Contract Electronics Manufacturers: Free Up Your Cash Flow With Partstat
Contract electronics manufacturers, especially in today’s environment, struggle with cash flow issues. The COVID-19 pandemic has only exacerbated the need for businesses to free up what limited capital they have on hand to not just meet their production goals, but to implement critical safety measures to keep their employees safe.
“[I]n a time like this, managing your cash flow is critical,” says Paula Black writing for Forbes. Consistent cash flow gives you the ability to adapt and adjust to the changing economy. On the other hand, lack of available cash limits your options and puts your business at risk.” The need to maintain an adequate cash flow is so important that it even could be the difference between a business surviving and closing its doors.
For contract electronics manufacturers, cash flow management is difficult even in the best of circumstances. Most contract manufacturers operate on razor-thin margins of 3-5%, and under these conditions, still put upon themselves the obligation of purchasing end-of-life inventory on behalf of their OEM customers oftentimes. In an effort to keep their customers happy, they tie up their own capital and significantly limit their own ability to adapt to the rapidly-evolving business environment.
Facing this reality, the market demands a solution to this dilemma, one that allows contract electronics manufacturers to free up cash flow without unnecessarily inconveniencing their long-standing customers. Partstat, through one of its unique solutions, is the answer to that demand.
Here’s how it works: Partstat, through an EOL Last Time Buy Solution, will effectively purchase already-owned inventory from the contract manufacturer and move the obligation over to the OEM in a seamless motion that allows the OEM to avoid using any upfront working capital. Our solution has the ability to scale to large volumes and can fit any inventory quantity, and upon completion, the contract manufacturer will receive immediate payment. In some cases, this can free up tens of millions of dollars for contract manufacturers in a single transaction. Such freed capital can be used to accomplish goals that otherwise would be considered unreachable including retaining current employees, expanding the workforce, upgrading facilities, and even entering new markets with new customers.
No other solution on the market possesses this unique quality, and Partstat is proud to offer this solution to contract manufacturers and OEMs to help them free up their cash flow. For more information, check out the below video from Partstat CEO Dennis Menefee.