Page 25 – Kickfurther

How your business can benefit from outsourcing fulfillment to a 3PL

Posted on October 6, 2022 by Kaylyn Perry

Fulfillment is one of the most challenging parts of running a small business. As your business starts to scale, trying to ‘do it on your own’ could be to your business’s detriment. Outsourcing your fulfillment needs to a third-party logistics service (3PL) can save time and resources as you expand.

What are fulfillment services?

A fulfillment service is a third party logistics company that stores, preps, and ships your orders for you. When you are balancing a growing team, working in small spaces, or feeling overwhelmed, investing in fulfillment services may be a great option. Once items are received, critical business decisions are driven by inventory status and availability. Staying on top of this can be difficult as business owners are often focused more on growth than the intricacies of a logistics flow. 3PL services offer inventory tracking and its progress, while also updating stock constantly and keeping accuracy at the forefront. Challenges come when running a high growth business, so it may be beneficial to offload your fulfillment challenges to a 3PL service.

This strategic and necessary upgrade can result in massive gains for any size business. Fulfillment services like Saltbox work hard to manage receiving, inventory storage, processing, and most importantly shipping.

What to consider when choosing a 3PL

Not all 3PL’s are created equal. From hidden costs for onboarding and membership to pricing based on square footage and inventory, many 3PL services prioritize large ecommerce companies over growing small businesses. Finding the right 3PL service that offers the most support for your business at the most affordable cost is key to growing your small company into a booming enterprise.

Customer Success

Fulfillment requires working hand-in-hand with a dedicated team that you can trust with your inventory. The right partner makes this easy and provides a personalized experience dedicated to your business success. Saltbox is a premier 3PL partner that guarantees customer satisfaction and communicates with appropriate stakeholders as needed. Their services allow you to focus on growth while they focus on securing your logistics and order fulfillment.

Pricing

Choose a 3PL that has transparent pricing structures. Hidden fees, and order minimums should not stall you from growing your business. When choosing a 3PL try to consider pricing based on storage rates, packing, shipping, and hourly rates designed for special projects. Pricing should not take you for surprise, and all costs should be reasonable and predictable on a monthly basis.

Proximity

Proximity is a critical component when choosing the right partner. Their location should align with your current business structure. Our recommendation is to find fulfillment services close to major cities, your manufacturer or distributors, and last mile delivery to the local area. A bonus is if you can be close to your fulfillment team to keep your business hands on and allow you to check in on your own inventory.

Multi-Channel Reach

Don’t let multiple platforms stop you from expanding your business potential. With fulfillment support, you will be able to reach new audiences. Direct to consumer orders can be supported as well and land your business ahead of the curve. 3PLs can support your business with platforms like Etsy and Shopify. With support across multiple channels, the right 3PL service will make managing your logistics simple.

The Bottom Line

Not all 3PL providers are right for your business. It is critical to do sufficient research when looking for the right partner to help you achieve your business goals. Choosing the right 3PL is not the work of a day, and you should feel empowered to make informed decisions after your search. Ask yourself where your business is right now, but more importantly understand where it is headed. Fulfillment services can allow you to focus more on growing your business and less on logistic challenges with a 3PL partner.

If you feel confident about fulfillment services, consider expanding with a 3PL that offers a micro-fulfillment center within a co-warehousing facility. At Saltbox, you can work alongside your micro-fulfillment center in office and warehouse space. Additionally, as your orders and business grow and scale, Saltbox’s solutions will grow with you. The Saltbox difference is having a partner that operates as an extension of your team that understands the challenges of various size operations. Saltbox can help alleviate stress related to logistics services making it easier to run the most important parts of your business.

Saltbox serves as an invaluable resource for small businesses nationally. Saltbox offers key fulfillment services and can benefit your growing business by focusing on personalized needs that many 3PL services overlook. When choosing a 3PL, make sure they are an extension of your business and can provide you with personalized solutions and offerings. No need to build your business on your own. Get started with Saltbox Fulfillment and let’s grow your business together.

Why you should consider non-dilutive funding

Posted on October 3, 2022 by Kaylyn Perry

Small businesses have several options when it comes to securing working capital. From traditional bank financing and inventory financing to crowdfunding and grants, there is no shortage of resources for growing businesses to take advantage of. But, funding remains a constant challenge. Raising money through equity financing through venture capitalists or angel investors is the most common route, but it comes at the cost of diluting ownership. Fortunately, CPG brands have another option: non-dilutive funding.

