Inventory Credits

Procur has worked within hundreds of spend categories and has acquired a critical mass of client base in order to command a more favorable purchasing opportunity and provide the most advantageous procurement opportunity available.

Additionally, with a thirty-year history of global purchasing, Procur has been able to narrow and identify the highest quality suppliers to satisfy our client’s requests.

By allowing our clients a unique ability to use their inventory as a currency, our client’s profit margins directly offset the normal costs associated with their traditional purchasing structure. Using inventory in lieu of cash not only saves cash but incrementally reduces the direct cost of the items purchased through the Procur programs.

In the model below, an example of using Procur’s inventory credit offset program evidences a typical Procur transaction in which the client’s inventory is used as a currency to offset both cash outlay and achieve a reduction in incremental costs:

Using Procur’s procurement program the company will make available a future credit to purchase its inventory. Procur then negotiates with its vendors to affect the best possible cash/inventory credit program. Using the average inventory credit percentage of 24%, the company’s net cost is reduced as shown below.

With the above example the client achieved a net cash savings of $204,000, or a little over 20%. A future inventory credit of $240,000 remains due Procur which could be end-of-life inventory, overstock inventory, excessive inventory, or discontinued inventories.

An additional advantage to the inventory credit offset program is the inventory that is provided to Procur may act as an initial exposure to a new client base. By Procur marketing the inventory to new customers, once that inventory has expired, the receiving client may wish to continue doing business through traditional purchasing channels, thereby expanding market share and customer base.