Blog/News

Review: International Trade

Viviane Simond, Express Trade Capital

The international market is in a particularly remarkable state of flux due to a wide range of contributing factors. Between the effects of climate change, political upheaval, and shifting consumer habits, the future of international trade has seldom been so uncertain.

Climate change may prove to be the most pervasive influence on the international market at large. Recent studies predict that climate change will generate violent storms and intense flooding that could damage ports, railways, roads, and harvests in high-traffic areas. Our ever-increasing reliance on global trade routes compounds the difficulties governments face in their attempts to manage the effects of climate change. This combined effect of growing demand and dwindling supply threatens to create raw material shortages and unexpected price hikes.

Climate change causes harvests to be more variable, which threatens the reliability and integrity of the infrastructure on which international trade depends. There are fourteen major choke points around the world (including the US Rail Network, Panama, Suez-Canal, etc.) that are vital to adequate distribution of food supplies. The US, Brazil, and Black Sea collectively account for about 53% of global exports including dietary staples like wheat, rice, maize, and soybeans. Any major obstructions to one or more of these choke points could lead to a supply shortage and price spiking. These issues may risk systemic stability and human security in the world’s most insecure and politically unpredictable regions if governments don’t devote significant resources to solutions. Thirteen choke points have been subject to closure or significant traffic restriction over the past 15 years.

Terrorism, even just one instance in one location, can hinder international trade throughout an entire region. Attacks also affect long term economic activity, since trade is typically condensed for about five years after an attack takes place. Counter-terrorism efforts delay shipments, which hurts vendors, buyers and shippers alike. As a result, transactions take significantly longer. Food products become much more susceptible to shipping delays and supply chains are disrupted due to tighter border regulations. Unfortunately, these delays can be extremely expensive.

In the wake of terrorist attacks, airport security surcharges and insurance premium rates increase, as do shipping and customs requirements, which cause delays and increased trading costs across the board. Unfortunately, non-tariff barriers established in the name of counter-terrorism, like restrictive outsourcing policies, often tend to protect certain industries more effectively than they do individuals. Unrestricted trade enables nations to work together and fuels economic prosperity and development. By reducing trade, counter terrorism policies inadvertently drive a wedge between trading nations and hurt their economies. Consequently, countries that lose money due to trade restrictions are less able to combat terrorism.

Brexit will likely have a massive effect on international trade patterns, depending on how British Parliament implements it. Since immigration concerns were among the primary driving forces behind the Brexit vote, the UK is likely to lose a significant portion of its migrant workforce. This will likely put a damper on productivity, economic growth, and job opportunities. Furthermore Scotland, which voted overwhelmingly to remain in the EU, intends to hold an independence referendum in response to the economic difficulty it will probably suffer as a result of Brexit. This proposed “Scexit” would alter the UK’s political character and potentially increase the rift between the UK and the EU.

During the Brexit proceedings, the UK will have to renegotiate legal framework for their trade relationship with the EU as an outsider. In the process, the EU will probably implement tariffs on UK-produced goods in an attempt to balance the scales. As of now, the UK is still a part of the EU, so British companies can trade with the EU on a tariff and quota free basis. There are rumblings of intimidation tactics between EU countries and the UK, including a possible automotive trade war between the UK and Belgium. Fortunately for the UK, their trade relationship with the US will not be affected. However, when Brexit is fully in place, Europe and the UK’s relationship as well as their trade agreements will probably be quite different.


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Negotiating Payment Terms

Sadie Keljikian, Express Trade Capital

As a wholesaler, negotiating payment terms with your retail customers can be complex and lead to friction. Fortunately, most retailers are reasonable and will work with their vendors to find a compromise. Furthermore, there are ways to work around an insistent customer who refuses to yield to their vendors’ needs.

Where do I begin?

Depending on the customer, a variety of factors can affect the agreed payment terms. First and foremost, it’s important to understand the power you have as a wholesaler and the power your customer has as a retailer. Since retailers are the customers in this arrangement, they usually get the most consideration. Big-box retailers are particularly aware of how much value they hold as customers, since they typically have good credit and place the largest orders their vendors receive. Thus, large scale retailers often seek the best, or longest, payment terms (N90 or more), since most of their vendors are willing to accommodate them.

As a wholesaler, you too have power in the equation, particularly if your product sells well. The more unique and/or popular your product, the more retailers will want it in their stores and thus the more willing they will be to meet your needs.