Non-dilutive funding is a funding option that does not require you to give up ownership in your company. In this blog post, we’ll explore the benefits of non-dilutive funding for CPG brands.

What is non-dilutive funding?

Non-dilutive funding refers to any form of investment that doesn’t require the surrender of any portion of ownership of your company. It does not require equity and the investor does not gain any ownership stakes. Non-dilutive funding is most often used in the startup stages of a new business, although it can be used at any time. Forms of non-dilutive funding include:

Loans
Grants
Tax credits
Crowdfunding
Inventory financing
Revenue-based financing

On the other hand, dilutive funding (also known as equity financing) refers to any type of funding where the business must sacrifice a portion of its ownership in order to secure capital.

Benefits of non-dilutive funding for small businesses

Non-dilutive funding is a great funding option for CPG brands looking to grow and expand without giving up ownership or taking on significant risk.

Maintain ownership

Non-dilutive funding is an attractive option for CPG brands because it allows them to maintain ownership of the company. This is a significant advantage over equity financing, which often requires entrepreneurs to give up a portion of their company’s ownership to investors. By keeping more control of your company, you can make decisions that are in the best interest of your brand and not just aimed at increasing shareholder value. This is particularly relevant if you have a long-term vision for your company or want to take a slower and more sustainable approach to growth.

Build credit

Non-dilutive funding can also be a great way to build credit for your business. Whether it’s through a loan or a line of credit, taking on non-dilutive funding can help establish your brand’s creditworthiness with investors, banks, and other lenders. Having solid credit can help you access more significant funding in the future and make it easier to secure additional financing when you need it. This can be particularly crucial when launching new products or expanding your brand.

Expand distribution

If you are a CPG brand looking to expand your distribution, non-dilutive financing can be an attractive option. With non-dilutive funding, you have the resources to secure strategic partnerships and expand your distribution network without having to give up ownership of your company. This can result in a larger customer base and increased sales for your brand.

Reduce risk

Non-dilutive funding can also reduce the risk associated with equity financing. Equity financing leaves entrepreneurs exposed to the risk of dilution, which can significantly reduce the value of their ownership in the company over time. By using non-dilutive funding options like grants, loans, and crowdfunding, you can minimize that risk and preserve your ownership over the long term.

Diversify funding sources

Finally, non-dilutive funding allows you to diversify your funding sources. Relying solely on equity financing can be risky, especially when investors have significant control over the direction of your company. Non-dilutive funding options allow you to bring in funding from a variety of sources and minimize the risk of relying on one investor or a small group of investors.

How do you raise non-dilutive funding?

Unlike dilutive forms of funding, you do not need to strategically place your business in order to attract angel investors or venture capitalists. With non-dilutive funding, you take advantage of the different resources and programs offered by banks, government agencies, and so forth. You may work with investors or backers too but instead of sharing ownership or equity you can offer collateral instead.

Types of non-dilutive financing

There are several different types of non-dilutive financing to consider for your business needs:

Loans: Whether you secure your loan from a bank, credit union, or online lender, small business loans are a great way to access the cash you need to grow your business. Term business loans should not require you to give up ownership or equity, but in some cases, they may require collateral.
Grants: Grants are a popular form of funding that doesn’t have to be paid back. They can be difficult to find, but well worth the effort to apply. Grants may be found through government agencies, non-profits, and other businesses.
Tax Credits: Businesses can take advantage of the many available tax credits to secure working capital for their business come tax season, without the need to surrender any ownership or control.
Crowdfunding: Platforms like Kickstarter and Indiegogo offer new businesses a way to obtain funds via small contributions from many different people or organizations. Crowdfunding may have high upfront costs and expose product ideas, which could potentially cause someone to imitate your ideas. If you use crowdfunding, be careful and avoid equity crowdfunding, which is a form of crowdfunding that requires the surrender of a portion of your equity. If you simply need funding for inventory, there are better sources out there, which we’ll cover later on.
Inventory financing: Inventory financing allows companies to maintain stock even without invoices or purchase orders. It often works by funding your inventory on consignment, giving you the flexibility to pay back your balance as you receive sales revenue. Inventory is typically used as collateral. Inventory financing can be obtained by banks. Traditional inventory financing methods can be costly, but luckily there are affordable sources available for inventory funding. Kickfurther is one alternative source for affordable inventory funding.
Revenue-based financing: Revenue-based financing allows business owners access to instantaneous cash advances that are then paid back as a percentage of sales.
Royalty-financing: With this type of funding, business owners receive money from investors in exchange for a percentage of the company’s future revenues. This is often limited to a certain period of time and/or a certain amount and does not require the surrender of any ownership or control.

