Branding is a powerful thing. You don’t need to read McDonald’s to understand the Golden Arches. The iconic Swoosh represents Nike. And despite many versions throughout the years, an apple is synonymous with, well, Apple. Good branding builds businesses.
Logos convey strong messages to buyers, which sparked the practice of white labeling. With white labeling, one company produces a product that gets rebranded and sold as another company’s. You experience white labeling every day from features in the cars you drive to the products you buy and the software you use. White labeling holds many benefits for both the producer and consumer of products and can dramatically impact customer relationships and a company’s bottom line. Following are a few things to consider before taking a do-it-yourself development approach and why white labeling might be right for you.
The Need for Speed
White labeling a product developed by another company significantly reduces deployment and marketing time. Rather than spending time creating, developing, and marketing a new product or offering, companies can simply create their custom look, train users, and release. This is particularly important in competitive environments where businesses need to move quickly to keep up or pull ahead of their peers.
Every company operates differently. When out-of-the-box software doesn’t work, the entrepreneurial instinct prompts creating a homegrown product. This takes significant time, money and resources. Conceptualizing a product requires creating a group who knows everything about your business, which isn’t realistic. Development time can take years and becomes very costly. Inevitably, businesses working to build software to create efficiencies lose some productivity throughout the life of the project as staff and resources become stretched. Plus, businesses change over time, so development must be continuous. We’ve heard the story of a large company that invested three years in creating a new software package for staff. By the time it was complete, the business had changed so much that portions of the new technology were never used. Three years of money, staff time, and training lost.
White labeling eliminates lots of these challenges. Many of today’s software companies operate using an Agile methodology, which means many small changes as rapidly as possible. Their products constantly evolve without users experiencing significant wait times for improvements or constantly having to relearn how to operate within the system. White labeling also puts the burden of testing on the creating company. They troubleshoot, make revisions, and refine the product so the white labeling company gets a proven technology ready for use.
Stay in Your Lane
White labeling is an excellent solution if creating technology is not your core business. Sure, you’ve probably got some really talented people in your MIS department. However, they are probably pretty taxed supporting your existing business operations and IT infrastructure. White labeling leverages other people’s expertise in creating great technology, so companies can focus on their core business competencies that generate profits.
Group Think as a Good Thing
When you white label a technology, you get the benefit of the ideas of everyone using the product. Software companies work to constantly refine their technology, so the more people offering feedback the better. A good technology should meet the needs of your business without you having to significantly change how you operate to use it. However, in using a white label technology, you get the benefit of features generated because of how other companies operate as well. This creates the opportunity for discovering new efficiencies over time to help your business that would have remained undiscovered by building a product in house using only internal expertise.
White labeling a product provides another opportunity to put your logo and brand in front of the people that matter most. You essentially create a marketing opportunity with each click. Offering technology that improves user experience that looks and feels like your company creates brand loyalty, improves net promoter scores, and increases efficiencies.
Our Technology. Your Brand.
FreightRover offers white labeling across its four-product technology suite. Our technology paired with your brand gives a new face to supply chain management. The software looks like your business, but without the tedious work of developing or maintaining an app. We even take white labeling a step further with custom branded client emails and URLs. FreightRover’s technology design lets you focus on your business without spending extra resources on do-it-yourself development. To learn more about FreightRover’s white label approach and how it could benefit your business, request a quick demo at https://www.freightrover.com/demo-request/
Major parcel carriers are sounding the warning bell on possible significant service disruptions this holiday season, which could dramatically decrease capacity as soon as November 8. This also comes on the heels of announcements of free holiday shipping from Target, Walmart and Amazon to boost sales. With annual ecommerce sales expected to peak during Q418 under already constrained less-than-truckload conditions, losing another 7-10% of total LTL capacity will impact everyone.
What does this mean for you?
You already may be experiencing freight rejections. Many 3PLs are actively directing customers to alternate carriers to keep freight moving. This is tightening capacity across the entire domestic LTL network, an effect felt by all shippers, not just parcel carrier users. As available capacity lessens during the Q4 peak season, rates will rise. Shippers should expect to pay more this season, which means consumers will too.
What can you do about it?
- Strengthen your bench – many shippers prefer specific LTL carriers, whether for price, service or speed. Despite having a favorite, savvy shippers often establish relationships and rates with multiple LTL carriers to ensure they always have options for moving their goods.
- Plan ahead – the LTL shipment you’re used to tendering same-day might not move as planned. Give LTL providers as much notice as possible so they can maximize trailer space and routes to move your shipment on time.
- Know your ‘stuff’ – providing inaccurate information to carriers regarding shipment dimensions, weight or class that impacts their asset utilization is a quick way to get kicked to the curb. It’s also a way to get your shipments left on the dock while working out the details. When competing for capacity, the easiest shippers often get the space.
- Ask for help – using multiple LTL carriers under different rates without a transportation management system is tricky and time-consuming. Look to leverage a system or 3PL for easy quoting and dispatch that doesn’t break the bank.
How can FreightRover help?
FreightRover’s SmartLTL offers multiple quick fixes for shippers responding to the looming LTL capacity dilemma:
- Capacity options – The system provides shippers immediate access to multiple carriers specializing in all US regions.
- Rates – Shippers can leverage their existing carrier rates or use pre-established carrier rates without individual contract negotiations needed.
