Secured Distribution

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.

  • ADVANTAGES TO SUPPLIER
  • Clearly, placing large inventories at the Customer's premises under ACE Global Depository's supervision allows the Supplier to increase sales without concern for the financial risk that would normally accompany such an action. This service can also offer other important advantages to the Supplier. With ACE Global Depository's help, the Supplier and the Customer are in a position to increase the availability of a given product and can therefore compete more favorably in the market, achieving a greater market share than would otherwise have been possible. In addition, placing inventory at the Customer's premises can help the Supplier in saving warehousing and handling costs, transportation costs, and in some instances property tax expense.
  • The Supplier's production department can benefit by being able to plan more effectively under a system that places inventory at the point of sale in advance of selling seasons and avoiding such problems as adverse weather or anticipated labor problems. Of course, the Supplier also benefits from the Customer loyalty promoted by the kind of assistance plan offered by ACE Global Depository.
  • ADVANTAGES TO THE CUSTOMER
  • For the Customer, ACE Global Depository's services provide an attractive alternative to the often high costs of today's financing. For any Customer with a major investment in inventory, assistance from Suppliers in solving this financing problem can mean the difference between the success or failure of its business. For the under-capitalized Customer who may not easily qualify for sufficient financing through conventional sources, this assistance can prove to be essential. Through the increased availability of inventory created by Secured Distribution services, the customer can experience a dramatic increase in sales. The Customer can also improve service to his Customers because of his ability to deliver goods promptly.
  • SECURED DISTRIBUTION SERVICES ARE TAILORED TO THE NEEDS OF CLIENTS
  • All of these benefits to the Supplier and the Customer can be realized through the use of ACE Global Depository's Secured Distribution Service which is customized for every transaction or client. Under Secured Distribution, ACE Global Depository's role is to take control or possession of the inventories that the Supplier delivers to the Customer's premises. By doing so, ACE Global Depository can protect the Supplier's financial interests in the transaction. Upon receipt of such shipments, ACE Global Depository issues either Inventory Certificates or Goods Receipt Notes to the Supplier, and proceeds to release the inventory to the Customer in accordance with instructions issued by the Supplier.

For further assistance, information and templates with regard to our Services, or if you wish to subscribe to our premium E Learning service for a full legal appraisal and regular updates on developments within the field in various jurisdictions worldwide, Please contact us at info@ace-group.net.