Identifying Risk associated with Funding

While raising funding is an essential part of a CPG business, not all sources of funding are the same when it comes to the level of risk involved. Understanding the level of risk involved in different areas of your business and how various sources of capital match those risks can help you determine the best funding option for you.

The type of funding you use can have a major impact on your business’s risk profile. Generally, equity or dilutive financing is more risky than debt financing or non-dilutive options. And when it comes to inventory risk, it’s important to match the risk of your capital sources to the risk of the inventory. If you’re holding onto a large amount of inventory, the risk to your business is higher than if you have a low inventory level. In this case, it may be more advantageous to raise debt or non-dilutive capital, as it reduces the overall risk to your business while still providing the funds you need.

Another important factor to consider is the cost of funding. Generally, equity financing is more expensive than debt or non-dilutive options. This is because equity investors often seek a higher rate of return to compensate them for the perceived higher risk involved in equity investments. If you’re a startup or a growing business with a high-risk profile, it can be challenging to attract equity investors without offering them a higher rate of return. In this scenario, it may be more advantageous to explore other sources of capital, such as debt or non-dilutive financing, which can be less expensive and less risky.

How Kickfurther can help

Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.

Why Kickfurther?

No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.

Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.

Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.

Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.

Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. And by funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.

Closing thoughts

The need for funding can arise at any stage of business but is most common in the early stages. Startup and early stages can be the hardest time to get funding, especially while maintaining full ownership of your business. However, if you can get funding for certain parts of your business such as inventory or equipment, you can free up cash flow, thus reducing the need for other financing.

Interested in getting funded on Kickfurther? Create a free business account, complete the online application, review deals, and get funded in as little as minutes!

How to Manage Your Business Amidst High Seasonal Demand

Posted on October 3, 2022 by Kaylyn Perry

Small businesses have many moving pieces they need to manage in order to stay profitable and successful. Retailers who operate product-based businesses have yet another factor to keep in mind; seasonal product demand. Seasonal product demand amongst other techniques can help manage seasonal business demand. Keep reading for our quick guide on how to manage your business through the ups and downs of seasonal demand.

What is seasonal product demand?

Seasonal product demand refers to the fluctuations in consumer demand for a particular product or product category during certain seasons or holidays. All businesses experience sales cycles to some extent, resulting in slow and busy times. Most retailers experience some type of increase in product demand, most commonly at Christmas. Seasonal product demand can have a significant impact on your business. It’s important to track sales data so that you can forecast seasonal demand to better prepare and overcome slowdowns.

How seasonal demand impacts your business

Seasonal demand can impact your business by making it difficult to anticipate fluctuations in your inventory needs. In addition, retailers must prepare for the possibility of increased or decreased staffing needs.

To successfully overcome seasonal demand, businesses need to prepare. One way to do this is by forecasting. If you understand your busy and slow seasons you can hire for seasonal positions, adjust inventory levels, and obtain funding as needed to ensure plenty of working capital. Stocking just the right amount of inventory is key for maximizing profits while keeping cash flow healthy. Understocking can result in product shortages that cut into your potential profits at the most inopportune times. No retail business owner wants to run out of their best-selling product right at the time when demand is at its highest! Not only does this result in the loss of revenue but also can hurt your company’s reputation. In fact, some companies earn their highest revenue during seasonal periods, resulting in their annual numbers moving from the “red” into the “black” (hence the origination of the popular term “Black Friday” to describe the day when many merchants began to turn a profit).

If you’re operating a small business, these seasonal fluctuations can catch you off guard the first few years if you’re not prepared. Be sure to plan ahead for seasonal demand and watch your profits increase.

Examples of seasonal demand

No matter what type of retail business you run, you probably experience at least a few seasonal fluctuations in demand. A few examples of seasonal demand include:

An increase in the demand for greeting cards at Mother’s Day and Father’s Day
An increase in the demand for jewelry or chocolates at Valentine’s Day
An increase in the demand for certain gift items during the month of December
An increase in the demand for scarves and coats in the winter months
An increase in the demand for swimsuits, shorts, and t-shirts in the summer months

Accounting for these increases (and decreases) in consumer demand can help your business become much more successful by planning ahead and avoiding overstocking or understocking your products.

