A case study of a current client; A Wholesale Distributor in the North West
The client is a growing wholesale distributor of electrical equipment to various predominately smaller retail outlets but moving into supplying larger chains.
The cost review to date includes Business Foreign Exchange and Business Insurance.
Average Annual Saving
Business Foreign Exchange 1.0% (on average per transaction) and Business Insurance 24.8%.
Total Annual Saving
Business Foreign Exchange £70,000 (approx.) and Business Insurance £3,955.
A Wholesale Distributor in the North West
Our client is a growing wholesale distributor of electrical equipment providing a cost effective service to various predominately smaller retail outlets but moving into supplying larger chains. Importing the majority of their stock from Asia they have seen recent rapid growth leading to an increased turnover of stock and taking on new suppliers to meet demand. The net result has been a significant jump in foreign currency payments to over $7 million US dollars.
Upon meeting with the two Directors of the company we established they were utilising a high street bank to source their current FX needs and what they were looking for was greater security but ultimately it was all about the numbers. The reason being they had an account manager within the bank but little contact or guidance, a mixture of strict payment terms from suppliers, time taken to receive payment from customers and limited understanding of the market was beginning to have an impact on the profitability of the business, leading them to be frustrated with the precariousness of their margins in a rapidly changing market.
They also felt that their current insurance broker wasn't keeping them market aligned with a competitive policy and so asked us to take a look as their renewal date was fast approaching.
We were able to provide our client with a dedicated account manager for their foreign exchange who proactively contacts them with relevant information, helps them structure their currency transactions in the best interests on the company, gives them more options than they had with the bank and ultimately we were able to offer a better rate and fee structure (typically, they're saving 1% on foreign exchange transactions). We were also able to add extra value by working with their financial controller to review their transactions in order to show greater efficiencies and business savings.
The result has been a greater and more consistent margin on the stock they have imported, access to industry expertise and greater surety that the rates they receive are working in their favour.
In addition, whilst the business has kept a keen eye on their operating costs, we were still able to realise a significant saving (£3,955) on their insurance renewal offer from their existing brokers. And this even included a better level of cover.
"Since working with Procuright our risk and exposure to the changes in the currency market has decreased considerably. We receive a better rate and service than before meaning we are more profitable straight away. The introduction of contract options has given us more choice and the peace of mind that we don't run the risk of losing money on a deal" GL the Financial Controller.