Articles, Blog

Chicken Importer Spreads its Wings

November 20, 2019

We import fully cut chicken wings. It is the number one appetiser item on anybody’s menu
of any restaurant in all of Canada. When I met them they were looking
at exploring an opportunity to go and purchase product in Thailand
and sell it in Canada. The first order, the first container
that we ever brought in took basically 18 months. Nine months
to actually get the product made for us. Another nine months to sell it all. The facilities the company
was accessing when I first met them were very traditional
domestic-centred facilities, which matched their business very well because at that point they were
predominantly a domestic business. That was their major liability too because they were going to go
outside Canada to source inventory. We started financing the product
through a third party. They would actually pay for the product
upfront into Thailand. Once it was received into Canada there was a 5% levy
that was put on that. I was getting very frustrated
with the setup of having a third party. James took the time
to come to our office, sit down with myself and say, “Are you done self-funding?” Quitting self-financing was important because then they could lever up
the equity they had in the company to generate additional sales because
they had access to additional inventory. The solution that I offered the client, was to essentially replace their
middleman and go direct to Thailand. That solution looks like the bank
providing an LC [letter of credit] to cover the customer’s purchase orders from three very large suppliers
in Thailand. They don’t pay for the product until it
lands in Vancouver and they accept it, unlike their previous arrangement
where they had to pay 100% upfront. It was an open-account arrangement
which in itself can be dangerous because of the potential for loss and for the potential
of getting the wrong goods. Them helping me finance all that makes everything
so much easier for us to do because without their help
I could never ever do that. It would be more like I’m going
from hand to mouth every single time. What it does is it allows them
to grow further and if they have done it right,
they will make more money and it becomes more personally
satisfying for the clients. To me that is a huge incentive – being able to help people
in their lives succeed. Perfect, as usual. Thank you.

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