What has arguably been one of the hardest times for businesses over the last year, seems to be finally drawing to a close… And businesses couldn’t be more ready!
Many of the conversations I have been having with businesses, especially since the announcement last week, have revolved around how they are getting ready for the grand re-opening of the UK economy, and whether or not they’ll be granting trade credit to their customers.
Trade Credit has been the cornerstone of B2B transactions for the last 300 years, but with new ways of doing business and the current risky climate, many B2B merchants are finding that they are not willing to (or can’t!) offer the terms that they used to. Which makes sense, because insolvencies are expected to increase sharply following an artificial low.
Government schemes, such as BBLS and CBILS, have kept insolvencies at bay in 2020. In fact, there was even a counter-intuitive 34% drop in insolvencies in 2020 compared with 2019! However, the truth is that many businesses are actually coming out the other end of the crisis weaker than before, and oftentimes burdened by debt. In other words, whilst some companies are truly ready to bounce back, there are also many zombies on the high street. So it's understandable that suppliers are hesitant to offer trade credit.
This reluctance to offer credit terms tied with limited cash reserves could leave many businesses, in particular B2C retailers, struggling to secure the stock they need to recover from the impact of the pandemic. This double-edged sword is bad for both the merchants and the retailers, leading to fewer sales for all involved!
So, how can B2B merchants continue to generate the sales they need, by continuing to offer trade credit to retailers, without the risk of being left holding the “empty bag”?
Hokodo’s new technology, Trade Credit as a Service, allows B2B merchants to grant instant trade credit, even on a customer’s first transaction, whilst also protecting those invoices against the risk of non-payment. Hokodo can also pay merchants as soon as the order has been dispatched, so while your customer gets the benefit of trade credit, there's no need to wait for payment.
Our easy-to-deploy solution fits seamlessly into existing online checkout processes, giving retailers instant access to the trade credit they need, and B2B merchants a much-needed boost in sales. The solution also easily slots into offline sales processes, giving sales agents real-time decisions on credit options for clients. Where our technology has been deployed, we have seen a 57% increase in order frequency, along with significant increases in average order value.
The months ahead are finally full of opportunities for merchants and retailers alike, it’s time we put ourselves in the best position possible to take advantage of it. Find out more here.
Find out more here.
Let's speak soon.