RETAILERS BUY ADVERTISING WITH STOCK ON HAND NOT CASH AT BANK, 3 BIG BENEFITS, EXTRA SALES, EXTRA CASH FLOW AND EXTRA PROFITS

buy advertising with your stock on hand and conserve cash flow

Media 4 Retail (M4R) helps businesses conserve cash flow and capital. We help businesses buy advertising in a way that allows them to pay for some or all of the advertising with their own products rather than money from their limited bank cash resources.

The retail market could not be tougher than it is today. In recent years the high street has been under siege as online retailers have been taking market share. Now with Corona Virus in the mix consumers are too scared to leave their homes let alone go shopping. This could be the final straw that breaks the retailers back unless they change.

Traditional way: Retailers buy advertising from cash flow or working capital

Let’s consider an example where a retailer wishes to purchase £30,000 of advertising. The traditional method that has worked for years relies on cash flow funding or access to working capital. Now, in order to have that cash in the bank in the first place, the retailer must have made sales in excess of £30,000. In this example we assume the retailer has a mark-up of 100% , therefore, to have £30,000 cash available they must have sold at least £60,000 in product at full retail price. 

The Financial impact and result of the traditional way is:

  • £30,000 advertising campaign is produced with no guarantee of a return on investment
  • Bank account been drained of £30,000 working capital
  • The risk of 100% failure is very high

M4R way: Retailers buy advertising with some cash and some stock

The M4R method allows the retailer to pay between 50% and 100% of their advertising with their stock on hand in the form of store gift cards, vouchers or actual product. This immediately conserves cash flow and reduces the drain on working capital.  In the example below we show the impact of paying 50% in cash from the bank and 50% in store gift cards or vouchers.

The retailer will need to release £15,000 cash from the bank to part pay for the advertising, leaving the other £15,000 for other uses. They will then issue £15,000 of gift cards and vouchers against their “stock on hand” to complete the payment of £30,000 for the advertising.

The advertising will run and be exactly the same advertising as that would have received under the traditional way.

The Financial impact and result of the M4R way is:

  • £30,000 advertising campaign is produced and before it even commences it has sold £15,000 in gift vouchers, this is a 50% return on investment from the outset.
  • Bank account has not been drained and still has £15,000 cash in it
  • Customers come to the retailers store or online platform and purchase with the cards
  • Generally customers will purchase up to 30% more than the face value of the cards
  • Should none of the cards ever be presented then the retailer received the advertising for free
  • If the advertising works then it will drive additional foot fall to the store or online platform
  • The retailer saves even more because the cost of redeeming £15,000 of gift cards at retail values is only £7,500, the cost of the stock supplied
  • The risk of 100% failure is zero
  • The bottom line for the retailer is,  extra sales, extra cash flow and extra profits
Buy advertising with your stock on hand and not your cash in the bank, conserve cash flow.
Buy advertising with your stock on hand and not your cash in the bank

Which Retailers most benefit from the M4R way?

The Media 4 Retail platform is suitable for almost every retailer. The only requirement is that they have a need to advertise and that they sell to either consumers or other businesses.  Certain businesses are more suitable than others and each is reviewed for its suitability on an individual basis. Some will be able to buy advertising with 100% payment in gift cards or vouchers and for others it may be only 30%.

Every case is different and it depends on the type of advertising needed and the underlying product being offered as payment.

The best way forward is to make an enquiry. We will be able to tell very quickly if M4R will work for the business.

What types of Media are available?

We are able to supply almost every form of advertising with at least 30% payable in stock on hand. The media includes:

  • Television
  • Radio
  • Print news and digital news
  • Sunday paper inserts
  • Main stream digital, google and facebook
  • Magazines
  • Sponsorships
  • Bill Boards, paper and electronic, 96 sheet, 48 sheet, bus shelters and phone boxes
  • Taxis and buses
  • London underground, tube, posters, escalators
  • If we haven’t got it we will try to get it

Summary

Please ask yourself these two questions.

  1. If I stop advertising now and keep the cash in the bank, how long will my business survive?
  2. “Would I rather buy advertising with cash from my bank account or pay with store gift cards, vouchers or product?”

M4R provides a strategy that allows the retailer to have an each way bet, we drive extra sales, extra cash flow and extra profits, guaranteed!

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