A seafood distributor specializing in oyster production has been a customer of Flexent for over 27 years, and not because of long-term contracts or exit fees, but because of the power of same day cash flow and the flexibility and excellence of the Flexent team.
Company History
Founded in the 1940s, this seafood distributor has been family owned and operated for almost 80 years. Specializing in oyster processing, the company started in a single room shucking house, and has grown to thousands of square feet of world class production space.
Today, the company continues to grow, committed to their family values, offering a wide spread of seafood products, from scallops and other shellfish, to fin fish.
Opportunity to Optimize Cash Flow
When the company entered the oyster production industry, they faced a common challenge. Many seafood companies operate on a strictly cash basis, paying for all their resources day to day. Working with independent commercial fishermen, these companies must pay in cash before they can get the goods off the boats and into their production facilities. But that’s just the first step. Once a company acquires the goods, then comes 2-3 days processing, packaging, and distribution. If a company works with large retailers grocery chains, like our client did, then they would to wait around 30 days before receiving payment.
In our client’s case, as they grew, it wasn’t uncommon for them to purchase $30K of goods per day. That adds up quickly with a cash conversion cycle is 30-40 days. Laying out that much cash before receiving payment can create major problems for companies. On top of these costs, a company must meet payroll on time. Our client saw the potential buying power provided by AR financing and factoring, and so started working with Flexent.
Beating out the Competition
By selling their receivables to Flexent for same day cash flow, the company maintained a consistent level of liquidity. This allowed them to pay the fishermen daily. When the other companies in the region ran out of cash, they would have to send the fishermen up the road to another competitor. By working with Flexent, our client always had cash on hand. This was a crucial advantage early in the company’s history, allowing them to pay for their daily expenses without cash constraints. Flexibility led to longevity, and the company has not only competed, but thrived, doubling multiple times over the course of the relationship.
Continuing with Flexent
Having grown substantially, the company moved into a stronger financial position. For the past 18 years or so, they have not needed Flexent from a financial perspective, being able to able to operate without outside capital while continuing to grow. However, due to the ease of working with and responsiveness of the Flexent team, the company continues factoring their accounts receivable for their largest account debtor to this day. In their own words, “…it’s almost too easy not to use”.
So the company continues with Flexent, enjoying the ability to operate on a cash basis.
