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Client News Blog

U.S. SECRETARY OF COMMERCE APPOINTS KENNETH L. WENGROD TO THE TRADE FINANCE ADVISORY COUNCIL WASHINGTON D.C.

Administrator Ftccc

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On Thursday, March 7, 2019, U.S. Secretary of Commerce Wilbur Ross announced the appointment of 21 members to the Trade Finance Advisory Council (TFAC) for the 2018 – 2020 Term. These members will advise the Secretary of Commerce in identifying effective ways to expand access to finance for U.S. exporters and their foreign buyers. Kenneth Wengrod, Co-Founder/President, of FTC Commercial Corporation, in Los Angeles, CA is one of the appointees for the Trade Finance Advisory Council’s second two-year term. Established in 2016, the TFAC serves as the principal advisory body to the Secretary of Commerce on matters relating to access to trade finance for U.S. exporters. TFAC members represent commercial banks and other financial services providers, industry associations, exporters and research institutions. "The ready availability of trade finance is a crucial ingredient to the success of U.S. exporters across virtually every economic sector," said Secretary Ross. "The TFAC provides industry stakeholders a critical voice in government, allowing the Department to better assist American exporters."

What’s in Store for the Factoring Business With Fewer Stores on the Retail Landscape?

Adrian C.

by Deborah Belgum

With thousands of stores closing last year and more expected to close this year, how is the factoring industry and your company changing with this retail shift and how has this affected apparel manufacturers?

Ken Wengrod, President, FTC Commercial Corp.

Ken Wengrod, President, FTC Commercial Corp.

First, we need to understand why these stores are closing and how consumer buying habits have shifted.

Over the last decade, we have seen a retail environment of bricks-and-mortar stores that were overbuilt with cheap money and saturated merchandising.

Today, consumers are looking for “authentic” merchandise that they can select and receive easily and quickly, which is valued-based and certainly sustainable.

Secondly, I believe the question should be how has this retail shift affected apparel manufacturers, and what is the factoring industry doing to support its clientele?

It is imperative for the manufacturers to never be complacent. They must always be searching for new markets and not be idle until a turmoil affects them.

Shrewd apparel operators have been diligently working to expand their distribution network internationally and domestically by changing their business platform. These companies know the importance of truly understanding their customers—the ultimate consumer—and quickly adapting to the ever-changing landscape.

For instance, 95 percent of all potential customers are outside of our geographic boundaries. Foreign markets such as Europe and parts of Southeast Asia have strong demand for California-designed merchandise, and there is less competition to sell these accounts.

Smart manufacturers have also adapted to direct-to-consumer sales. They are developing their own analytics about their customers via sophisticated website platforms such as Shopify. Plug-and-play websites won’t cut it anymore.

Many have adapted to do more domestic manufacturing so that they can cut their lead times and reduce their production-cycle time—non–value added and idle time—goods in transit/sitting in their warehouse.

With that said, factors also need to go through a significant paradigm shift. We must create products that easily finance and approve credit for foreign sales. We must establish consumer-direct, platform financing to support manufacturers.

Through my experience, history has shown me that foreign customers do have a better payment record with less disputes and discrepancies compared to large domestic retailers. Furthermore, we developed a financing vehicle for our clients that allows them to have direct-to-consumer sales employing existing technology.

This industry is perpetually changing. But we will always have consumers. Factors and manufacturers must also be constantly searching for the right place to be.