found a niche and an audience, one should be aware of what makes the small brand appealing to consumers and make every effort to maintain and support those qualities, while still facilitating increased production and global reach.

Some of Walmart’s recent acquisitions, notably Bonobos, are perfect examples of this. When Walmart initially acquired Bonobos, there was considerable public backlash. Fans of the online men’s wear brand were concerned that quality would plummet in favor of lower prices when Walmart took over. Walmart wisely remained “hands-off”, allowing Bonobos to uphold its central values as a company: high quality, a good fit, and inclusive sizing. As a result, Walmart indicates that its online sales have increased substantially since it acquired Bonobos among other ecommerce brands last year.

Needless to say, it’s a tough balance to strike, but since changing a formula that works for a small brand is a bad idea, it’s obviously important for big brands to rigorously research whatever businesses they plan to acquire. It’s also important to keep key team members from the smaller business involved and give them input on how the business moves forward after the acquisition, rather than commandeer operations entirely. Simply creating an open line of communication can do wonders to not only maintain the acquired brand’s growth and success, but also to establish a positive working relationship between new management and the people who made the business successful in the first place.


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Peak Wholesale Seasons

Sadie Keljikian, Express Trade Capital

If you’re relatively new to the wholesale business, you may find it difficult to navigate peak seasons for wholesale orders. Without ample experience, preparing for these times of year can be a bit of a scramble, but here are a few tips to help you prepare for the busy seasons:

  • Know when your busy seasons are.

This will depend on your industry, as peak demand for different kinds of products varies. There is no hard and fast rule for this, but generally speaking, the following timelines apply:

Apparel orders generally peak between December and January and then between July and August. Footwear and accessory items peak between late December and early February, then again between late July and early September. Hardgoods tend to peak in late January and early March, then again in August-September.

  • Manage your timeline.

To take full advantage of busy seasons successfully, make sure that you have time to fulfill the orders you receive. You can even implement a deadline for your customers to place their orders with you during the busiest times of year (I.E. holidays, back to school, etc.). Generally speaking, your customers will prefer to submit their orders early anyway, but a deadline will ensure that you don’t end up struggling to keep up with last-minute orders.

  • Favor big orders.

During less busy seasons, fulfilling small orders from your retail customers isn’t a problem since orders are generally staggered, which keeps you from becoming overwhelmed. During peak seasons, however, you may want to set a (reasonable) purchase order minimum, either in cost or in number of units. This will distill your orders to the ones that are most worthwhile and discourage your customers from ordering piecemeal, which can throw a wrench in your production schedule.

  • Assess production costs and plan accordingly.

One of the primary challenges any wholesaler faces is managing the cost of fulfilling orders, particularly when retail customers usually prefer to pay on open terms. If you can manage your operational costs such that you are prepared to spend more that usual on production, you’re in great shape. If not, you may want to consider seeking out financing your purchase orders, receivables, or both. These services are generally inexpensive and will allow you to fulfill larger orders than you could otherwise afford.

  • Ship with care.

If you aren’t experienced in managing your own logistics, you may want to seek out a professional, particularly if your production takes place overseas. Any wholesaler who’s experienced subpar logistical management will tell you that a lot can go wrong when your goods are being transported. If you haven’t developed a solid relationship with your factory yet, it may also help to use a letter of credit in place of a deposit when you place orders with them. The letter of credit will protect you from losing your deposit and ensure that your goods arrive on time and as expected.

  • Be ambitious, but reasonable.

Provided that you prepare scrupulously, there is no reason not to be a bit ambitious in planning for your peak seasons, but be mindful of overextending yourself and your resources. Dreaming big and taking risks is part of the territory for an entrepreneur, but be sure that you do the math and make sure you don’t find yourself stuck without the means to complete your orders.


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Trade War Begins

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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Seeking Your Buyers

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.


Competing Within Your Industry

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:

  • Price

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 . . .

  • Quality

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.

  • Speed/Efficiency

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.

  • Scope of Products

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.

  • Business Ethics/Values

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.

  • Reputation/Client Loyalty

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.

  • Honesty

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.

  • Flexibility and Customization

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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Pet Industry Booms

Sam Permutt, Express Trade Capital

Despite uncertainty in several consumer product industries, the pet product industry is not only surviving, but growing. Indeed, many would say it’s flourishing as sales of specialized pet services (including groomers, trainers, and boarders) and healthy food (non-GMO, organic, paleo) are on the rise. Last year, the pet food industry (close to $30 billion) grew three times as fast as the packaged food industry – and that doesn’t even account for the toys, Halloween costumes, and GPS tags we buy for our pets.

Here’s a snapshot by numbers of the industry as it currently stands:

  • The industry is now valued at $86 billion.
  • Sales have continually increased year over year, even during the 2007-2009 recession years; average annual growth since 2002 has been 5.4%.
  • 65% of all US households have a pet – up from 56% in the late 1980s.
  • There are more than 24 million millennial pet owners, the largest pet-owning population in the country.
  • Average household spending on pet products is $500 per year, more than spending on alcohol and men’s and boy’s clothing.
  • Total spending on pet products is growing about 50 percent faster than the retail sector as a whole.

76% of owners consider their pets “beloved members of the family,” so it’s no surprise that they spare no expense when it comes to their furry friends.

Happy International Pet Day!


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