INDUSTRY VIEW
The channel would not be able to properly operate without proper credit facilities . Liquidity has often been a challenge in local markets as processing release of payments typically requires extended approvals and justifications .
Customisation
Vendors and distributors need to be mindful of the unique challenges
faced in some countries , and then tailor-make different credit facilities that are attuned to the country in which the partner operates . These measures could include the following :
• Provide additional margins to the distributors to compensate for the delayed payments from their partners or to cover a part of the forex changes at the time of payments . Vendors could provide extended months of support to cover delivery gaps .
• Distributors could look to engage with high-transacting partners with big turnovers to couple different technologies together allowing the cash flow to be easily streamlined . Once this is achieved , payments would be managed to different vendors .
• Distributors should consider their alliances with partners that are rich in cash and consider positioning them as an intermediary between themselves and the partner that has been awarded the project . In such a scenario we will have Vendor-- > Distributor-- > Partner A-- > Partner B-- > Customer where Partner A would play the role of a bank .
When possible , distributors and vendors should be flexible in reshuffling deliveries that are pending at warehouses due to customer unavailability and instead redirect these solutions to customers that are keen to implement . This way both customers would be happy , and the implementation and payments would be done in a timely manner .
Distributors should perform proper credit checks on their partners to ensure that the provided credit facilities are aligned with the partner ’ s capabilities . Furthermore , distributors should have insurance in place on the amounts provided as credit to avoid backto-back payment issues in the future .
Future scenarios
Resellers should maintain a good amount of cash in their accounts and should make their committed payments on time , to allow the insurance companies to provide them with the acceptance on
The biggest channel finance related challenge in the region relates to forex fluctuations in some countries .
extended credit facilities . A reseller that fails to make their payments on time for any reason that is not acceptable to the distributor or vendor would lose their credibility and face harder payment terms in the future .
Resellers should also consider having branches in multiple countries to allow them to secure their cash and perform transactions freely by avoiding local currency fluctuation challenges . And finally , resellers should work on their partnership levels with the vendors to secure higher discounts and increase their profit margins to compensate for delays and uncertainties . •
Another challenge is the delivery delays that result due to the extended time needed to clear the goods from shipping ports .
INTELLIGENT TECH CHANNELS 17