Tips to optimise your business’ cash flow

Priscilla Jokhoo, Business Services Director at the Fédération Française du Prêt à Porter Féminin, who has organised the Paris Traffic fashion trade fair for the last three years, began by saying, "Fashion seasonality leads to very long cycles: between the time you create a garment and the time it brings you your first euro - about 18 months - you will spend your time writing cheques!"

Priscilla Jokhoo assists around a hundred brands a year on a daily basis, at each stage of their economic development. Her verdict is clear: "Most failures are not due to a bad product or bad positioning, but occur for two reasons: lack of structuring, and/or too rapid growth. Remember that this is impossible: you can only self-fund".

Anticipate your working capital requirements

Cash flow structure varies according to the stages of a brand's development. This principle shows, for example, that accounts payable are relatively more important for a young company.

"When you start your business, you will have leverage on accounts receivable, but little leverage on accounts payable. Then, when the company is over three years old and can prove its financial health, it can negotiate with its suppliers, which will reduce its liabilities. But your B2B customers will ask you for payment terms", explained Aline Abeya, France & Benelux Sales Manager at Webhelp Payment Services.

As a result, cash flow levels vary greatly from one stage to another and may decrease sharply, putting the company in difficulty. Anticipation is therefore essential!

Watch your credit ratings

"Your credit ratings are crucial over the entire life of your business. They are issued by the main credit insurers and rating agencies that analyse corporate balance sheets and are connected to national sources of banking incidents and failures. All suppliers throughout the world can access at least one of these sources that gives you a credit rating. You must also make your business social security and VAT payments without delay because they affect your credit ratings", Aline Abeya recommended.

Another recommendation: send your first balance sheet to the three main credit insurers: Euler Hermes, Atradius and Coface.

"You must communicate with them at every stage of your business life. If you have had to cope with a difficult situation, you must explain the reaons and the solutions adopted," explained Aline Abeya.

What is the advantage of a good credit rating? It gives you leverage to negotiate with your national and international suppliers. For example, you can try to find a contract-based solution over several seasons: your supplier may then be able to grant you discounts.

Leverage best practices with your customers

Several recommendations involving customers will avoid unpaid or late payments:

  • use a specialist lawyer to draw up solid General Terms and Conditions of Sale (GTCS)
  • insist on signed Purchase Orders, without exception!
  • ensure that invoices are properly drawn up in accordance with the standards and practices of the countries concerned
  • issue an invoice upon delivery
  • request payments before delivery if you are a young company
  • carry out quality control prior to delivery.

And Priscilla Jokhoo added: "In many situations, I have found that certain customers have exploited loopholes in poorly drafted GTCS! You should also pay close attention to your customers' General Conditions of Purchase (GCP), for example, with respect to returning unsold items".

Use leverage to improve cash flow

Positive leverage effects on your cash flow: in the case of a first order, you should not hesitate to require a deposit payment, usually 30%.

"Your customer can very well understand that you expect him to make a real commitment to your brand, and not just an order "to see how it goes", Aline Abeya pointed out.

Also note the possibility of granting a 0.5 to 3% cash payment discount.

Webhelp Payment Services manages the accounts receivable as soon as the order is placed. In practice, once you have made a delivery, it is potentially too late, as the payment method or time may not have been appropriate to your customer's situation.

"Webhelp Payment Services gives you prior recommendations about orders with respect to the country where your customer is located: this is very important because it reduces the risks of non-payment at the order stage. Webhelp Payment Services' assistance extends to the collection of multi-country and multi-currency funds", said Aline ABEYA.

On the strength of its experience in the textile market, Webhelp Payment Services has entered into partnerships with financial institutions that rely on its wholesale management services to help brands source and finance their sales.

> To receive the pdf of the "Cash is king" presentation at the 2018 Traffic fashion trade fair, do not hesitate to ask Aline Abeya.

 

 


The Summer of B2B Marketplaces

Following our publication last year of ” The Spring of B2B Marketplaces “: it is time to look back and to answer these questions: has there been some movement in the market?
Have B2B players evolved in their marketplace business models? Is launching a new market observatory worthwhile? The answers to all questions is “yes”.
Lots of things have happened over the past year. While there are still four broad B2B marketplace strategies, they have changed: two strategies have merged and a new one has emerged. These changes reflect a growing focus on this distribution model, while B2B e-commerce continues to grow.