It is important to bear in mind that, although payment terms are negotiated at the onset of the wholesaler-retailer relationship, larger scale retailers usually don’t use long-term contracts. Instead, individual purchase orders serve as contracts.

What if my customer or I need to adjust terms?

Typically, if either a customer or a wholesaler needs to alter the agreed upon payment terms, it prompts another round of negotiations. If a long-term contract is in place, unilateral adjustments of payment terms are legally prohibited and can result in a lawsuit, so a new agreement must be reached between the two parties.

Sometimes, big retailers (who, as mentioned, typically do not enter long-term contracts with their vendors) will change their policy and formally announce that all future purchase orders will be under new payment terms. If you find yourself unable to agree to those terms due to cash flow concerns, you have a few options.

What are my options when my customer wants better payment terms than I can reasonably offer?

  • Negotiate again. – Although big retailers typically prioritize their own business interests, they will sometimes make exceptions for valued vendors. This is where your worth and power as a vendor comes in, because if your customers care enough about keeping your products in their stores, they may be willing to come to an agreement.
  • Turn down the order. – If your customer is asking too much and won’t negotiate to meet your needs, you can always turn down that customer’s purchase orders. This may hurt your revenues, since the customers who typically ask for extensive payment terms are the ones who will place consistent, large orders. But again, if you aren’t under a long-term contract, you are under no obligation to fulfill every purchase order.
  • Factor your receivables. – If you can’t wait as long for payment as your customers want you to, but don’t want to lose business, you can factor your receivables. In a factoring agreement, a lender will advance you most of the value of your fulfilled invoices, then collect on the invoices from your customers. In other words, in exchange for a small percentage of your invoice values, you will receive payment immediately and no longer need to worry about collecting from your customers.
  • Finance the purchase orders. – purchase order financing, or “PO funding.” PO funding is an arrangement whereby a financial institution pays manufacturing and shipping costs for wholesalers against confirmed purchase orders. It’s a nearly perfect system for situations like this, since the customers with the most leverage (i.e. the ones that request better payment terms) are usually credit worthy.

Although the lack of an overarching agreement can make payment terms seem a bit murky, the longer your relationship with your customers and the more customers you have, the more you will be able to gain leverage and do business the way you want to. Know your rights and options and you will be prepared to manage any customer, regardless of their preferred terms.


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Decoding Invoice Terms

Sam Permutt, Express Trade Capital

Making sense of the various terms contained in invoices can be frustrating. Plus, terms are getting trickier and more involved as big customers continue to strategically extend their payment terms and interrupt cash flows for smaller businesses (in turn creating a greater need for factoring). When negotiating a purchase order or contract, it is essential to know what payment terms are, what they mean, and what options exist.

To help make sense of the most used invoice terms, here’s a helpful cheat-sheet:

Net due upon receipt of goods (or n/ROG)

If the terms are net due upon receipt of goods (or nROG, or n/ROG — “n” standing for “net”), the invoice amount is due when the customer receives the goods. Note that the date of “receipt” is up to the customer receiving the goods; goods can remain in a shipping container, for example, before the vendor decides to “receive” the goods. However, if the terms are Net 30 ROG, that means payment is due 30 days after the receipt of goods.

Net 30 days

Payment terms that require a simple count of days after the date of the invoice (e.g. N30, N60, N90, etc.) are the most common terms used between wholesale vendors and their retail customers. Luckily, they are also straightforward and easy to understand.

When an invoice states net 30 days (typically written as “N30”) the invoice amount is due 30 days from the date of the invoice. For example, if an invoice for $1,000 is dated July 1 and the terms are net 30, you need to pay $1,000 by August 1 or else additional fees or interest may apply. If the terms are net 60, the payment is due on September 1st (i.e. 60 days after the invoice date). For net 90, payment is due on October 1st (i.e. 90 after the invoice date), and so on.

1/10 Net 30

When an invoice includes the terms 1/10, n/30, the “1” represents 1% of the amount owed, the “10” represents 10 days and the “30” represents 30 days. According to the terms 1/10, n/30, you may take an early payment discount of 1% of the amount owed if the amount owed is paid within 10 days instead of the normal 30 days. In other words, you can pay within 10 days and deduct 1% from the invoice amount or pay the full amount in 30 days.