How to manage seasonal product demand

There are a few ways to navigate seasonal product demand, these can include:

Ensure proper product categorization: It’s important for retailers to go through their taxonomy with a fine-tooth comb. Understand which types of products are especially susceptible to fluctuations in product demand, and when you need to increase or decrease your inventory of those products. Taking the time to prepare and adjust your products for seasonality is worth the extra effort to ensure your operations run smoothly all year round. This process is best supported through the use of analytics.
Utilize Analytics: Knowing and understanding your sales data is crucial to identifying your top-selling products and anticipating your business needs. Without a proper overview of key seasonal inventory fluctuations, your company will be operating with several blind spots. The longer you have been in business, the better you will get at spotting trends and patterns. You can utilize software to help you identify seasonal demands.
Follow Broader Market Trends: In addition to your own data, it’s important to look at what’s happening in the overall retail market. Understanding your target consumer and their current needs is key to preparing for seasonal demand. You won’t always be able to rely on what worked last year when new trends are changing the game on a daily basis. Some changes are predictable, and others are only uncovered by keeping up with current trends, so be sure to remain flexible and stay in the know.
Stock up on Necessities: When there are items you know without a shadow of a doubt will be in high demand during certain seasons, be sure to stock up on plenty of these foundational items. For example, if you own a skincare company it would be wise to maintain a large stock of sunscreen beginning in the spring and summer months.
Ensure Proper Communication: Communication across all aspects of your business is key. From how you choose to keep in touch with your consumer base to what information you provide to your manufacturers, suppliers, and other vendors – you’ll want to ensure clear and consistent communication before, after, and during seasonal fluctuations in product demand. For example, by offering discounts to consumers during slow seasons you can generate additional sales. Another example is communicating expected slowdowns to suppliers so they can deliver just the right amount of product.
Invest in Marketing: Marketing is always a good idea. During slow and busy seasons, you should market. During slow seasons you should make an extra effort to stay in front of customers and offer special promotions.
Plan Ahead: Use down times to prepare for the busy season. The time to plan for a rainy day is not when storm clouds are already brewing. Likewise, the time to prepare for Christmas is not the weekend before Thanksgiving. Begin planning, funding, and ordering your products far in advance in order to take the most advantage of seasonal demand. Consider using inventory financing to help plan ahead for these needs and be sure to have a good understanding of the different financing options available to you to help cover any gaps in funding.

Closing thoughts

There are many factors to keep in mind when it comes to managing your business through high seasonal demand. One of the most important aspects to manage is inventory. If you’re a new company it may take you a while to accurately forecast demand. Hang in there until you have enough data to accurately forecast. During busy seasons you’ll need to ramp up inventory, which can consume a lot of cash. Most businesses need inventory funding at some point. Perhaps for your business, the need is right before your busy season. Regardless of the timing, you can access quick and affordable inventory funding at Kickfurther.

How Kickfurther can help

Seasonal demand can take a toll on cash flow. To make sure you have enough inventory stocked and enough free cash flow, you can take advantage of inventory funding. Kickfurther is the world’s first online inventory funding platform that enables companies to access funds that they are unable to acquire through traditional sources. For companies that sell physical products or non-perishable consumables and have revenue between $400k to $15mm over the last 12 months, Kickfurther can help. We connect brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales.

Kickfurther can help startups fund millions of dollars of inventory at costs up to 30% lower than the competition. With more than $150 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours.

Interested in getting funded at Kickfurther? Here are 3 easy steps:

#1. Create a free business account

#2. Complete the online application

#3. Review a potential deal with one of our account reps

#4. Get funded in as little as minutes

Create a free business account at Kickfurther today!

The Basics of Cash Flow Management: Forecasting, Analyzing, and Improving Flow

Posted on September 27, 2022 by Kaylyn Perry

Being an expert at cash flow management takes time. And, it’s often mastered through mistakes. Every business has its own unique qualities so it’s important to thoroughly understand the operations. Cash flow management techniques can vary depending on operations, but you should be confident in the basics. You should also make sure you are working with accurate information. Learning how to manage cash flow is extremely valuable as a business owner or employee. An Intuit study found that 61% of small businesses worldwide struggle with cash flow. While struggling is normal, being unable to pay vendors, loans, and other expenses is not normal. Cash flow issues must be addressed in a proactive manner.

