• CIT Commercial Services

    CIT Commercial Services provides financial solutions to middle market consumer product companies. Our lending, financing, and receivable management services are designed to improve cash flow, reduce operating expenses and mitigate credit risks.

    Fashion Apparel Products & Services

    Key Areas of Focus

    • Apparel  
    • Furniture Footwear  
    • Furniture  
    • Housewares  
    • Consumer Electronics
    • Accessories
    • Home Furnishings 
    • Textiles
    • Toys
    • Hardware
    • Luggage
    • Other Consumer Product Industries 
    • Service Industries
  • Commercial Services Highlights


    The retail industry is going through a form of evolution, maybe even a revolution. In this CIT Executive Spotlight, Marc Heller discusses e-commerce and retail industry trends, and shares his outlook for the rest of 2016. Read E-Commerce Drives Retail Revolution for more insight.


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    Has one of your retailer buyers gone bankrupt? Credit insurance can help salvage some of your loss, but there's a better option.

    "Better to have it and not need it than to need it and not have it." This is your rationale for grabbing an umbrella even on a sunny day before you step out to go to work in the morning, for throwing a portable battery in your bag even when your smartphone is 100 percent charged, and for keeping extra sets of house and car keys in your office desk. It's also the motto of every insurance salesperson who wore you down so that eventually you bought their wares. "Hey," they quip, "you never know!"

    Consumer Electronics 350x252 As a Consumer Electronics (CE) vendor, however, you do know. You know that, after chasing a recalcitrant retailer incessantly, you're never going to see the money from that order you shipped to them six months ago. It could be that usually reliable mom-and-pop store that simply over extended itself. It could be that big national department store that just filed Chapter 11. With the challenges facing the retail environment these days, no business is risk free.

    With today's shrinking margins and increasing pressure to produce new products, being as little as five percent short of your expected revenues can really blow a hole in your budget, leave you scrambling to meet your business's monthly expenses, or prevent you from investing in new product trends.

    To protect against these non-payment inevitabilities, many CE vendors buy "credit insurance." In fact, according to a recent TWICE survey, 32 percent of CE vendors have purchased this insurance and another 37 percent have considered it.

    But just as with any other kind of insurance, you have to pay upfront premiums and meet deductibles-and you only recover 85-90 percent of what you're owed. In addition, because the insurance company will make you jump through all the usual bureaucratic, legal, and paperwork hoops, there's no telling when the insurance check will arrive.

    But there's no reason why you shouldn't get what your receivables are worth.

    A Better Way to Protect Your Receivables

    Consider an alternative: you can get paid without hassle, in a shorter time frame, and receive the invoice amount less a small commission with a product called "credit protection."

    Credit protection has several advantages over most credit insurance products on the market. First, there is no upfront premium-you pay as you go based on the orders submitted for protection. Second, there is no deductible or co-pay-you get paid the invoice amount less a small commission (instead of the 85-90 percent you'd receive with insurance). Finally, with credit protection you will generally get paid faster-usually between 90 and 120 days past due.

    Accounts receivable (AR) management companies that offer credit protection, such as CIT, have decades of experience and credit knowledge about big and small retailers and the overall retail environment. And instead of having to call an insurance company's impersonal 800 number to get assistance, clients of a company like CIT have access to a dedicated client service officer who can discuss credit issues and provide information on prospective new customers.

    The bottom line? Credit protection gives you that "you-know-you'll-need-it-so-you're-glad-you-have-it" assurance against potential losses. And when you need it, you're covered for what you're owed.

    Don't you hate it when reality intrudes on your dreams?

    Your dream as a chief executive of a consumer technology vendor is to create really cool, cutting-edge products that are striking in their technology, function, ergonomics, design and value-products that will improve the digital lives of your customers and keep them coming back for more. 

    Consumer Electronics 350x252 Instead of living this dream, however, you're faced with the banal daily reality of business. Rather than concentrating on creating "the next big thing," you're out there fighting to build and maintain your business. Your time and resources are monopolized by the mundane day-to-day, dealing with foreign factories, warehousing, inventory and distributors, collecting receivables, maintaining cash flow, hiring support personnel, meeting daily expenses, funding growth, and increasing profits. You treasure the few moments you get with the product designers and engineers.

    Many Consumer Electronics (CE) companies  have cleverly minimized operational overhead for their companies-and their executives' own daily headaches-by outsourcing. For instance, many CE companies outsource their payroll, their inventory and warehousing, their advertising and public relations.

    But for some reason, most of these same companies continue to handle their accounts receivable and collections in-house. This means they have to hire a credit manager, maybe multiple credit managers, and collections staff, as they happily add to the number of retailers to whom they sell. These hires, plus the additional costs of benefits and office space, increase fixed costs and overhead and also add to operational headaches if things don't work out personnel-wise. 

    It's understandable that you want to manage these receivables yourself. You make the product-you want to collect the money. The desire to complete this basic business transaction is a visceral one, dating back to that first nickel you earned at your first lemonade stand or that first payment you received from a neighbor for raking their leaves or shoveling their snow. Managing your accounts receivable gives you the ultimate sense of control over your business.

    But this is another case of reality intruding on the dream. Even the most efficiently run in-house accounts receivable operation can't get all your customers to pay you the way your neighbors did. Company executives find themselves spending inordinate amounts of time and energy resolving payment issues-discrepancies between what the P.O. stipulated and what was actually delivered, disputes over damaged goods, late deliveries, retailers' financial problems, and even plain old-fashioned stalling-often by large retailers who use their size to pressure smaller vendors into sending them more product before paying for what they've already received.

    All of this accounts receivable uncertainty stretches out already elongated cash conversion cycles to the breaking point, making it tough for companies to meet their daily operational responsibilities, much less finance new product development and manufacturing so they can continue to grow.

    Considering all these headaches, why not outsource your accounts receivable operation and let someone else handle the collections and the headaches while simultaneously reducing your operational overhead? 

    A firm that specializes in accounts receivable management and collections can manage these operations more efficiently than any in-house operation, just as a 3PL provider can better handle your inventory and warehousing and a payroll company can better manage your payroll. Such firms  are familiar with most accounting systems that exist as well as most varieties of payment methods and situations.

    In short, outsourcing your accounts receivable management is a win for you giving you more time to focus on your dream of developing and selling cutting-edge products.

    Click here to see more information on consumer electronics industry accounts receivable outsourcing.
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