But launching a marketplace does not come easily. This study has identified several main challenges that must be overcome to ensure that businesses stay on the right track for success. If we take a step back and look at the broader picture of B2B buyers’ activities, e-procurement systems take the lion’s share of transactions. Since marketplaces offer the additional benefits of large and flexible product portfolios, in the future these models will move closer together and deliver the best of both worlds.

In the previous study “The Spring of B2B Marketplaces” published last year, four different business models were identified: “Long-tail growth”, “Defensive/Offensive one-stop shop”, “Distribution channel extension” and “Business model transformation”. One year down the road, there is further momentum in the market and new business strategies have emerged.
For now we have identified:

  • One-stop shop
  • Distribution channel extension
  • Procurement network
  • Business model transformation

This study is proudly co-created by Roland BergerMirakl and Webhelp Payment Services.

Please use the form below to download this study.

To have more information about our payment services dedicated to B2B marketplaces, please click here.

Let’s get in touch via LinkedIn: Axel Mouquet , co-author of the study, and Jerome Connac.


Tips to conquer an Italian market

Italy is a priority market for fashion and ready-to-wear brands, hence the dedicated Italy workshop that took place during the 2018 Traffic trade show. Here we give you an overview and top tips from Anne-Laure Druguet, Director of Projects at the Fédération Française de Prêt à Porter Féminin, and Claudio Milani, CEO of Webhelp Payment Services in Italy and Greece.

"Italy is France's number 1 customer, followed by Germany, the United Kingdom, Spain and the United States," says Anne-Laure Druguet, Director of Projects at the Fédération Française de Prêt à Porter Féminin, who specialises in helping French brands export.

In fact, the nature of the Italian market appears to make it an unmissable opportunity for France's ready-to-wear brands:

  • €66 billion annually, with a positive trend
  • 10.5% of France's exports in terms of value (up 7.1% on 2016)
  • In 2016, Italian women spent 10 billion euros on clothes, with the Italian menswear sales volume approaching 7 billion euros.
  • Distribution: mainly through franchises, chain stores and the retail sector (47%), followed chiefly by multi-brand stores (24%), department stores (13%), and online sales (5%).
  • There are big differences between Italy's regions, with the North being a more buoyant market.

1 – Make sure you have the right agent in Italy

Our assessment above focuses more on quantity, but Claudio Milani, CEO of Webhelp Payment Services in Italy and Greece, was more interested in talking about quality: “There are a huge number of stores in Italy, even in small towns and villages. With the odd exception, you can't “sell on your own” in Italy; you have to go through one or more agents, at regional or national level. Contrastingly, committing to a retail network appears to be a risky business."

But should your agent be single-brand or multi-brand? Claudio Milani says, "A small or medium-sized company would be ill-advised to take on a single-brand agent."

And Anne-Laure Druguet adds, "It's important you have the right fit with your agent and ensure you have the same objectives and development potential. You must also make sure you pin down your methods, such as reporting frequency, and agree a mutually binding commitment in writing.”

The Federation offers French brands help with drawing up agent contracts.

Claudio Milani hammers home the point with a quip: "You know who our best allies are? Agents. And our worst enemies? Agents." Hence his advice: “Find the best possible fit between your brand, your products and your agent”.

2 – Choose the safest payment methods and conditions

Like any market, the Italian market has its own particular payment methods, conditions and practices.

Webhelp Payment Services takes care of customer collection management and trade receivable management and acts as an insurance intermediary in various countries, including Italy. This means that Webhelp Payment Services enables you to personalise your payment methods and conditions individually to each of your clients.

To find out more, and in particular for details of the payment methods and conditions best suited to the Italian market and the best way to protect yourself from non-payment, feel free to get in touch with Claudio Milani.

3 – Devise a strategy tailored to the Italian market

As Claudio Milani says, “It's not enough to set yourself financial objectives in penetrating the Italian market. You have to devise, challenge and then implement your own specific strategy”.

This strategy must be consistent with your brand identity and culture. "But beware of imposing your own rules: think globally but act locally," adds Claudio Milani.

