A Mountain of Switches

One of the world’s most recognised consumer electronics companies faces a monthly problem with faulty units and store returns.  While the volume of stock is less than 1% of sales, the financial impact on an annualised basis is substantial – the margin loss represents close to 10% of the marketing budget.

The return and repair or replacement process is sophisticated, complex and labour intensive.  The company takes a margin loss on every unit it is forced to replace.  Units that have been replaced are repaired and re-sold into non-competitive markets - speed to re-sell being critical due to the fashionable nature of the products concerned.

Active International, working in conjunction with our electronics partners and our client, is able to purchase these products at the full wholesale value with a trade credit, repair them and re-sell them into offshore markets.

The company uses trade credits for the purchase of media.  The process has been set up to allow the client to manage the cash versus trade credit equation on a monthly basis.