United National Consumer Suppliers, a Ft. Lauderdale, Florida broker of clothing, toys and other merchandise for discount stores such as Marshalls, has been seeing more suppliers ask to be paid up front amid worries over the uncertain economy.
But that’s not necessarily a bad thing, said CFO Todd Hartstone, who in exchange for complying can often garner deeper pre-payment discounts.
“We’re going to monopolize on that opportunity,” said Hartstone, whose business has been putting up good sales numbers as consumers seek more bargains from discount stores. “Fortunately having a little cash strength puts you in a position where you can drive the purchase.”
During a downturn, successful entrepreneurs work to create their own financing infrastructure by improving trade terms with suppliers and vendors, said Jeff Stibel, CEO of Dun & Bradstreet Credibility Corp, which studies credit ratings of small businesses.
“They’re becoming a proxy for credit and debt,” he said. “What they’re trying to do is build stronger relationships.”