|
Company:
Scrap metal broker serving steel mills and foundries.
Situation: The Company had a new business opportunity for a significant
dollar amount, but lacked substantial credit
information in order to approve the requested credit
limit. The
Company’s Buyer would not release any financial or
banking information to them directly.
Operating Facts: Requested
Credit Limit: $750,000.
Gross Margin: 4%.
Account Turns per Year: 8.
Credit function handled by the Company’s Credit Manager.
Objective: The Company was trying to determine if it was prudent to do
business at this level of exposure and needed a way to
get a deeper understanding of their Buyer’s credit
profile.
Results: ProfitGuard acted on behalf of the Company and requested
financial and banking information from the Buyer under
a Confidentiality Agreement.
The Buyer felt comfortable disclosing this
information to ProfitGuard as a third party under this
agreement. As
a result, ProfitGuard was able to get a deeper
understanding of the Buyer’s overall credit profile
and, in turn, approve the requested credit limit in
full. Upon
ProfitGuard’s recommendation, the Company was able
to take on this new business.
Additionally, the Company utilized
ProfitGuard’s Credit Alert Service, in order to
monitor any changes in credit risk on the Buyer for a
year. The
Company not only secured the business, but was able to
take advantage of ProfitGuard’s relationship with
the Buyer to proactively monitor the risk going
forward.
Profit / Payout:
Sales
Opportunity
:
$750,000
By Account Turns per Year:
8
Incremental Annual Revenue:
$6.0 million
By Gross Margin
4%
Incremental
Gross Profit
$240,000
Full-Service Platinum Subscription*
$4,000
*The
Full-Service Platinum Subscription is not limited to
one Buyer as portrayed in this scenario.
To learn more about ProfitGuard and what a
Platinum Subscription entails, please contact Scott
McCreadie at 866-990-1099
|
