Invoice Factoring Helps Bridge the Cash Cycle Gap for Consumer Electronics Wholesalers
Consumer electronics is an industry that heavily requires the services of invoice factoring. US consumer electronics are primarily manufactured overseas and international manufacturers require upfront payment for their services, which is quite costly. After paying a lot of money upfront to manufacturers, consumer electronic wholesalers must wait for a long time to receive the inventory. Once they receive the inventory, they sell it to retailers but would then have to wait a few months before they can collect invoice payments from them.
Retailers may delay their invoice payments, an issue that is further exacerbated due to the COVID-19 pandemic. Unlike manufacturers, who have a high profit margin from being the sole producers of their goods, consumer electronic wholesalers have a low profit margin. So, given these conditions, how can consumer electronics wholesalers sustain their payrolls without crippling themselves?
The answer: invoice factoring.
By selling their outstanding invoices to a factoring company, a consumer electronics wholesaler can receive advance payments in a matter of days instead of months. The factoring company is subsequently responsible for the invoice collection, saving the consumer electronics wholesaler both time and money that would have been spent on collection efforts. With invoice factoring, consumer electronic wholesalers will have adequate working capital that can be used to maintain their daily operations. Consumer electronics wholesalers can also obtain invoice factoring services without any hassle, as factoring companies focus primarily on the credit quality of the customers rather than personal credit history.
Invoice factoring is a great alternative financing resource for consumer electronics wholesaler, especially in the COVID-19 economy. Accel Business Funding has worked extensively with consumer electronics wholesalers and can provide invoice factoring services customized to meet the needs of your company.