2/10 Net 30

Just like 1/10 Net 30, with terms of 2/10, n/30, the “2” represents 2%, the “10” represents 10 days, and the “30” represents 30 days. This means that the customer can take an early payment discount of 2% of the amount owed if payment is made within 10 days. In this scenario, the customer can choose either of the following: pay within 10 days and deduct 2% from the invoice amount, or pay the full amount in 30 days with no discount.

5/10, 2/30, Net 60

Under these payment terms, the customer gets a 5% discount if they pay within 10 days or a 2% discount if they pay within 11-30 days. Otherwise, full payment is due within 60 days of the invoice date.

Net 30 EOM

“EOM” stands for End of the Month. This means that the invoice is due and payable 30 days after the end of the month in which the goods were delivered. For instance, if the goods were delivered on July 15, payment is due 30 days after the last day in July.

Some account debtors (i.e. the buyers who owe payment on a given invoice) set cutoff dates whereby they consider all goods shipped after a certain date as if those goods were shipped the following month. For example, if the cutoff date is July 20th, and goods are shipped on July 21st, the buyer might start counting net 30 days after the end of July.

Net 10 EOM 30

Per industry practice, when an invoice is dated after the 20th of the month, the clock begins to run on the first day of the following month rather than at the end of the month in which the goods were shipped.

Therefore, if the invoice is dated July 25, the count starts 10 days after the month ends (thus August 10th) plus another the buyer has another 30 days to pay, meaning that the full amount is due on September 10th.

By contrast, if the invoice is dated July 19 – i.e., before the 20th of the month – the count starts 10 days from the invoice date of July 19th (thus July 29th) plus 30 days, meaning the full amount is due on August 29th.

*The party who is obligated to pay the invoice is referred to interchangeably as the “customer(s)”, the “buyer(s)”, the “retailer(s)” or the “account debtor(s)”.


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Why Use Purchase Order Financing?

Sadie Keljikian, Express Trade Capital

What is purchase order financing?

Purchase order financing is a trade finance solution designed to help businesses finance the production and shipping costs required to fulfill their customers’ purchase orders. This allows companies, typically wholesalers who import or export goods, to grow without selling equity or exhaustively increasing their bank lines.

In a purchase order financing arrangement, a financial institution pays for the cost of goods and shipping (or a substantial portion of that cost). Effectively, the payment is then a loan. Although a purchase order is not an asset, purchase order funders use creative means to secure their loan: in addition to filing a blanket lien on the borrower company, funders collateralize their loan with inventory which corresponds directly with the goods being provided by the supplier (and purchased by the financier on behalf of their client).

Why not just take out a traditional loan?

While purchase order financing, often called PO funding, is a remarkably useful tool for importers, exporters, and wholesalers across industries, it is also one of the least understood varieties of trade finance. As a result, businesses often don’t know it even exists and therefore miss the opportunity to fund their operations and maintain sufficient cash flow without accruing considerable debt. They usually agree to burdensome loan obligations, or relinquishing equity instead.

Many companies sign up for products that have a strong online presence or are otherwise easy to understand but are not ideal solutions. For example, SBA loans are very popular and inexpensive but they are also typically small, inflexible and take many months to get approved, whereas PO funding has none of those roadblocks. Alternatively, a lot of companies also take on high interest merchant cash advance loans (or MCAs) because they have invested a lot in marketing. MCAs are easy to understand, have quick and easy application processes and they employ aggressive sales tactics. However, PO funding offers more flexibility and greater loan amounts at a fraction of the cost.

Is purchase order financing right for me?

PO funding is helpful for companies who need capital to keep pace with their rapid growth or whose credit histories are insufficient to obtain traditional bank lines for operational capital. Unlike banks and traditional lenders, the purchase order funder underwrites the transaction rather than the credit of the business seeking the loan. Therefore, PO funders look to the credit of the final customer (usually a retailer) in addition to that of the wholesaler. By underwriting the transaction, the PO funder is free to look at the underlying purchase order and overall transaction structure rather than solely looking to the financials of the borrower.

In general, PO financing best suits suppliers with at least a few customers who place large orders. Having big-box customers is advantageous because they often have good credit, so your funding requests are more likely to be approved and financing costs will probably be lower.

