Who Are Partstat’s Inventory Financing Solutions For? Part 4: Authorized Distributors

Authorized distributors succeed or fail on the long-standing relationships they forge with their customers. So much of the services they offer — quality guarantees, proper shipping and packaging, tracing capabilities, even product consultation — is designed to mitigate risk for customers and ensure the products they sale live up to their own reputation and reputation of their vendors. In fact, one might argue that authorized distributor is the single most important firewall between the component manufacturer and the OEM, acting as an added level of protection against a plethora of worst case scenarios such as the unintentional purchasing of counterfeit or gray market parts.

Despite so many services, however, there are limitations to what an authorized distributor has the ability to provide. For example, despite a desperate need for many OEMs who lack the warehousing facilities to store inventory long term, most authorized distributors cannot hold inventory on their customers behalf longer than typically a 90-day period. And even then, usually the inventory is not tied to the customer. This means should another customer offer upfront payment and receipt of the inventory, the authorized distributor usually has no other option but to void the commitment to the previous customer, which could prove detrimental to forming the long-standing relationships critical to an authorized distributor’s success.

This is where Partstat Inventory Financing can be extremely beneficial for both authorized distributors and their customers alike.

Upfront Payment and Industry-Leading Storage Solutions

They key feature of Inventory Financing is the ability for OEMs, even ones who are struggling with cash flow and have limited on-hand capital, to offer the authorized distributor instant full payment with the help of Partstat’s own capital. This retains cash flow for the customer, instantly providing added cash flow to the authorized distributor.

Additionally, Parstat will also store the inventory for the customer for up to 10+ years in our industry-leading warehousing facilities located in Winter Springs, FL. This reduces the inventory for the authorized distributor so they can purchase more product, as well as the customer who may not have the space to maintain such inventory for that length of time. Our solution has proven so effective, in fact, that OEMs who utilize our solution have been proven to save an average of 42% in annual carrying costs.

In many ways, such an innovative service acts as the missing link between authorized distributors and their customers. In fact, many authorized distributors around the world have referred customers to Partstat Inventory Financing as a “value add” for their customers, benefiting both parties while adding friction between the two. The more services an authorized distributor can add, the more they can stand out from the competition and turn one-time customers into long-lasting partners.

Benefits for OEMs and Authorized Distributors

Parstat Inventory Financing is an all-encompassing solution that handles buying, storing, managing, and fulfilling of inventory. In the process, this preserves OEM working capital, improves cash flow for OEMs and authorized distributors, improves margins, mitigates price inflation, reduces days’ on-hand inventory, and protects design wins.

For more information on how authorized distributors benefit from Partstat Inventory Financing, check out our authorized distributors page here.