- Speed – SmartLTL offers quick quote-to-tender capabilities in under 60 seconds. Shippers receive immediate quotes from multiple carriers and can sort by rate or speed of delivery.
- Efficiency – Easy data saves accelerate shipment builds. Create the information once, save it, and use the easy search and click option for creating future shipments.
- In-system shipment tracking – Shippers receive a tracking link at shipment dispatch to monitor their shipment or can leverage the customer service team for shipment information.
- One-click invoice approval – SmartLTL publishes invoice amounts online for easy review without the unnecessary paperwork.
- Streamlined payments – FreightRover acts as a third party to issue carrier payments, so shippers move to one payee. This eliminates the need for long carrier onboardings and managing multiple carrier pay terms.
Perhaps most important, regarding the impending capacity question, FreightRover can get shippers operating in the platform within 24 hours. Launch includes three easy steps: 1) agreement signatures, 2) quick system tutorial, and then 3) shipment builds begin.
The system doesn’t require subscription fees or licenses, so shippers only pay a low fee per shipment for SmartLTL access. They can use the system permanently or until LTL capacity returns to normal.
It’s always good to have a Plan B when it comes to shipping. Block some time to think about your alternative strategy as the capacity crunch lingers. SmartLTL is here to help. It makes a great Plan B, but after trying it, we think you’ll consider it your new Plan A.
FreightRover’s PayEngine provides a mutually beneficial supply chain finance program for companies and their vendors. Companies benefit from extended pay terms to improve working capital while providing their suppliers with tailored options for accelerated receivables.
Despite the wins supply chain finance provides both parties, many companies hesitate to implement a structured payable program due to balance sheet concerns. Poorly managed programs can result in trade payables reclassifications to debt, which negatively impact leverage ratios and debt covenants.
PayEngine’s program meets all trade payables accounting standards to protect a company’s balance sheet and bottom line. Following is our guide to understand the difference between a trade payable and debt in a supply chain finance program.
The First Question:
Has the economic substance of the trade payable changed?
When accountants review payables classifications on the balance sheet, they look at each of the following categories to assess if the trade payable has been modified in such a way that it is creating a financing cash inflow that benefits the company. Accountants will look at the categories collectively to assess the entire supply chain finance program as well.
- Settlement of trade payables cannot take place at a date later than or for an amount other than what is stated on the original invoice upon submission to a third-party payor. Doing so would be considered borrowing, which is debt.
- A new trade payables arrangement cannot change the terms between a supplier and a third-party payor that’s inconsistent with normal trade payables terms.
- The company cannot participate in or influence term negotiations between the supplier and third-party payor. The vendor and third-party must negotiate directly.
- A trade payables arrangement must apply to a broad range of suppliers. However, the program does not need to include all suppliers. Companies can extend days to pay without all vendors accepting the new terms if most suppliers do comply.
- Supplier participation in a supply chain finance program must be voluntary. If enrolling is required to maintain a relationship with the company, a debt reclassification may be required.
- Should a large majority of suppliers impacted by extended pay terms select an accelerated pay option, which marks a significant change from the previous arrangement, this could trigger a debt reclassification. For example, if a company extends terms from 30 days to 120 days and now most of their supplier base elects to monetize receivables and did not prior to the change, this would require review as potential debt.
- Companies can extend pay terms to align days payable outstanding or other working capital ratios with peers without changing the structure of their payables to debt financing. As a reference point, the US average across the largest 1000 companies currently is 57 days.
- Trade payables should not include the accrual of interest prior to when the trade payables become due. Late payments can incur interest without reclassification impact.
- A company must retain its negotiation rights with the vendor directly and have the ability to withhold payment. Application of credits must be consistent with past practices. For example, if a company places a freight claim against a carrier, they should have the ability to withhold payment to the carrier until the issue is resolved. If a third-party payor compensates the carrier prior to the completion of the claim negotiation, and the company must arrange for a credit that’s inconsistent with how they’ve traditionally done business with the carrier, there could be a debt implication.
- Whether or not a vendor decides to monetize their receivable cannot impact the company’s cost of goods sold or services received from a vendor. The third-party’s arrangement with the vendor and company must be independent of the other party’s interests. Therefore, a company cannot pay a vendor more to offset the cost of accelerated receivables.
- Companies cannot change the legal characteristic of trade payables. Events that indicate characteristic changes include: immediate draw-down of credit lines, altering trade payable seniorities, securing trade payables through collateral, or incorporating default provisions.
- In general, trade payables cannot have guarantees. However, in the case of a parent company being “jointly and severally liable for a subsidiary’s obligation,” a reclassification may not be required if it is the sole indication of a debt trait.
Impact of Third-Party Payor:
- Implementing a structured payables program may be part of a larger accounting outsourcing strategy. This could include using a third-party platform like FreightRover’s PayEngine, which includes posting invoices and assigning accounts for fund withdrawals as payables reach their maturity date.
- Rates paid to the third-party payor by the company cannot vary based on things like the number of vendors selecting a quick pay option or number of invoices sold to the third-party.
- Red flags for debt reclassifications include: the third-party receiving new rights, if the third-party has influence on which invoices get paid, or if the third-party can withdraw funds from the company’s other accounts without consent if sufficient funds become unavailable.
If you are interested in learning more on trade payables or modifying your vendor payments using PayEngine’s technology and supply chain finance program, visit www.freightrover.com/pay, email email@example.com, or call 866-621-4145.