4 – Find the balance between sales and finance

Claudio Milani's last piece of advice: “If you focus solely on increasing sales, you'll expose yourself to a lot of risks. And if you put too much emphasis on financial security, you're in danger of missing some great opportunities. You have to strike the right balance to be successful!"

 

For more information, go to our website.


International B2B e-commerce: 5 mistakes to avoid

B2B ecommerce

Increasing numbers of B2B businesses both large and small are setting their sights on trading internationally through an e-commerce platform. To give yourself the best chance of making a decent fist of it, Axel Mouquet, CEO of Webhelp Payment Services, proffers his advice and explains which mistakes to avoid.

At Webhelp Payment Services, we know all about trading internationally: we cover 35 countries and we collect 80% of our payments (€1,5 billion a year) outside France on behalf of B2B vendors.

As a payment institution, at Webhelp Payment Services we help our clients to devise and manage their B2B payment strategy. Our shared objective is to improve the customer experience and develop a secure business.

To this end, we offer risk management, transaction management and non-payment management services, working internationally with brands such as Conrad, Aniel, IPH, Procsea, Conforama, Le Duff and Rungis International Market.

From day-to-day practice and our observation of the market, we have identified 5 avoidable mistakes:

    1. The ‘everywhere-at-once, all-at-once’ strategy. The temptation is to launch in several countries at the same time instead of introducing a gradual rollout (which is more advisable as we shall see later). In this faulty model, the starting point is often the home-country e-commerce website or the reference website, which is then cloned and rolled out simultaneously in the different languages and countries. Typically, this is done by employing translators to translate the existing content. But you can bet your bottom dollar (or euro) that it won’t work!
    2. A succession of ‘cut-and-paste’ openings. In this variation on the faulty model above, the plan is to proceed country by country, simply ‘cutting and pasting’ from one site to the next. But here too you’ll be heading for trouble, as B2B conventions vary hugely from country to country. You have to understand and follow not only the law but also business practice, decision-making cycles and order-validation circuits for example. It’s therefore a no-brainer: you must redesign the site – and the customer experience – for each country or region.
    3. Staking everything on adwords. This is perhaps the costliest strategy: the company invests a fortune on buying adwords in the hope that this will capture demand. Of course, you must not neglect or forget about digital marketing, but human contact is important too! In B2B commerce, building a relationship of trust – between professionals – is crucial, especially when your business is starting out. You have to devise a sales force deployment strategy on the ground or operating in the local language. And later you will have to regularly tweak your mix of digital and on-the-ground presence.
    4. Over-centralising your business. Is your company based in Paris, Lyon or Bordeaux? Then it’s there that all of your international operations will be based. We cannot say it often enough: in B2B you must ensure you have a physical presence local to your customers. And your customers will want to check that this presence is on offer, even if it is just a sales or logistics service. In B2B, digital commerce will never do away with borders completely!
    5. Having the same payment conditions everywhere. To speed things up when rolling out your B2B e-commerce platform internationally, it is tempting to standardise your payment conditions. But experience shows that even within Europe there are major differences here, and some of them may even put you at risk. There are differences between payment conditions, respecting payment deadlines, legal aspects of the market, etc., and you also have to take into account local competition, prices and products and services on offer. And in B2B, assessing customer credit risk is crucial. Webhelp offers a range of specific international commerce solutions.

    In summary, our advice is not to spread your resources too thin and to tailor your offer to each locality. To become an international business you will have to identify the key success factors for each country and focus your efforts on them.

    And here are 5 examples of approaches that work well, where we have helped our customers grow their B2B business internationally.

