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Buy Now Pay Later for Distributors

The B2B marketplace is a big arena facilitating the purchase of products and services between two companies. The smooth operation between the two companies happens due to the presence of distributors connecting manufacturers and retailers.

Distributors usually purchase a large number of products from producers and supply the items to individual retailers. However, distributors often face financial challenges to purchase such large quantities of products.

However, relying on new-age payment financial services like Buy Now Pay Later can help them significantly. KredX offers Buy Now Pay Later for Distributors to help manage working capital needs and expand businesses.

Introduction To B2B Wholesale Distributor

A B2B wholesale distributor can be a person or business that purchases products from manufacturers and sells them to retailers, assemblers or other manufacturers. They transfer these products through the supply chain.

The presence of distributors thus eradicates the need for the producer or manufacturer to contact any retailer.

Working Procedure Of B2B Wholesale Distributor

B2B wholesale distributors typically do not sell products to end consumers; they have a specific operational area or speciality and intend to offer benefits to entities that wish to form a partnership with them.

A B2B wholesale distributor working in a specific business, such as clothing, and automotive parts, can enjoy the advantage of purchasing larger quantities and avail volume discounts.

Working in a particular sector thus helps B2B wholesale distributors develop client relationships with a specific segment. On the other hand, business buyers can get products at a lower cost than the usual rate when they directly purchase from their manufacturer.

However, this does not mean that the original manufacturer gets deprived of benefits due to the presence of an intermediary. Selling products to selected large distributors rather than countless retailers also helps sell their items fast and quickly without any hassle.

Challenges B2B Wholesale Distributors Face

Following are discussed several challenges that wholesale distributors usually face in their business-

  • Disintermediation
  • Modern manufacturers and retailers have started to eliminate traditional distributors from the whole operational structure. The rising of online platforms and advanced technologies thrust manufacturers and retailers to take this decision as the former gets the chance to sell items at a higher price, and the latter gets the same at a lower cost than the wholesaler distributor.

    Relying on advanced automated technologies, such as automated distribution, can help regain their position in the industry and allow retailers to get products in a timely manner.

  • Inventory Management
  • Manufacturers typically use a three-tier selling and distribution structure. Distributors, wholesalers and retailers are included in this structure. The distributor is the direct point of contact for manufacturers who pass on their products to wholesalers. As wholesalers and distributors both can stock large quantities of items from manufacturers, retailers can choose to purchase the same from either wholesalers or distributors.

    Here, the need for inventory management arises for distributors. Inventory management refers to maintaining track of all the input and output of goods from the warehouse. Since wholesale distributors deal with large quantities of products, they must know the residual amount of products after each order shipment, current and future needs, and the time left to fulfil upcoming orders.

  • Lack of Required Cash
  • As stated earlier, distributors purchase a large number of products and then sell them to retailers. Therefore, they act as the storehouse for products through which the distribution network runs smoothly. Purchasing items in bulk requires enough cash.

    Often wholesale distributors fail to manage the required funds to buy items, thus failing to sell bulk orders to retailers. Disruption in product shipment to retailers affects the whole cycle, i.e., both B2B and B2C segments and hampering client relationships.

    In such cases, distributors can opt for the Buy Now Pay Later option and enjoy the advantages offered under this financing medium.

    Buy Now Pay Later is a short-term financing option that enables consumers or business buyers to purchase products without any upfront payment and pay at a future date. BNPL model works smoothly because there are financiers that help sellers by allowing them receive money immediately after the sale, as well as buyers by giving them access to products without upfront payments.

    Therefore, individuals involved in the B2B distribution business can rely on BNPL for distributors to resolve cash or working capital related issues.

    Those who are looking for a reliable BNPL provider can reach out to KredX without any second thought.

    Read on to know how KredX can help individuals involved in the distribution business.

How Can KredX Offer Help to Individuals With Distributors Buy Now Pay Later?

The financial product of BNPL offered at KredX can help individuals associated with the B2B distribution business in various ways. These are discussed below:

  • Reduce Working Capital Issue
  • When distributors integrate BNPL at the payment gateway, they receive payments immediately after selling products to retailers. Thus, BNPL ensures a continuous inflow of cash which helps resolve working capital challenges. In addition, with the money acquired from retailers through a BNPL provider, B2B wholesale distributors can purchase products from the manufacturer in bulk and continue this work cycle.

  • Increased sale
  • If distributors can offer this BNPL facility to retailers, it will undoubtedly increase sales. Small retailers facing working capital challenges like that of distributors can benefit from distributor BNPL and continue business without worrying about money.

    By relying on KredX BNPL solutions, distributors can increase their average sales per person by up to 40%.

    The popularity of Buy Now Pay Later in the B2C sector is quite commendable. No wonder this short-term financing option is slowly invading the B2B industry and benefiting each player involved.

    Therefore, individuals involved in B2B distribution and willing to expand their businesses to retain more consumers (retailers) and increase sales can opt for Buy Now Pay Later for Distributors. Embracing this new-age payment option will help both distributors and retailers grow and ensure that operations at the next level, i.e., B2C sectors run smoothly.

FAQs

Yes, BNPL can increase cart conversion rate in the B2B distribution business.

Yes, BNPL for distributors helps retailers get products instantly without upfront payment.

Yes, by integrating the KredX BNPL payment option into their distribution businesses, B2B distributors can save the merchant discount rate up to 2%.

Yes, distributor BNPL helps save time for retailers as they need not apply for credit cards and wait for approval to purchase products from distributors.