Aside from credit requirements, purchase order funders look at many other aspects of the transaction. Purchase orders should have a minimum profit margin of 20% to provide enough cushion to cover the extra cost of PO funding. Purchase orders should also be non-cancelable. Due to wishful thinking or simple oversight, companies often overlook contingencies in purchase orders and might not realize that an order is actually on consignment, which allows the customer to return whatever goods do not sell. The purchase order can also call for partial consignment, unreasonably long terms, or any number of other onerous terms and conditions. PO funders are adept at reading purchase orders and helping their clients understand and structure their transactions more efficiently.

How are PO financing rates determined?

PO financing rates are proportionally based on utilized funds, meaning the amount that the finance company pays to the client’s supplier. Once the lender confirms the utilized funds, they use the supplier and the customer’s credit to determine risk. Like most traditional loan agreements, the bigger the volume, the lower the rates. Also, the greater the risk, the higher the rates.

Purchase order financing rates vary between lenders and locations, but on average, they are determined using a similar formula:

(a) Deal Fee – The funder will charge a “deal fee” or “facility fee” to do the transaction. The fee is usually 1-3% of the loan amount requested and covers service costs (i.e. processing and administrative costs).

(b) Interest – PO funders will then charge interest on the loan amount until the client pays it back. A typical PO funding interest rate is 2-3% for the first 30 days, and around 1% per 10 days after the initial 30. This is subject to change based on the creditworthiness of the client and/or that of their customer, and the risk involved in any given transaction.

How does PO funding relate to factoring?

While factoring and PO funding are different varieties of lending, they often work in tandem. When a wholesaler enters an ongoing factoring agreement, they receive funding against their invoices, which retailers repay (barring any issues). When factoring and PO funding are utilized in conjunction, funds lent against purchase orders can translate to an advance (or portion thereof) against invoices. In other words, the wholesaler no longer needs to repay the financial institution that provided funding against their purchase orders. The financial institution is then reimbursed when they collect from customers on the factored invoices.

How do I start?

If you plan to seek funding against your purchase orders, prepare yourself as best you can. Investigate your customers’ creditworthiness to whatever extent you can. If you and your customers have good credit, your lender will most likely approve your request and offer you competitive rates.

At the end of the day, the specific details of purchase order financing agreements vary from lender to lender and from one client to the next. Risk analysis is not an exact science, but if you find yourself short on operational funds and have reliable, creditworthy customers, purchase order financing can simplify your sales process and day-to-day finances significantly.


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Benefits of a Letter of Credit

Sadie Keljikian, Express Trade Capital

If you import goods, your suppliers probably require that you provide a deposit when you place an order. Suppliers usually request this for two primary reasons: (a) by getting an upfront deposit, the buyer is less likely to default on the remainder of the balance owed because the buyer would lose their deposit; (b) cash flow – the supplier needs funds to produce the goods and deposits are essentially interest free cash. Unfortunately for importers and wholesalers, deposits tie up and divert cash from day to day operations and other revenue generating or expansion oriented uses.

There are a few ways to avoid leaving substantial deposits or tying up cash to start production. First, you can minimize the size of your orders to avoid depleting your cash flow, but that would inhibit your growth. Big-box retailers generally place very large orders and offer significant opportunities to growing import businesses, so unless you find a way to accommodate these larger orders, it will be hard for you to attract big buyers. You can stagger orders so you don’t have to pay for everything all at once, but at some point, if you want to make substantial sales, you will have to find a way to finance large orders.

Another option to mitigate the burden of tying up cash for production upfront is to negotiate better terms with your supplier. If your company is large or you have a good history and/or trusted relationship with your supplier, you may be able to obtain goods on credit.  If you can get this option, use it.

A third option, if you want to take on larger orders and cannot obtain terms without leaving a deposit, is to offer your supplier a commercial Letter of Credit (“LC”) instead of a deposit. This gives your supplier a bank guarantee, which is an asset they can often use to obtain funding directly from their bank.

How do Letters of Credit work?

A letter of credit is a conditional assurance of payment provided to the supplier’s bank when the importer places an order. The LC is issued by a bank or financial institution on behalf of the buyer/importer and eliminates the need for a deposit by ensuring that both sides respect the conditions of the transaction.

Both parties benefit from an LC. The supplier becomes the beneficiary of a financial instrument they can use as collateral to obtain funding. They also obtain a bank guarantee of payment in addition to the buyer’s promise to pay for goods if all obligations are fulfilled. The buyer avoids the risk of tying up funds overseas and gets better control over the transaction. If the buyer uses a third-party provider, they can even obtain an LC without typing up collateral or cash lines with their own bank or financial institution.[1]

A commercial LC gives buyers comprehensive control over their importing process. It covers the cost of the goods themselves as well as shipping costs, allowing purchasers to keep their money until the goods are approved and shipped. While an LC may add to transaction costs, it grants the purchaser more control and more capital flexibility while giving the supplier more cash flow and some assurance of full payment.