What is cash flow management?

Cash flow management is the process of managing incoming and outgoing, cash and non-cash, flowing in and out of a business. To successfully manage cash flow you will want to know how to analyze transactions and identify opportunities. Essentially, the goal is to optimize the amount of money (or non-money) that you’re working with. You may be wondering how non-cash is part of cash flow management, so let’s take a second to understand. Non-cash items are items on the income statement such as depreciation, deferred income tax, amortization, and so forth. Including these items allows a more accurate view of the financial position of the company. In addition, these items can be used for tax advantages. If you’re in charge of managing cash flow, you’ll need to understand every item involved. Timing will be critical too to ensure that you will have enough cash at all times to cover any expenses. Most small businesses struggle with cash flow challenges. If you’re one of those businesses, dig in and create opportunities to improve financials. Cash flow is never easy, regardless of how much working capital you have.

Why cash flow management is important

Cash flow management is important in businesses, but it’s also important in your personal life too.

A personal life cash flow example is as follows. If your rent is due on the 15th and you get paid on the 20th, this can present a personal cash flow problem. The solution? Acknowledge the dilemma before it’s an issue. Can you push back the due date of your rent? Can you split the payment into two payments?

A business cash flow example is as follows. You need to buy $10,000 of products to sell, but you won’t have enough money until you receive funds from the last batch of products you sold. You can’t let inventory levels get so low that you miss sales, so how will you afford more inventory without the cash? Whether the answer is net-terms or inventory financing, you’ll need to find a solution.

The point here – cash flow management is important to ensure that you have enough funds to cover your bills and expenses while turning a profit at the same time.

How can I manage cash flow effectively?

Managing cash flow effectively starts with implementing processes for operations and collecting information. You must ensure you have the right information and maintain consistency. While you may be in charge of cash flow, you will likely not be the only one involved with activities that impact cash flow. Therefore communicating and following strict processes is important. Let’s take a look at a few ways to manage cash flow effectively.

Determine forecasting objectives: Forecasting is critical for cash flow management. You need to know how much money you need and when you need it. To forecast, make a simple cash flow forecast. This will include four easy steps; determine how far out you want to plan, identify all income, identify all outgoing accounts, and understand your running cash flow on a daily or weekly basis.
Choose your forecasting period: A forecasting period goes back to step one of the simple cash flow forecast. How far out do you want to forecast? The most important part of this objective is only forecasting as far out as you can without causing inaccuracy. Well-established businesses will be able to forecast out farther than startups or new small businesses.
Perform a monthly analysis: Cash flow management will get better with time. It’s important to invest time on a monthly basis to reflect on your forecast versus your actuals. Make adjustments accordingly moving forward.

Advantages of cash flow forecasting

Cash flow forecasting is not an activity that should be optional. The advantages and benefits that forecasting can provide your business are endless. Here are just a few of the advantages that cash flow forecasting can offer:

Plan for big purchases and investments
Maintain a track record of on-time payments
Track overdue payments
Gain accurate insight to organizational earnings
Know financial health at any given moment
Make better business decisions
Avoid waste of resources and money
Allows you to see if spending estimates are accurate
Give investors a clear view of your company’s financial health
Automate forecasting with software
Make it easier to see all of your options
Improve relationship management

Example of cash flow management in business

A simple example of cash flow in a business is a business that sells products to generate income. Revenue from product sales are incoming cash flows. This cash is used to pay employees, cover product costs, and pay for overhead expenses, which are all cash outflow.

In order to keep up with cash outflow, you need to have enough cash coming in at the right times. While you may be planning to receive enough cash to cover outflows, if the timing is off, you’ll have a big problem on your hands. Businesses often solve cash flow timing issues with financing for inventory or a line of credit that they can draw on as needed. Product-based businesses often find much of their cash tied up in products. While products may be selling, income is not received immediately. In addition, you’ll need to tie up the cash again (maybe even before you receive it) in order to keep inventory levels healthy. Inventory financing can be secured through traditional banks and credit unions, but this route is often expensive and hard to qualify for. For these reasons and more, small businesses work with Kickfurther to get funding for inventory.

