Ingram Micro has one main piece of business advice for anyone in the audience at its ONE partner conference in Orlando this week who’s nervous about the looming prospect of a recession: cash is king.
“Especially in times of economic uncertainty, it's really critical to focus on cash,” said Kelly Carter, CFO and vice president of Ingram Micro Canada, during a keynote presentation. “You don't know what headwinds are going to be facing your business, so you need flexibility and cash gives you flexibility.”
Sensible advice, but at odds in the minds of many channel pros with the equally compelling urge to capitalize on what Ingram itself says is continued demand for IT products and services in a wide range of markets. Carter, who spoke with ChannelPro yesterday, sympathizes.
“The smart financial move for a company is to conserve their cash,” she says, “but you don’t want to stop growing.”
The answer, Carter and others at Ingram contend, is to tap into distributor financing. “You keep that cash in your business, but you can still grow,” Carter says.
Ingram has been making that case for years, noting as it did at ONE this week that partners who use financial solutions grow 25% faster than those who don’t. The current economic climate, however, has it dialing up the volume even louder.
“Heading into economic uncertainty makes it even more important that they’re thinking about these things,” Carter explains.
Ingram’s latest vehicle for extending cash flow, which it’s highlighting at the conference, is an offer good through the end of the year to delay payment on purchases made now for 90 days. Subject to credit approval, the promotion applies to both fair market value and $1 buyout leases attached to deals valued at $1,000 and up.
“It’ll push their payments into 2023, to give their customers time for their budget year,” says Melanie Delvalle, Ingram’s director of customer finance.
Utilizing finance programs does more than help channel pros conserve cash though, she and Carter emphasize. It also allows them to offer their clients more payment options. “Now they’re not just selling that technology solution,” Carter notes. “They’re part of that whole buying process and bringing value to the end customer.”
Customers every bit as eager as their technology partner to conserve cash are likely to be even more appreciative of that value, she adds. “Especially in this climate, they may want those long-term financing solutions.”
Getting financing through distributors has other advantages as well, Carter continues. Ingram and companies like it tend to approve loans, leases, and other offers more quickly than banks. They tend to offer partners better interest rates as well.
“Ingram is not trying to make money on financing. We’re trying to enable the growth of their business and the growth of Ingram, so we’re passing through the lowest financing rate that we can pass through and have that contract work for us,” Carter says. “That type of financing isn’t generally available out there.”