Letters of credit benefit both the buyer and the supplier.

A letter of credit also serves as a layer of protection to ensure that you don’t waste time and money on an order that may not reach you on time or as expected. While your agreement with the supplier provides some degree of assurance that you won’t be left without your goods or money, there are no guarantees. Depending on the supplier, you may find yourself with faulty, defective, incomplete or late orders. Untrustworthy vendors can compound the issue by keeping your deposit regardless of their errors or inability to complete the orders as agreed. Without an LC, buyers can still take legal action against their supplier, but justice is uncertain and costly, particularly if the supplier is in another country.

In contrast, an LC requires collection of documents proving that the order is as expected and sent on time before the bank releases any payments to the supplier. The bank is basically acting as an escrow agent to ensure compliance by all interested parties. Thus, importers purchasing inventory overseas never need to worry about lost working capital due to failed or incomplete orders, and suppliers can still obtain the cash flow they need without burdening their customers.

Interested in discussing Letters of Credit or other trade financing and supply chain management solutions further?  Speak to one of our specialists.


One of the most important, often hard-won lessons is how to protect one’s self and one’s assets in transactional proceedings. Letters of credit are a safe, simple way to protect yourself and your purchase, especially in the case of international import/export agreements. You and your vendor are legally and financially protected, so you can even place orders from less-than-trustworthy vendors with confidence.

[1] Express Trade Capital specializes in issuing LCs on behalf of client without requiring cash collateral or deposits. We tie up and freeze our own lines on behalf of qualified clients undertaking verified commercial trade transactions.


Collecting on Tough Accounts

Sadie Keljikian, Express Trade Capital

Selling goods or services on open terms is a mixed bag. On one hand, open terms can attract more volume and bigger customers with the potential to accelerate your growth and increase revenues. On the other hand, allowing customers to pay later diminishes your cash flow and creates the risk of payment default.

Here are a few ways to protect yourself against delayed payments and handle tough customers:

Structure your payment terms carefully upfront.

The best way to avoid payment default is to carefully structure the terms of your relationship. You should perform credit checks on new customers before offering terms. If you can’t, at least ask for credit references to get an idea of that customer’s bill-paying habits. Use the information you gather to determine proper payment terms. For example, if a customer tends to pay late, you may want to take a deposit upfront, or include late payment terms or early payment discounts to offer incentive for timely payment. If a customer has a history of stiffing vendors and engaging in unethical practices, perhaps you should not offer payment terms at all and instead demand payment upon delivery or only deliver small quantities. Conversely, if a customer has good credit, you can offer terms and rest assured that they’ll pay.

As a recap, if you’re concerned about poor payment habits, include provisions in your customer’s contract indicating that you will charge interest on past-due invoices and update their payment terms if their payments are habitually late. If a customer is particularly problematic, require cash on delivery, or “COD”, rather than open terms.  Follow through on these penalties diligently. Mistakes happen, but imposing and enforcing a financial penalty on late payments and controlling your customer’s access to open terms gives you more leverage to collect.

Invoice punctually and consistently.

When feasible, invoice your customer for each shipment. Some vendors choose to bundle multiple shipments and transactions into one invoice periodically (i.e. weekly or monthly) to avoid large quantities of small invoices. However, combining transactions can cause problems when you’re collecting.

One such problem arises if a customer doesn’t communicate or place a re-order after their initial purchase. Because they aren’t invoiced immediately, they may forget or be difficult to contact for collections. Unfortunately, customers will sometimes dispute charges that they may or may not remember, which will further slow up your processes and potentially cause legal difficulties.

For these reasons, it is good practice to consistently and immediately invoice your customers each time you fulfill a customer’s purchase order. Once the goods are delivered or the service is rendered, invoice your customer soon thereafter to ensure that your records are accurate and that you’re always paid.

Follow up regularly and without apologies.

Following up with customers on past-due bills is uncomfortable.  There’s no denying it. However, if you are polite, professional, and follow up as a matter of course, collecting can be just a part of the process, rather than a cause for confrontation.  Another way to avoid bad blood is to outsource your collections to companies like factors who specialize in collections. By having a third party collect your invoices, you can be the good guy while your factor or collections agency does the dirty work for you.

