Cash to seize a supplier deal before the offer lapses

The phone rings midweek. A manufacturer is clearing a container, a distributor will drop the price if you take the whole pallet run, or a rival is winding up and selling their warehouse. The catch is always the same: payment by Friday.

Deals like this have built some businesses and sunk others. The difference is usually a ten-minute calculation done before the money moves.

Run the numbers in dollars

Percentages blur the picture. Work in dollars, in four steps:

1. The saving. Normal cost minus deal cost.
2. The holding period. How many weeks until you’ve sold most of it and been paid.
3. The funding cost. What the money costs for that period, in total dollars.
4. The extras. Storage, freight, handling, insurance and any discounting to clear the tail.

Net benefit = saving − funding cost − extras. Clearly positive when you assume slow sales? Worth a serious look. Positive only if everything goes right? Walk away.

Check	Encouraging	Worrying
What you’re buying	Lines you already sell well	Something untested
Time to sell	A few weeks	Many months
Space	Room on site	Paying for extra storage
Supplier	Known and reliable	New, no paperwork
Margin after deal	Clearly better than usual	Barely different

Don’t forget GST

If the supplier charges GST, the cash you need on the day is 15% higher than the quote, and you only recover that through your next return. A $38k deal is $43,700 in the bank on payment day. Include it in what you borrow.

Early-payment discounts count too

Some suppliers take a few percent off for settling within a week instead of on the 20th of next month. That’s a deal, and the same test applies: dollars saved against dollars of funding for the extra days. Where this recurs, a business cash line lets you take every discount and repay when your own customers pay. Ask about longer terms as well, using the approach in our supplier terms guide.

Deal on the table with a deadline? Tell us the amount and the date.

Getting the money quickly

Speed is the whole point. Prepare in advance:

• The supplier’s offer in writing, with price, quantity and deadline
• Recent statements for every business account
• Photo ID and your NZBN
• A sentence on where the stock will sell
• Your phone, switched on

Smaller unsecured amounts can be funded the same day. More on what helps in quick business cash.

A worked comparison

Illustrative only. A wholesaler offers 450 units that you usually buy at $64, priced at $49 each if you take every one and pay this week. Figures exclude GST.

Line	Amount
Usual price, 450 × $64	$28,800
Offer price, 450 × $49	$22,050
Gross saving	$6,750
Cost of money for about ten weeks (example)	$1,400
Storage and handling	$550
Net benefit	$4,800

Now push on it. If the units crawl out the door over five months instead of ten weeks, the cost of money roughly doubles and storage grows. If the deal still pays, it is probably sound. If it only works on the sunniest assumptions, decline.

When deals arrive often

In some trades, clearance lots, trade-show specials and auction stock come round every few months. A standing cash line means you can act the same day without reapplying each time, then repay as the goods sell.

When to say no

• The supplier will not put terms in writing or asks for unusual payment methods
• You’d need heavy discounting to move it
• Repayments would start well before most of it has sold
• It would crowd out stock you already know sells

Another deal will come along. Your cash balance is finite.

Checking the supplier

Before sending money on a once-off offer, confirm the supplier is who they say they are. Check the company on the Companies Office register, ask for references from other buyers and be cautious about unusual payment instructions or changed bank details. If the goods come from overseas, factor in shipping times, customs, import GST and currency movements. A bargain from an unreliable source is not a bargain. Ask what happens if stock arrives damaged or short, and get the answer in writing. Reliable suppliers welcome these questions.

An illustrative example

Illustrative only. A hardware store in Palmerston North is offered a discontinued range of power tools, priced well below normal trade, provided the whole lot is paid for within three days. The owner confirms the tools match lines she already sells, expects to clear them in about three months and checks the saving beats funding plus storage. A short-term unsecured loan lands the next day.

Move at deal speed

Offers don’t wait for committee meetings. If the numbers stack up, tell us. The enquiry takes about a minute, asking involves no credit check and your details are kept with one team. A real person rings back promptly.

Accurate amounts and payment deadlines are what allow us to move at your pace.

Grab the deal →