How Kickfurther can help

Kickfurther is the world’s first online inventory funding platform that enables companies to access funds that they are unable to acquire through traditional sources. For companies that sell physical products or non-perishable consumables and have revenue between $150k to $15mm over the last 12 months, Kickfurther can help. We connect brands to a community of backers who help fund inventory on consignment and give brands flexibility to pay that back as they receive cash from sales. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours. Companies can easily return to Kickfurther for several rounds of funding. In fact, companies that return after a successful round of funding often receive discounts and increased funding the second, third, or fourth time around.

Closing thoughts

The future success of any business relies on cash flow. Even if a business is not for-profit, cash flow still matters. Everything in life and business costs money, so you’ll need to make sure you have the cash you need to keep operations afloat. One way to assist the financial health of your company is to take advantage of inventory funding. By taking stress off cash reserves you can invest in other areas of your company such as marketing and technology that can help you generate more income. If you’re constantly just barely keeping up, it can be hard to grow past where you are. Therefore, it’s worth it to take on the extra responsibility and costs too for inventory funding. Luckily now, you know just where to go for the best inventory funding option.

Improve the financial health of your business. . . apply for inventory funding today!

5 Tips to find a distribution partner

Posted on September 27, 2022 by Kaylyn Perry

Finding the right partners is critical to building any successful business. For product-based businesses who choose to use a distribution partner, there are a few key things to keep in mind.

What is a distribution partner?

A distribution partner is the “go-between” or “middleman” between your products and your customers. They may be a company or an individual that has been given the authority to market, distribute, and even resell products from a business they are partnered with.

A distributor does the legwork for you to get your product out the door. They build and maintain relationships with vendors in your industry, dealing with different retailers and outlets on your behalf.

There are several benefits to using a distributor. The biggest potential benefit is that they may have industry knowledge and credibility, allowing the distribution of your product(s) to result in more sales. In addition, they can help with product shipments and ease some of the burden off your current staff. They can also negotiate contracts for you, freeing up your time for other tasks. Partnering with a distributor allows companies to better handle fast and scalable growth and to stay competitive. Lastly, it gives your company access to new markets and specialized industries.

If you plan to work with a distribution partner, you’ll need to support them by having plenty of inventory to offer. Scaling your business with a distribution partner may call for inventory funding. We’ll cover how to get affordable inventory funding a little later on.

What to look for in a distribution partner

When looking for a distribution partner, you want to find a company or individual that you can trust. They will be handling a large and very important part of your business, so reliability is key.

In addition, you’ll want to look for a distribution partner with some clout in the industry, and a proven track record of sales. They should have solid vendor relationships and the ability to connect you with other opportunities in the industry. They should serve your region and the pricing structure should be one that you can afford. Some distribution partners offer several value-added services such as business development, marketing, and sales support. When choosing a distribution partner, make sure they offer the expertise needed to make strategic business decisions about inventory and product placement.

Top tips on how to find a distribution partner

Choosing a distribution partner is going to depend on your circumstances and current business needs. Here are some tips on how to find a distribution partner that can meet your needs and grow your business.

Determine the need: The first step is to evaluate whether or not there is a real need for a distribution partner in your business operations. Take a look at your goals and whether or not a distributor can help you reach them. Determine whether or not your current manufacturing processes can keep up with the potential increased demand of working with a distributor. Consider if you are ready to introduce more hands between your company and your customer, which could cut into your profit margins. Analyze your current online sales numbers and whether or not there is a need for assistance with getting your product into more retail stores. If online demand is strong, you may not have a need for a distribution partner after all.
Identify target retail stores: Look at your target audience to determine exactly where they shop and would expect to find your product. Once you have determined a few key retailers, find out which product distributors frequently work with them. Leverage this data to work with a distributor who is relevant and known in your chosen industry.
Study the competition: Similarly, taking a look at which distributors your competitors are using is another great way to find a distribution partner who is known throughout the industry. A little bit of research will give you some great insight to work with.
Join trade associations: Trade associations that serve your industry and your area can be a great resource to finding all kinds of partnerships including a distribution partner.
Take advantage of other trade resources: Similarly, subscribing to trade publications and attending trade shows will be a good way to access information about many different product distributors in your industry. Trade magazines often publish lists of various business partners to consider, while trade shows allow you to connect with potential partners face-to-face.

Tips to evaluating distributors

In order to determine whether or not a particular distributor is right for your company and has built up a good reputation in the industry, you will need to do some research to evaluate them.

