Supply Chain Finance for the Holiday Shopping Season
The holidays are upon us, which means shoppers are at the ready to nab presents for their circle of special ones. This year, however, supply chain challenges—from production shortages to shipping delays—have made gift-giving a bit trickier for consumers as companies race to fill their shelves and complete deliveries on time. Businesses, feeling the pressure of the holiday surge while facing issues surrounding orders, have had to strategize accordingly, including stocking up on inventory in advance of the busy season.
Tradewind Finance, a provider of supply chain finance solutions designed to boost cash flow where it is needed along the value chain, from suppliers to retailers, can help businesses meet higher seasonal demand this holiday and avoid the bottlenecks in operations brought on by the pandemic.
Challenges this Winter Shopping Season
The winter holiday shopping season (think Black Friday, Hanukkah, Christmas, etc.) is the busiest shopping and delivery season on the calendar. It is the time of year when demand is at its peak and production and delivery ramp up.
Any high-demand period faces the issue of avoiding “overheating.” This occurs when demand soars, but supply cannot match it, causing product values (“costs”) to become inflated (i.e., “inflation”). Even if supply can be increased to meet demand, businesses still face the prospect of order fulfillment. This involves getting products to customers on schedule, whether it's in-person at stores, or via shipments from online shopping.
Order fulfillment during the holidays is usually met by increasing labor power for order processing and delivery. Couriers like UPS and USPS must rise to the challenge of meeting peak shipment demands during this time of year.
One major fallout from the COVID pandemic is a shortage of both labor power to package and deliver products, as well as a shortage in transport containers to move products. These delivery challenges will only become exacerbated by the swift uptick in purchasing during the winter shopping season. Many consumers have started their shopping earlier this year, but major delays are still expected, both on the supplier/retailer side and the consumer side.
Supply Chain Finance for Peak Shopping Season
Supply chain finance companies such as Tradewind can provide a remedy for the challenges of this period of rapid and intense uptick in demand. By working with a financial partner who advances them cash on their receivables via supply chain finance, suppliers can receive early payment for their products so they can continue to manufacture goods and run their outfit. Retailers, in turn, can preserve their capital and allocate it for their business goals rather than draining it on immediate payment to their vendors.
Both parties, with cash on hand, can operate smoothly and meet the demands of the season: importers can continue to secure and even increase their inventory, and exporters can maintain or boost their funding for production and shipment.
Supply chain finance can support businesses as they tackle the busy holiday shopping season. It makes funding nearly immediately available to exporters and can increase the purchasing capacity of importers, ultimately improving consumers’ experience as they check off their gift lists. Learn more about Tradewind Finance and our supply chain financing options at www.tradewindfinance.com.