October to December represents a make or break quarter for e-commerce brands. But the ongoing negotiations with the US and China adds a layer of complexity for entrepreneurs in their busiest season, as many Chinese vendors now require inventory payments upfront. To help founders dealing with this changing vendor landscape, Clearbanc is launching an Inventory Protection Program to support e-commerce founders in the lead up to the holiday shopping rush.
Black Friday / Cyber Monday (BFCM) and the holiday season drive the lion’s share of annual revenue, and it’s predicted that shoppers will spend over $136 billion in Q4 of 2019. That’s a 13% increase from last year with 50% of it coming over the BFCM long weekend.
Many online retail companies rely on imports from China. Recent negotiations pose new challenges for these businesses, particularly when it comes to the fulfillment and shipping of holiday orders. With online orders making up an increasing portion of BFCM spend, it’s vital for online direct-to-consumer brands to front-load inventory sourcing for the holiday season.
In an effort to help founders safeguard themselves against this potential Q4 threat, Clearbanc is offering inventory protection for online brands.
US-China negotiations could have a huge impact on e-commerce bottom lines
If the planned levies on Chinese goods go into effect, by December 15 the increases will apply to upwards of $75 billion worth of American goods.
Despite delays in the previously planned October 15 hike, the uncertainty around Chinese imports has already created an unstable environment with rippling effects on e-commerce businesses and their customers.
The true cost to e-commerce businesses
We’re hearing from many of our portfolio companies that they’re now required to pay 100% of inventory costs upfront while Chinese vendors try to safeguard themselves during this uncertain time.
“Clearbanc really saved my life. The shift to 100% inventory paid upfront puts a huge strain on my business and day-to-day expenses,” says Johane Porsenna, Founder of Chic Couture Online. “Because I have access to Clearbanc funds, I’m able to pay for my Q4 inventory upfront and invest in the marketing needed to successfully launch new product lines.”
To avoid complications, some Chinese vendors are shifting their focus away from the U.S. entirely. This means fewer vendors supplying a growing number of American companies. But, have no fear founders!
Clearbanc offers founder-friendly funding to support US businesses
Take advantage of Clearbanc funding to stock up on holiday inventory so you can rest easy knowing you won’t run into any issues with shipping and fulfillment during your most lucrative time of year.
“Clearbanc has been a lifesaver during a stressful time,” says Alex Kay, CFO of The Reset. “The funding allows us to supplement the additional costs while maintaining operations and ultimately close out our biggest quarter without disruption.”
How to take advantage of Clearbanc’s inventory protection
Here’s how it works:
Step 1: Apply for funding to frontload your inventory here
Step 2: Receive offers and get funding in as little as 24 hours
Step 3: Only pay Clearbanc back when you bring in revenue
Step 4: Head into your most profitable season feeling confident 🎉!
Apply for funding today to front-load your inventory and have a successful BFCM and holiday season.