Any experienced online business knows the extensive costs of doing business today. There are dozens of outgoings – from hiring employees to marketing, taxes, utilities, etc. It can feel quite overwhelming, especially while the eCommerce space is flooded with a myriad of competition. Not only do businesses have to work diligently to acquire customers, but they want to keep them coming back. Learning to work with a budget to keep sales moving and staying afloat means paying particular attention to overhead costs and accounts payable. For online brands that work with a 3pl to scale their business, they know the benefits.
It’s a convenient service. It alleviates logistics and shipping stress.
From storage to pick, packing and shipping, various services associated with this process save time and money for businesses overall. However, depending on the third-party provider, these costs can radically differentiate – without offering much flexibility.
Finding those little fragments of savings or bespoke financial options can make a massive difference in your bottom line – such as extended payment terms.
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What are extended payment terms? 3PL billing
Running a business is a lot like riding a rollercoaster – various ups and downs. With rising inflation and looming economic predictions for 2023, it can be challenging to manage a business’s finances, look forward, and plan. Therefore, it’s always helpful to have bespoke payment solutions from your logistics service provider.
With Selazar, you now have the opportunity to delay payments for up to 90 days (also known as credit terms). This type of strategy leverages your cash instead of paying invoices daily, weekly, or even monthly.
This extended period is an innovative approach to 3pl pricing – helping more online retailers manage cash constraints. With a 3pl provider, typical payment terms can be anywhere from 1 to 30 days, but with Selazar, they can be extended up to 12 weeks or 90 days – far surpassing current industry standards.
While the current payment collection is done on ‘the spot’ upon delivery of our service, the introduction of payment terms will allow the qualifying customers to settle their invoices in 6,8,10 or up to 12 weeks. It’s a convenient service that directly debits via the Selazar online portal. The length of credit terms ranging from 6 weeks to 12 weeks will depend on the credit terms granted to each individual brand, based on the credit score assessment through third-party verification.
Bottom line – it’s a lifeline for growing businesses.
Benefits of 6, 8, 10, or 12-week extended payment terms
We believe every online business trying to scale, deserves an extended payment term because we understand it can be challenging for SMEs to find the cash flow needed to run a successful eCommerce business. Sometimes inventory from the manufacturer arrives late. Sometimes last-minute expenditures come up. With additional capital flexibility, you can reinvest more into your business and feel confident it will succeed.
Any brand, regardless of size, has a fiduciary responsibility to manage cash flow. While this task seems simple enough – extended credit terms can often be overlooked by accountants and CFOs.
Though brands may be experiencing healthy growth and steady receivables, many brands are still cash-poor, hindering scalability. Investing money in other areas can be delayed, jeopardizing overall business health. Having six weeks to ninety-day credit terms from your logistics supplier creates breathing room for your online business, especially in current financial times.
With economic uncertainty looming, banks will be forced to mitigate risks in investment with SMEs. Fewer institutions will be willing to free up funds for scalability. On top of that, interest rates are likely to increase in 2023. Regardless of economic outcomes, our business benefits are here to stay and assist online brands with more options, should they need them.
“The higher the inflation rate, the more interest
rates are likely to rise”
Therefore, negotiating extended credit terms with your 3PL provider offers a safety net.
3 main business benefits of extended payment terms include:
- Freeing up working capital to invest in other areas of the business
- More time to pay off alternate costs
- More investment in inventory
Supply Chain benefits
During the pandemic, we saw a lot of supply chain issues, such as the UK HGV driver shortage.
This created various problems for online retailers – such as shipping delays and increased shipping charges. This has led to many stock shortages for online retailers, causing monetary constraints. With so many national and global burdens, bespoke benefits are an asset to your business for these common issues.
I.e., anticipate your problems as well as your solutions.
Extended 3pl payment terms circumnavigate and mitigate typical supply chain headaches for brands. Where there is freedom, there is opportunity. Supply chain issues continue to be a hindrance worldwide for online retailers, so future-proofing your business and ensuring financial security with extended terms can offer some relief.
3PL extended payment terms summary
Take advantage today of the extended payment terms for your brand today. Along with the typical 3pl services of picking, packing, and shipping, our extended payment terms assist clients all year round. With a dedicated account manager, you can rest assured that your brand has the time and attention it deserves, both for you as well as your customers. Contact Selazar today to set up a free no obligation discovery call so we can learn about your business and priorities.