This includes finding a distributor who uses strategies that align with your business goals, offers the value-added services your business needs, and is competent enough to provide the sales you’d like to see. They should be able to keep pace with the anticipated growth in your target market and should have the capability to handle large amounts of inventory and analytics. Remember, the whole point here is to reach more customers and enter new markets to grow sales. So, be sure they can help you do that. A valuable distribution partner will help you stay competitive.

A few important questions to ask and observe are:

Are they stable?
Do they have a strong sales team?
Will they do any marketing?
How do they handle logistics and inventory?

Next, evaluate their capacity and style. Some businesses desire a smaller distribution partner for more personalized attention. Distributors with fewer partners should be able to give your brand more time and attention, but this may come at a cost.

Get connected with various trade resources that are relevant to your business and begin to ask around about the top distributors in your industry. Many key business relationships can be established simply by word of mouth. Hearing what others have to say about your potential business partners can help you evaluate your options and which one is right for you.

Remember, that your business needs may evolve over time, and it’s important to re-evaluate all of your business partnerships as time goes on and your business grows. The distribution partner that best suits your needs now, may not work for you in the future. Luckily, a choice of distributor is not permanent and can be changed to adapt to changing business needs.

Closing thoughts

A good distribution partnership results in increased sales and revenue, improves product visibility to new audiences, and provides infrastructural support for distribution logistics.

With the right partner, you can take your hands off many aspects of operations and focus your attention where it matters, such as marketing and scaling your business.

With a growing business, you’ll need to stock plenty of products. Afterall, a lack of product can mean missed opportunity. So where do you turn for inventory funding that’s fast and affordable? Kickfurther.

How Kickfurther can help

Maintaining a healthy inventory supply and healthy cash flow is important for all businesses. Product-based businesses can struggle with cash flow since a majority of their money is likely tied up in inventory and receivables. Therefore, they often turn for help with funding for inventory, only to find it’s expensive, hard to qualify for, and time consuming. But, it doesn’t have to be.

Interested in getting funded at Kickfurther? Here are 3 easy steps:

#1. Create a free business account

#2. Complete the online application

#3. Review a potential deal with one of our account reps

#4. Get funded in as little as minutes

Ramp up inventory levels to support distribution partners. . .create a free business account at Kickfurther today!

Inventory Management for Ecommerce Best Practices

Posted on September 20, 2022 by Kaylyn Perry

Product-based businesses have many unique challenges and hurdles to overcome, whether they run a brick-and-mortar retail location or operate entirely online. eCommerce companies have additional struggles when it comes to inventory management, which is often handled at a remote location. Inventory management is at the core of product-based operations. It impacts how fast customers receive orders, how much space you need, how much staff you need, and it can eliminate unnecessary waste. As your business grows, always remember just how important eCommerce inventory management is. Keep reading for tips and best practices for eCommerce inventory management.

What is eCommerce inventory management?

eCommerce inventory management is a method of maintaining inventory that includes the sourcing, storing, shipping and tracking of an online retail company’s product inventory. No matter how an eCommerce business chooses to maintain their inventory, they must consider a variety of factors such as which products to keep in stock, how much product to order, and how often to order more inventory. While these are broad points to consider, you should also consider smaller details such as which products you sell the most of. Can you make these products easier to access? Inventory management is all about making inventory and fulfillment as efficient as possible.

How does an eCommerce business maintain their inventory?

There are a number of ways that an eCommerce business can fund, stock, and maintain their inventory.

eCommerce businesses often use third-party order fulfillment, logistics, or dropshipping companies rather than maintaining their own warehouse and shipping department (which can be expensive).

These methods can save money, eliminate the need for additional staffing, and improve shipping speed and efficiency. However, without the proper inventory management system, businesses can still make costly mistakes when it comes to ordering and maintaining their products in stock.

Biggest challenges related to eCommerce inventory management

There are a few key challenges that eCommerce companies must watch out for when attempting to effectively manage their inventory. Here are a few of the biggest challenges related to inventory management.

Overstocking: Overstocking is a common issue for many eCommerce businesses, especially in the beginning stages of growth. It can be tempting to purchase more inventory than you actually have a demand for, particularly when you are still learning what your customers want and need. However, overstocking can hurt your company’s cash flow, profit margins, and bottom line. Overstocking can also happen as a result of poor inventory management.

Overselling: On the flipside, overselling occurs when you have more incoming orders for a product than you have inventory. Few companies want to have to tell customers that one of their best-selling products is “out of stock” or have to pull the plug on a potential money-maker due to a lack of inventory or poor inventory management.

