What makes a deal go from good to great?
Learn from our experience with the next educational case study in our series.
Next up, a fashion house client with a $1 million facility.
- Why this was a good deal
- Why we took this client on
- What issues ‘bubbled up’
- What we are on the lookout for in trade finance transactions
By the end of this series you will have an insight into what we have learned about importing.
You will be armed with information we have obtained from the field.
Watch the video and/or read the transcript below
For an appointment with a Product Specialist call the office on 1300 652 158
Julia: Hi everyone, Julia from AR Cash Flow here. I am back with Daniel, and we’re going to discuss another one of our real deals. Today we’re going to be talking about a fashion client we had with a $1 million facility. So Daniel, why don’t you start with telling everyone why we decided to take on this deal in the first place.
Daniel: We were really to take on this deal because they had a really good product range, very well-known brands, lots of stars wearing their products. Second of all, they had a good margin. The margin was reasonably good considering what they were doing. They were designing the product and then having a contract manufactured oversees. Thirdly, great spread of customers, both locally and internationally. So there was no issue there. More than anything else, everything was manufactured to order. So it was all forward sold according to the next season or whatever they do in the fashion industry.
Daniel: But, yes there was a little bit of a but. There were a couple of issues as there are with most accounts. But there was one major issue, which I want to point out in this case study, and that was that when we went to pick up the stock or pay for the stock with the manufacturer, they were not prepared to release the stock to us because the client still owed them money from other orders. So the takeaway here is that these days, or even in those days when we did that transaction, we like to make sure that when we’re going to pay for those goods, we’re going to get them So we either need to do it by letter of credit, subject to inspections, or we like to do it by TT with an undertaking from the manufacturer that they’re going to release those goods that we’re paying for.
Julia: Cool. That’s a good lesson to be learned.
Daniel: It was. Well, we didn’t really learn the lesson. I mean, we picked it up as we always do. But that’s just the takeaway.
Julia: Yeah, great. Well, that’s a great takeaway.
Daniel: Thank you.
Julia: Thanks Daniel, and thanks for watching guys. Don’t forget to call the office to secure your appointment with a product specialist on the 1300 number. Thanks guys.
Daniel: Thank you.