Access to funds has always been instrumental to success for all businesses as it enables organizations to expand their offerings, scale operations, and capture needed resources to capitalize on growth opportunities. This is especially true in retail business-to-business operations with net terms being the most widely practiced payment method to secure inventory now but defer payments to either 60, 45, or 30 days. According to a 2023 Market Report by Billd, 65% of B2B sellers consider payment terms vital for influencing business growth and this type of trade credit, according to the Federal Reserve, is the most important form of short-term finance for firms. In fact, in 2019, U.S. non-financial firms had about $4.5 trillion in trade credit outstanding equaling 21% of U.S. GDP.
Although the B2B payment space remains the largest sector in terms of transaction volume, it still lags behind its B2C counterparts in innovation, accessibility, and flexibility. Traditional approaches to net terms have outdated qualification models that fail to serve a demographic of small to medium-sized retail buyers. FASHIONGO, the leading online B2B wholesale fashion marketplace with over 2 decades of expertise in technology-driven solutions, is pioneering a new approach to address these foundational process flaws in net terms that create challenges and issues for overlooked business owners.
Innovating with Dynamic Net Terms
Traditional Net Terms solutions boast a one-size-fits-all qualification process with rigid and stringent criteria that the applicant must meet that will result in a binary approval decision of “yes, they qualify” or “no, they don’t”. This inflexible qualification process characterized by generalized and limited in financial data sources can overlook about 90% of creditworthy and true in need small and medium-sized retailers, who are the backbone of US economy. The current process for net terms qualification results in an average net terms credit approval rating between 5%-15%.
Enter FASHIONGO, the leading online B2B fashion wholesale marketplace aiming to revolutionize B2B net terms through Dynamic Net Terms, a first-of-its-kind solution that approves buyers dynamically across different net term criteria, relevant to retail business, adjusting to each individual business profile to maximize fund access. There is a crucial need for scalable technological solutions that consolidate diverse relevant data sources and enable real-time approval for deserving buyers in a specific industry who are typically declined by other payment programs which Dynamic Net Terms precisely delivers.
Lowering the Barrier to Ignite Business Growth
FASHIONGO, pioneers a new solution to address these issues called Dynamic Net Terms taking a more nuanced approach through industry-leading risk models and lending infrastructure. To break down barriers and help businesses grow on their terms, FASHIONGO has partnered with Balance, the leading B2B payment technology provider. Instead of a rigid binary yes or no approval decision, FASHIONGO offers variable 60, 45, or 30-day terms dynamic to the applicant’s profile. This allows a broader spectrum of retailers by lowering the barriers to accessing capital critical for business growth. Ultimately, FASHIONGO aims for an approval rating of 5-6x times above the industry standard.
Rather than relying on incomplete information and arbitrary standards, FASHIONGO leverages rich data and over 20 years of fashion industry expertise. The focus is on understanding the customer’s full purchase journey and growth objectives to provide the most practical solution that addresses the real business needs and demands of each buyer based on their financial history on FASHIONGO. As buyers continue to purchase and pay down balances, FASHIONGO dynamically adjusts the terms to fuel further expansion for both the platform and the buyer.
The commitment is clear – maximize access to cash for all buyers, not just for the select few but for the many buyers that need it most. FASHIONGO aims to push high net terms approval rates to create a model that will set a new standard for an inclusive B2B payment landscape, especially for buyers who need access to funds quickly. In a recent survey by Balance, 71% of buyers said easy, quick access to net terms would be the biggest factor in choosing an e-commerce platform. With real-time approval processes through Dynamic Net Terms, FASHIONGO accelerates the sales cycle for buyers, vendors, and suppliers on the platform.
The power of Dynamic Net Terms not only lies in its accessibility but also in the continued growth of buyers’ purchasing power on FASHIONGO. As buyers continue building their financial history through order placements and on-time repayment on FASHIONGO, buyers’ net term credit will automatically increase.
Buyers can also enjoy flexibility in order payment by leveraging seamlessly both net credit and credit cards together for a singular order, giving them the ability to secure larger inventory and freedom to pay their way. This innovative approach supports businesses to grow their sales by enabling them to place more substantial orders and pre-orders with the ability to combine different payment methods.
FASHIONGO is No Stranger to Innovation
“Dynamic Net Terms is not just a payment solution; it’s a catalyst for growth, designed to empower retailers who have historically been underserved,” says Paul Lee, CEO of FASHIONGO. “We’re a tech company addressing foundational industry issues, not just buzzwords. Dynamic Net Terms prioritizes a customer-centric approach designed to cater to each business’s unique needs that is both accessible and flexible”
The future looks bright for platforms, vendors, and retailers alike as innovative fintech solutions reshape traditional norms. Dynamic Net Terms pioneers a movement towards synchronization – understanding buyer needs first, then providing the tailored tools for their business to thrive. As part of the wholesale ecosystem, FashionGo remains committed to continually investing in solutions that are most impactful to buyer’s success, especially when it is needed the most. Dynamic Net Terms will empower retail buyers with greater purchasing power to position them for success in an ever-changing and turbulent retail landscape.
For more information on Dynamic Net Terms, visit here.