When managing your collections process yourself, you should automatically check in with your customers as soon as a payment becomes past due. Always approach the situation logically and professionally and be firm, but avoid a “bad cop” attitude. Mistakes happen and your customer may not be aware that their payment is past due or there may be other legitimate reasons why they haven’t paid yet.

Whether it’s you or a third party (e.g. factor) collecting your invoices, be ready to enforce the terms and press the issue without apology. Although you may feel like the bad guy, you are ultimately creating an environment in which you and your customer can build a healthy relationship. Enforcing obligations re-enforces expectations and even helps your customers avoid interest charges and bad credit.

Keep careful records of all interactions, invoices and amounts in question in case your customer is confused and/or attempts to dispute payment. For example, if your customer wants a proof of delivery, you should have it filed next to your invoice. Since it is their niche, professional third collectors and factors are particularly adept at keeping records at making sure documentation is in order.

Stay involved and keep tabs on past due payments.

Some customers are tricky. They may tell you there’s a check in the mail or that they’re sending it today, when in fact, they are perpetually late with payments and often lying. These kinds of customers require a particularly shrewd approach. If they are local to you, offer to send a courier to pick up payment rather than have the customer send it in the mail. If not, consider selling to them exclusively on COD terms or requiring them to pay you via credit card to avoid delays. Get creative. There’s no limit to how you can structure transactions, communicate with your customers, and otherwise effect collections.

Third Party Outsourcing.

As described above, using a third party to provide collections has many advantages. Collection agencies are resourceful when it comes to particularly slippery customers, but their services can be expensive. Many wholesalers prefer to use factoring, since the “bang for your buck” is more substantial. Factors typically buy invoices from you at 80% of their face value, collect from your customers, and then pay you the remainder of your invoices’ value, less factoring fees (typically 1-3% of the full amount). So, for a relatively low cost, you receive your funds immediately and your factor takes full responsibility for your collections process.


If you’re new to this, it may take you some time to find your own approach. Always remember to be friendly, but firm. As mentioned, these interactions can be uncomfortable, but you can make the best of it in how you choose to frame and approach it. The more you systemize your collections process, the easier future interactions will be for you and your customers.

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Boosting Sales – Tips to Grow Your Wholesale Business

Sadie Keljikian, Express Trade Capital

For wholesalers, selling to retail customers can be a complex and strenuous process. Unlike consumers, retailers need to be convinced not only of quality and usefulness, but of the uniqueness and longevity of a product in order to feel compelled to devote precious floor or shelf space to it.

Here are some tips to help you boost sales and grow your business.

Monitor your business practices.

Before you can think about adopting dynamic sales practices, you need to make sure that your
business and its reputation doesn’t raise any red flags for potential customers.

  • Create a solid web presence.

When you initiate contact with a retailer, they will usually search for your business online immediately and go from there. Make sure your website looks professional. If you are unable to afford upscale web design, keep things simple and straightforward. Offer as much exciting information about your business as possible (without giving up trade secrets of course). If you are honest and don’t oversell yourself or your product, you will engender confidence and trust right off the bat. Solicit feedback on your site from employees and clients, and constantly strive to produce and publish good, relevant content on your site while continuing to adapt and improve it.

If there are any poor reviews or scandalous details (i.e. a lawsuit) to be found in searching for your company online, be honest with your prospects when it comes up. By controlling how you choose to frame the story and admitting places where you may have erred and have now improved, you can enhance your credibility with prospective client. Discussing how you previously confronted a difficult situation with a client offers an opportunity to demonstrate the character and integrity of your company.

  • Update and Monitor Social Media

If you choose to use social media as a marketing platform, be very careful. Social media is a rich resource, but must be handled carefully so that it doesn’t become more of a hindrance than a help. To the extent possible (and practical), do not allow access to your company’s social media accounts to anyone untrustworthy and be sure that the content remains consistently professional and relevant to your business. You should limit or completely avoid silly or irrelevant photos and shared links and monitor copy frequently for any potentially offensive or inappropriate phrasing.

  • Manage all interactions with prospective clients.