    1. Introduce a gradual, tailored rollout. The idea is to be realistic, starting with the country or region that appears to present the fewest operational difficulties and learning all the lessons you can before expanding elsewhere. On each occasion, you must take the time to understand the specific characteristics of the local demand. You should implement a carefully thought-out, localised approach incorporating co-design and co-construction.
    2. Use the marketplace model. The marketplace model has certainly proved its worth in B2C and now represents a tremendous opportunity in B2B since all the tools and methods are already available. This strategy enables you to construct your offer locally, minimising the risks, investment and any logistical problems involved. And you also have the option of signing up dependable salespeople with a good reputation who are already in place. At Webhelp, we think this model is becoming the go-to approach and that you should consider it very carefully. In other words, you’ll have to have very good reasons not to adopt a marketplace-based approach!
    3. Make sure you have localised payment strategies. This is where Webhelp Payment Services comes in: devising, implementing and managing the complete payment circuit, with the option of including credit insurance, constructing a secure business model for the country in question and taking into account specific customer risks. In this respect we are able to provide tailor-made solutions on the basis of conventional or pooled distribution of profits/risks.
    4. Build locally with international partners. Your success is conditional upon knowing the ins and outs of B2B practices in the country or region concerned. Giving yourself the ability to identify and work with international partners gives you a decisive advantage. Especially if your growth objectives – organic or external – are ambitious.
    5. Develop a local sales force. As we have seen, B2B is not all about digital technology. You should consider gradually introducing sales forces on the ground.


Marketplace : Vendeurs, Pure Players et Distributeurs, quel est votre rôle ?

Sur une marketplace B2B on peut retrouver trois types d’acteurs : ceux qui la rejoignent, c’est-à-dire les vendeurs, et ceux qui en sont à l’origine, c’est-à-dire soit un pure player qui la créé, soit un distributeur qui en devient une. Chacun d’entre eux a des attentes à satisfaire et des défis à relever.

 

Le vendeur indépendant : rejoindre une marketplace

Aujourd'hui, en B2B, beaucoup d'e-commerçants et de retailers sont face à une décision stratégique : rejoindre une marketplace ou poursuivre en solo. L'idée de rejoindre une marketplace apparaît comme une excellente opportunité, quand on se souvient que moins de 20 % des entreprises B2B françaises font de la vente en ligne !

Cependant, pour être au niveau de qualité attendu par une marketplace, il faut prendre la mesure des changements à opérer :

 

  • devenir parfaitement cohérent avec les exigences qui font l'identité de la marque,
  • se démarquer, face aux autres vendeurs, au-delà du produit et du prix,
  • offrir une relation client de qualité élevée, pour ne pas se retrouver déclassé à terme.En clair, il faut considérer la marketplace comme un nouvel écosystème, prometteur mais très exigeant, dans lequel s'intégrer au mieux. Pour cela, il est possible de faire appel à un partenaire qui apportera une "brique" relationnelle : la gestion de la relation client sur tous les canaux (téléphone, email, SMS, tchat, médias sociaux...).

De plus, si nécessaire, votre partenaire pourra prendre en charge la production, l'optimisation et la mise à jour de votre catalogue de produits ou services. Quant à la logistique, elle peut également être sous-traitée avantageusement.

 

Le pure player : créer une marketplace

Quand un pure player détecte un besoin B2B insatisfait, il peut décider de se lancer dans la création complète d'une marketplace. Ce nouvel entrant a carte blanche, et il n'est pas confronté à la difficulté de "disrupter" sa propre structure puisqu'il la crée entièrement (comme l'a fait Bizmeeting dans le domaine de la réservation des réunions et séminaires d'entreprises).

 

Le distributeur : se transformer en marketplace

Un distributeur, ou une centrale d'achats, peut décider d'ouvrir une place de marché -ce cas est aujourd'hui le plus fréquent. Le défi est de niveau élevé : il consiste à créer une entreprise dans l'entreprise, ou à en refondre l'organisation autour d'un nouveau business model.

Dans ce cas, l'entreprise va créer une disruption interne : certains métiers ou domaines d'expertise forte -qui ont fait le succès de l'entreprise -vont être remis en cause. En résumé, l'entreprise va pratiquement réinventer chacune des strates de son organisation (cadre juridique, équipes, processus, partenaires, pratiques commerciales, relations avec la force de vente, expérience client...). Tout l’enjeu est d’y parvenir sans renier son ADN, mais en lui donnant plus de force, grâce à la marketplace.

En amont de cette disruption d'organisation, il faudra d'abord accompagner une transformation de l'état d'esprit et des schémas mentaux(mindset) des principaux intéressés. Dans l'idéal, ils devront désirer -et au pire accepter -qu'un nouveau modèle économique vienne servir toute l'entreprise.