The Scenario
Established in 2011 by passionate wine-loving founders, this online wine retailer has built a network of over 500,000 customers globally – ranking second in its category in Australia. With a unique voice and fun-focused brand, the business brings together like-minded wine-lovers worldwide.
COVID-19 turbocharged the business as consumer trends changed favourably over a very short time. The management team saw these changes as an opportunity to not only increase revenue, but also to initiate cost savings and improve profits, strengthening the business’s position.
The team’s next step was to secure a robust working capital solution to help fund future growth.
The Solution
The business sought finance to help fund growth through two key avenues. One involved creating favourable payment terms with key suppliers, and the other would capture new opportunities via innovative product offerings.
Octet recognised both the business opportunities and the ideal model and industry in which the retailer operated. The company had a healthy financial position with no debt facilities and a loyal customer base. It also used best-in-class warehouse management systems to effectively manage stock levels. Lastly, the management team understood the importance of strong supplier relationships, and actively looked for ways to strengthen them.
As a result, Octet recommended an initial Trade Finance facility of $2M to help increase the retailer’s purchasing power and build on its growth. With a flexible line of credit, the business was able to negotiate improved payable days and terms with key suppliers overseas, which directly led to improved profit margins. The trade finance facility also allowed the business to offer a broader range of products that not only aligned with customer demand, but also came with healthy profit margins.
Octet’s Trade Finance facility gave the business the freedom to capture different opportunities and build on the growth from the unexpected demand created in 2020.
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Disclaimer: The following comments are only our views and should not be construed as advice. You should act using your own information and judgment. Although information has been obtained from and is based upon multiple sources the author believes to be reliable, we do not guarantee its accuracy and it may be incomplete or condensed. All opinions and estimates constitute the author’s own judgment as at the date of publication and are subject to change without notice.