Everything that applies to your business’s web presence can be applied to any in-person contact in which you or your colleagues engage. Be friendly, informative and honest about your business and how it operates. Make sure any sales staff are not only good at selling, but knowledgeable, personable and socially apt enough to lead pleasant and helpful interactions with all prospects. Find a proper balance between driving your sales force and allowing for individual styles and tactics from different team members. If your incentive structure is sound, sales people will be motivated to do their best and will naturally use all their strengths and capacity to get the job done.

Generate leads.

Building your customer base requires patience and focus. Before you can sell to new customers, you need to identify potential customers by casting a wide net. Then, narrow down your market and develop a good rapport with those who show significant interest. Here are a few ways to find leads:

  • Research competitors.

This is step one in the sale process. If you aren’t sure how best to sell your product, it’s a great idea to look at the sales and advertising techniques of your top competitors. See what their websites look like, find out what networking events they attend, and look at as many marketing materials for your industry as possible. If you research a variety of competitors, chances are you’ll find a combination of tactics perfectly suited to you and your business.

  • Attend trade shows.

One of the best ways to find potential retail customers is to attend a trade show. A lot of businesses are inclined to devote all, or the vast majority of their resources to their web presence. While a good website and digital marketing campaign are important, they are not the be-all, end-all of sales. Boots on the ground and hustle might be old school but they’re far from obsolete. Until the machines take over, direct human interactions are still our primary mode of communication and the cornerstone of any good sales strategy. Never underestimate the power of pounding the pavement in an age when more and more people like to meet (and hide behind) the safety and ambiguity of the internet.

Trade shows are beneficial for a number of reasons. First, you will meet a huge number of potential customers in person, allowing you to show the personal, friendly side of your business to a larger pool of retailers than you would generally be able to access. Second, it is an excellent opportunity for you to flex your sales skills and improve your pitch, which prepares you for cold calls and other sales situations.

Exhibiting at a trade show is expensive. Between the exhibitor fees, promotional materials, and travel costs, the total price can add up. However, if you present yourself professionally, get buyers excited about your product, and follow up with interested parties diligently, the benefits will vastly outweigh the costs. In the beginning, you’re just building your database and getting your feet wet while getting a better sense of the market. Don’t expect miracles – this is a marathon, not a sprint, so be patient and don’t be discouraged if substantial sales don’t materialize right away.  It takes persistence, hustle, and grit so stay on top of your contacts, listen to them, and use those insights to improve and refine your product and your pitch.

  • Make phone calls.

Depending on your product, you may find that cold calling is a good resource for generating clients. If that is the case, it is vital that you keep your call volume as high as possible. Obviously, cold calling is, like any aggressive sales approach, a gamble. So, don’t be discouraged if only a small percentage of your cold calls actually lead to sales. This is why high volumes are so important to the success of a phone campaign.

There are many ways to obtain suitable calling lists. You can buy lists from sellers who provide contact information of c-level executives. Many sellers offer their contact information online. You can develop contacts with lead generation websites that specialize in sourcing deals. The best call lists, however, are generated when you do the research yourself or exchange cards or information in person. Such leads are technically “warm leads” that require “warm calls.” If you have had some prior contact or have a reason to call aside from having bought the contact from a list vendor, your chances of making a connection (and sale) improve substantially. Try all methods and see which ones work best for you.

  • Use LinkedIn.

Another way to develop leads is to use a site like LinkedIn. Unlike other social media platforms, LinkedIn organizes users by industry, position, and location. This means that it can be used to both generate leads and pursue existing prospects. Although LinkedIn is currently the largest network of its kind for professionals, there are others that may be worth considering as well, so do your research and find the best platform for your field.

Keep in touch.

Once you’ve generated some leads, make sure you keep in touch with them. Chances are, they’ve got several vendors vying for their business, particularly if you met them at a trade show. Frequency of contact is a balancing act. You want to check in regularly so that your prospect doesn’t forget you or your products, but you don’t want to contact them so frequently that you appear desperate and aggravate them. Use your judgement and do your best to maintain a presence on their radar without becoming an annoyance.

Here are a few tips to optimize your ongoing contact with prospects:

  • Target the prospects you pursue carefully.

The fact of the matter is, a lot of the prospects you find will not be interested in your product. Whatever the reason, this means that you should be sensitive to the level of interest a prospect will show you and choose the prospects you pursue with care. If you meet the person at a trade show, gauge their reaction as you speak to them. Get a sense of their business: is your product a good fit for them? Will you fill a niche that is otherwise unoccupied? If not, are you offering a noticeably improved version of a product they already offer? Does the buyer show enthusiasm for your product(s)?

