June 29, 2023 – By Hawke Partner
This is a guest blog from our partner Kickfurther, the world’s first online inventory financing platform that enables companies to access funds that they are unable to acquire through traditional sources.
Consumer product goods (CPG) brands operate in a highly competitive landscape, where growth and success are often determined by their ability to effectively manage inventory and market their products. While inventory funding and marketing are often viewed as separate components, combining these two strategies can unleash tremendous growth potential.
Let’s explore the joint value of inventory funding and marketing and how their relationship can help CPG brands thrive.
What is inventory funding?
Inventory funding, also known as inventory financing, is a type of business financing that is specifically designed to help CPG brands manage their inventory levels and cash flow. It provides the necessary funds to purchase or maintain inventory for their operations.
Inventory funding leverages the resources of a financing partner to pay for inventory production. Funding can often be customized to address your business’s exact manufacturing, shipping, and sales timelines. Some providers require no payment on goods until the inventory sells. This works well with natural cash flow cycles.
The products produced typically act as the collateral for the financing, meaning that if the business reports an inability to repay the funding, the inventory can be sold to cover the debt.
Inventory financing is especially valuable to any business experiencing a significant delay between paying for inventory and receiving payment from future sales. It is also helpful for businesses that want to receive volume-based discounts by placing larger orders to support all of their sales channels. This works best when done on a quarterly or other regular basis and can help to prevent the stock-out issues that stifle growth.
How can inventory funding benefit your marketing?
There are several ways inventory funding can benefit your marketing efforts. It can help support effective marketing execution, enhance customer satisfaction, and can enable your business to seize opportunities for growth and market expansion.
Streamlining Supply Chain Efficiency
Inventory funding plays a crucial role in maintaining a seamless supply chain. By securing funding to optimize inventory levels, CPG brands can ensure product availability without tying up excessive capital. This financial flexibility enables them to respond quickly to market demands, reducing the risk of stockouts and missed sales opportunities.
Enhancing Marketing Efforts
Marketing is the backbone of brand visibility and customer engagement. Effective marketing campaigns help create brand awareness, drive demand, and ultimately lead to increased sales. However, marketing initiatives require capital, and this is where inventory funding comes in. With a healthy cash flow from inventory funding, CPG brands can allocate resources to targeted advertising, influencer partnerships, social media campaigns, and other marketing strategies that elevate their brand visibility and resonate with their target audience.
Seasonal and Promotional Opportunities
Seasonal peaks, holidays, and promotional events are pivotal moments for CPG brands to generate revenue and gain market share. However, taking advantage of these opportunities often requires additional inventory to meet consumer demand. Inventory funding enables brands to stock up on inventory in advance, ensuring they can fulfill orders promptly and capitalize on these lucrative periods. Simultaneously, strategic marketing campaigns during these events can amplify brand presence, create a sense of urgency, and drive consumer purchases.
Nurturing Brand Loyalty
Inventory funding and marketing work hand in hand to cultivate brand loyalty. When customers find their desired products consistently available, it instills trust and reliability in the brand. Timely and efficient delivery of goods, made possible through streamlined inventory management, positively impacts customer satisfaction. Marketing efforts such as loyalty programs, personalized communication, and exceptional customer service further deepen the emotional connection with customers, encouraging repeat purchases and brand advocacy.
Leveraging Data Insights
Both inventory funding and marketing generate valuable data insights that can inform strategic decision-making. By integrating inventory management systems with marketing analytics, CPG brands can gain a comprehensive understanding of consumer behavior, product performance, and market trends. This data-driven approach allows brands to optimize inventory levels based on demand patterns, target marketing efforts more effectively, and launch innovative products that align with consumer preferences.
Brand Consistency and Customer Experience
Consistency in brand messaging and customer experience is crucial for building trust and loyalty with your customers. When marketing campaigns create expectations in consumers’ minds, inventory funding plays a vital role in fulfilling those expectations. Brands that deliver on their promises by consistently stocking the advertised products create a positive customer experience, reinforcing brand loyalty. By closely integrating marketing strategies with inventory funding, CPG brands can maintain brand consistency, ensure a seamless customer journey, and foster long-term customer relationships.
The relationship between marketing and inventory management ensures that products are available when and where consumers want them, amplifying the impact of marketing campaigns and maximizing revenue potential. By recognizing the interdependency between marketing and inventory funding, CPG brands can optimize their operations, enhance customer experiences, and position themselves for long-term success in the market.
Kickfurther Inventory Funding
Hawke Media partner Kickfurther funds up to 100% of your inventory costs on flexible payment terms that you customize and control. With Kickfurther, you can fund your entire order(s) each time you need more inventory and put your existing capital to work growing your business without adding debt or giving up equity.
No immediate repayments: You don’t pay back until your new inventory order begins selling. You set your repayment schedule based on what works best for your cash flow.
Non-dilutive: Kickfurther doesn’t take equity in exchange for funding.
Not a debt: Kickfurther is not a loan, so it does not put debt on your books. Debt financing options can sometimes further constrain your working capital and access to capital, or even lower your business’s valuation if you are looking at venture capital or a sale.
Quick access: You need capital when your supplier payments are due. Kickfurther can fund your entire order(s) each time you need more inventory.
Kickfurther puts you in control of your business while delivering the costliest asset for most CPG brands. And by funding your largest expense (inventory), you can free up existing capital to grow your business wherever you need it – product development, advertising, adding headcount, etc.