November 09, 2022
Happy Wednesday, Retail readers. Let's dive in.
✈️ Situational awareness: FedEx is reducing the frequency of its flights and is parking some of its planes in response to weak demand for package delivery.
1 big thing: Freeing up supply chain cash flow
Ampla wants to help emerging consumer brands get better access to capital and fintech solutions, CEO Anthony Santomo tells Kimberly.
Why it matters: Small consumer brands, especially in the e-commerce space, face hurdles in securing credit facilities from traditional banks.
- “They're not able to work with e-commerce businesses because accounts receivable on an e-commerce business turns so quickly,” Santomo says, adding that there isn’t a whole lot of collateral to use to leverage from a credit facility position.
What they’re saying: “There's just a certain cost that it takes to underwrite a single business under $200 million. And it's the same cost of underwriting a company north of $200 million,” Santomo says.
How it works: Ampla offers a growth line of credit that allows modern consumer brands to purchase inventory and cover overhead while freeing up cash flow.
- The company also helps brands streamline their accounting and bill payments and offers them a card to use for market-related expenses, Santomo says.
- “There's just a lot of different things that we're able to make available to these companies that they never had available to them and fast,” he says.
The latest: The company acquired Upside Financial this month, becoming the underpinning of a new product that extends payment terms to brands and vendors across consumer product goods companies’ supply chains.
- The acquisition allows Ampla to expand its platform across additional vendors in the CPG supply chain, Santomo says.
- The new offering, Ampla Pay Later, allows brands to go through Ampla to pay manufacturers’ invoices on terms they prefer, typically 30 to 120 days.
- Details: Emerging brands often have to pay deposits before production of inventory or pay the whole amount upfront before they even receive inventory, he says.
- “It's equally as difficult for these vendors to get comfortable floating money and letting these companies pay on terms,” Santomo says. “There's just this natural working capital gap.”
What’s next: Ampla has a couple more features to launch around banking, Santomo says, although he declined to give details.
- Ampla’s current product is also being beta tested with a handful of customers for an eventual launch in the public arena in the near term, he says.
The bottom line: “We really want to be facilitating all those payments across the CPG supply chain,” he says.