Once you’ve considered all of these factors, adapt your behavior in pursuing the prospect accordingly.  Find what they’re looking for and see how you and your product can help them achieve their aims.   If you’re not sure about their level of interest, reach out to check in occasionally and don’t be afraid to simply ask. Ask for feedback on your process so you can improve. Assure your prospects that you want to help them, not bother them.

  • Map out and streamline your sales process.

Once you’ve figured out how to navigate your relationship with the prospect, create a game plan for your ongoing contact with them and stick to it. Create small, attainable goals and set deadlines to ensure that you don’t waste too much time on any one prospect, nor let any fall by the wayside.

As you keep in contact, it is also a good idea to create a list of bullet points before you have a phone call. That way, you’ll avoid getting sidetracked even if the prospect has questions that may not relate to your planned discussion.

  • Be appreciative.

As you keep in contact, be appreciative. Buyers usually have to thoroughly research every potential vendor and run logistical and budgetary concerns by their superiors. In other words, if they keep in touch and plan to become a customer, you should understand that it may take some time and thank them for whatever time they are able to devote to your pitch. It’s also a good idea to stay positive. People (including buyers) generally respond better to people who are friendly and flexible. Plus, if you adopt a negative mindset, you will quickly get discouraged when buyers are unresponsive or don’t immediately give the responses you want.

  • Believe in your product.

You are the lens through which the prospect sees both the business and the product. When the person making the sale genuinely believes in what they are selling, not only is the prospect more interested in the product, they are more interested in doing business with a that person. individual touches like this may seem fleeting and inconsequential, but they can mean the difference between a dud and a sale.


Ultimately, experience will inform your sales techniques and some trial and error is necessary to find your best methods. Stay informed, watch trends in your industry, and don’t be afraid to cast a wide net from time to time. Keep going and eventually, your efforts will be handsomely rewarded.

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Selling on Open Terms

Sadie Keljikian, Express Trade Capital

When it comes to trade, wholesalers often have a considerable number of potential issues to confront. They need to account for manufacturing and shipping costs, logistical concerns, control the quality of their products, maintain good relationships with their customers, and ensure that they receive payment for every invoice. When selling goods to retailers, one of the more complex negotiations surrounds how and when the customer will pay, or the agreed payment terms.

Depending on the vendor and the customer, they will come to one of a variety of agreements. Generally, when the customer has reasonably good credit and/or a solid relationship with the vendor, they will prefer to use open terms. Open terms on an invoice mean that the customer has a particular time frame in which to pay, beginning on the invoice date. Some common terms are Net 7 (meaning payment is due 7 days from the invoice date), Net 10, Net 30 and so on up to Net 90.

An account with open payment terms is ideal for the customer, since they don’t have to pay until after they receive the order. This means that they can place large inventory orders regardless of cash flow and pay when they receive the order as expected. For vendors, however, selling on open terms can be a double-edged sword.

On the favorable side, selling on open terms can offer a competitive edge to vendors who find themselves struggling to gain new business, since most customers prefer to have an open account with their vendors. In addition, when customers buy on open terms, they tend to place larger orders than they would under COD (cash on delivery) or similar terms. If customers don’t pay on time, they will accrue interest and/or late fees on the past-due invoices, which means more revenue for the vendor when they eventually receive payment.

Less favorably, sales on open terms can be risky when made to customers who aren’t as trustworthy. There is no guarantee that the vendor receive payment on time or even reasonably close to the due date. If too many customers are delinquent in their payments for too long, the effect on the vendor’s revenue can be devastating. This is why many vendors who sell on open terms choose to factor their invoices, to provide a layer of protection for themselves and their open invoices.

If you decide to sell on open terms and are concerned that your customers may not pay on time or at all, factoring is an excellent solution. Non-recourse factoring protects businesses if their customers declare bankruptcy or are otherwise rendered insolvent. In non-recourse factoring agreements, the factor absorbs the risk of all invoices they purchase from you.

Open payment terms can be tricky to negotiate at first, but are an excellent option, provided that the right systems are in place. Vendors must keep track of their cash flow, whether that means carefully timing orders to ensure that payments supplement any deficiencies or, as mentioned, factoring your receivables. Overall, open accounts create a system that allows vendors to expand their client base immensely and keeps customers happy by allowing them ample time to pay.


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