Chilly in there?

A manufacturer of refrigerated products suffers a recurring problem.  New product launches require inventory build up ahead of the launch date, taking up valuable cold space.  When this coincides with a poor performing line from the previous season the shortage of refrigerated space has a severe financial implication.

Active International and the client worked together to pre-approve the sale of critical stock to one or two specialty wholesalers.  As inventory build up occurs, the client is able to sell the stock to the wholesalers for approximately 30% of list price; alternatively they are able to sell the stock to Active International and receive a trade credit for full list price.  In this way the client keeps full control of the resale process and is able to manage both the inventory build up and the trade credit balance.

The first time the client put the program into place Active was able to clear the entire inventory of the previous season’s excess stock within 30 days; the client chose to accept the trade credit at full list price, rather than the much lower cash price.

The client uses their trade credit to offset the purchase price of metropolitan television advertising, printing and freight purchases.