Lack of visibility within multiple warehouses: Inventory visibility is the ability to view and track your inventory levels in real time. Your customers rely on this information to purchase products based on availability. Without a clear way to monitor inventory, you risk overselling products, which subjects your customers to late shipments and decreases customer satisfaction. Inventory visibility also helps you have access to accurate information about your products in order to identify your best-selling products, calculate customer demand, and identify opportunities to improve your profits. Inventory visibility can especially be a challenge for eCommerce companies who often have to monitor inventory remotely across multiple locations.

Lack of data and insights: Having the right analytics allows business owners to make informed decisions when it comes to keeping up with customer demand and preventing excess inventory. Without this information, many business owners are simply taking a shot in the dark when it comes to ordering and maintaining their inventory levels.

Tips for managing your eCommerce inventory

In order to have a successful eCommerce business, consider the following tips for keeping up with your company’s inventory in the most efficient way.

Forecast future inventory demands: One of the best ways for businesses to calculate future inventory demand is to make projections based on past sales. New and emerging businesses must also take into consideration basic product demand. By accurately projecting demand you can attempt to stock just the right amount of inventory to avoid over or under stocking.

Understand basic product demand: The ability to identify your target customer and most demanded products are essential to successfully managing your eCommerce inventory. Changes in both market conditions and current trends can also have an affect on your need to purchase more inventory. No matter what type of products you sell, the old adage rings true: Everything is about supply and demand.

Prioritize products using ABC analysis: ABC analysis classifies and prioritizes your inventory using 3 categories: (A) high-value products with low sales volume, (B) moderate-value products with moderate sales volume, and (C) low-value products with a high sales volume. Taking the time to use this system will both boost efficiency and save you money. For example, using ABC analysis can help companies understand which products need to be ordered the most often, and which big-ticket items you should avoid overstocking.

Prepare for seasonality: Most businesses experience some fluctuations in demand due to changing seasons. Whether you have a clothing business or carry certain products that increase in demand during the holidays, it’s always important to prepare for seasonal fluctuations. Failure to consider consumer demand for your products can lead to overstocking or overselling.

Automate your inventory management: Automating inventory management is one of the best ways to improve efficiency. While there may be investment involved in automating systems, in the long run it will save you money in terms of mistakes, missed sales, and labor. Without an automated way to monitor and manage your inventory, it’s going to be difficult to scale and grow. Inventory management software can eliminate many of the pain points mentioned above such as overstocking and overselling, lack of inventory visibility, and lack of product insights. Looking for an automation tool? Checkout eComEngine’s ReStockPro.

What is the best strategy for managing your eCommerce inventory?

Most importantly, just have a strategy. Approaching inventory management with no strategy is a recipe for disaster. It may work for a short period, but it will be a dead end for scaling your business.

Whether you use a 3PL (third-party logistics) provider, a dropshipping company, or an order fulfillment warehouse, your product-based company will benefit greatly from maintaining your inventory based on data and insights. Doing so will help you increase your customer satisfaction, sales volume, and profits.

As you work to build an inventory management system for your product-based company, it’s important that your strategy is entirely data-driven. By implementing insights into your eCommerce inventory management system, you will be able to eliminate costly issues such as overstocking, overselling, failure to account for season fluctuations, and more. Instead, you will be able to use consumer analytics to forecast future product demand, maintain accurate inventory levels, and save your company money.

How Kickfurther can help

Funding inventory while trying to grow your business can deplete cash flow quickly. As a business owner, you may be shy to reach out for help or unsure about where to get help. Without giving up ownership or paying high interest rates, there is a solution for affordable inventory funding.

With cash for inventory and an effective inventory management system, you’ll be on the path to achieving an efficient and profitable business.

Closing thoughts

Optimizing your inventory management systems (including cash for inventory) can go a long way towards building a successful product-based business. eCommerce companies need an inventory management process that is quick, efficient, and reliable. In addition to implementing data-driven solutions, forecasting product demand, and preparing for seasonal fluctuations, businesses also need enough inventory.

Kickfurther can help startups and small businesses fund millions of dollars of inventory at costs up to 30% lower than the competition. With more than $100 million in inventory funded to date, Kickfurther can help you get funded within a day or even minutes to hours.

Interested in getting funded on Kickfurther? Create a free business account, complete the online application, review deals, and get funded in as little as minutes!