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Controlling Vendor Costs is a Key Factor in Growth of Consumer Electronics Companies

With recent research indicating the global consumer electronics market is expected to reach almost $1.8 billion by 2024, companies within the industry have the potential to reap the rewards of that growth, as long as they have the tools in place to support their financial stability. From smartphones to smart TVs, from digital cameras to desktops, whatever the consumer electronics product, vendor costs can have a significant impact on company growth. Taking steps to control vendor costs can be a key factor in day-to-day management and long-term growth.

Reducing vendor costs for consumer electronics companies

Managing vendor relationships is a common challenge for consumer electronics companies. Negotiating with multiple vendors to meet operational needs can have a negative impact on efficiency and stand in the way of developing key partner relationships. Working with one experienced team that has the expertise to provide such services as accounts receivable factoring and supply chain finance is one way to minimize costs.

Understanding consumer electronics factoring

Accounts receivable factoring is a financial tool that can help reduce vendor costs while providing consumer electronics companies with the peace of mind that accompanies being paid for credit approved and undisputed invoices. Factoring for consumer electronics companies, in general, works this way:

  • The factor advises whether it can credit-approve orders from your customer.
  • You sell consumer electronics to your customer.
  • You sell your receivables due from your customer to the factor.
  • The factor collects payments directly from the customer and pays your company for the receivables.

Supply chain finance (SCF) services, meanwhile, allow consumer electronics companies to optimize working capital by extending payment terms while at the same time providing resources to use on-demand to pay suppliers. Benefits include: 

  • Extended payment terms
  • Improved days of payable outstanding (DPO)
  • Lower purchase prices
  • Reduced supplier risk 

The result is a win-win, with risk minimized across the supply chain.

Streamlining vendor costs

Accounts receivable factoring and SCF let consumer technology companies increase working capital to run their businesses with peace of mind, but these are just two of the options a trusted partner can offer to help consumer technology companies streamline costs. Others include:

  • Working capital financing
  • Credit protection
  • Accounts receivable management
  • Bulk purchase of accounts receivable
  • Receivable exposure management
  • Export factoring

Helping consumer electronics companies reach their goals

At CIT, we have experience providing solutions for consumer electronics companies as a leading provider of accounts receivable management and financing services. With more than 100 years of expertise, we devote the time to help our clients make their goals a reality. As a result, clients of many sizes and specialties look to us to help reduce vendor costs. Leaving factoring and finance issues to CIT, they are able to focus on their strengths: delivering the cutting-edge electronic home, gaming and office products today’s consumers demand.

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