Secured Distribution is a specialized type of field warehousing service developed to meet the needs of Suppliers of goods who wish to (i) regulate the delivery of the inventory to the Buyer or (ii) retain ownership of the inventory they supply, or (ii) to have a possessory lien on the goods till such time that the payments are received in full against such inventory from their customers. This service can also be used by Banks in cases where Banks require ring fencing a transaction which may be part of a larger financing transaction. The discussion below is equally relevant to Suppliers, Banks and the Customers depending on the transaction structure and the needs of the party engaging the services of ACE Global Depository.
ACE Global Depository's Secured Distribution services allow a party to maintain or increase shipments to customers who require deferred sale or deferred payment terms while controlling the financial risk involved in such transactions. Obviously, the ultimate goal of both the Supplier of the goods and the eventual Customer is the same, which is to increase sales.
For the Supplier, this goal of increased sales is often blocked by concern for the financial security of the sale. This concern is an important factor because it is often the underfinanced Customer who has the greatest ability to sell the Supplier's inventory.
This typical conflict - between the goal of increased sales on one hand and a reasonable expectation of receiving payment on the other - often places Supplier's marketing and credit departments in an adversarial position. ACE Global Depository's Secured Distribution services can therefore help alleviate this conflict by enhancing the financial security of the deferred sale or deferred payment arrangement. With ACE Global Depository's Secured Distribution services, the Supplier can maintain control over both the inventory he ships to the Customer and the accounts receivable generated by the sale of this inventory.
To put a Secured Distribution plan in effect, ACE Global Depository enters into a Secured Distribution Agreement with the Supplier and the Customer. This service typically replicates ACE Global Depository's Field Warehousing and Storage Arrangement however with a focus on the issuance of Goods Receipt Notes rather than Warehouse Receipts. For a Customer this service essentially comes into demand where the Customer requires its Supplier to either stock goods in its warehouse for quick delivery or provide goods on credit basis or where the transaction forms part of a bigger transaction which is being facilitated by the Bank. This service has been developed by ACE Global Depository's as a niche service and the operational aspects of the service are customized to meet the needs and requirements of all the stakeholders in the transaction.
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