Although retail sales declined in March, consumer spending remained steady. Combined with rising personal incomes, wholesalers could begin to see more business.
If these conditions lead to wholesales receiving a larger order than they generally handle, there could be a need for financing to fill them. To take advantage of these opportunities, wholesalers could benefit from purchase order financing.
Deloitte's Consumer Spending Index fell slightly in March, but has remained steady with a reading of more than 4.0 in each of the past five months. This index tracks consumer cash flow and is an indicator of future consumer spending.
"Consumers have maintained their level of spending in recent months and retailers should be encouraged by the economic signals," said Alison Paul, vice chairman, Deloitte LLP and retail & distribution sector leader. "However, retailers do not have the wind entirely at their backs this month: Consumers with their tax refunds may be a welcome sight in April, but the month will come without the usual Easter holiday to boost sales."
With consumer spending holding steady in the past couple months, the slight jump in personal income in February could help boost spending in the near future. According to the Bureau of Economic Analysis, personal income increased 1.1 percent in the second month of the year.
If conditions improve in the next couple months, wholesalers could begin to see lager orders from companies, but these businesses don't always have the ability to fill orders bigger than they are used to, which could cost them a great opportunity.
However, purchase order financing could help them fill these orders if they don't have the ability on their own. This type of lending agreement allows wholesalers to receive 100 percent of the funds needed to fill an order, which allows them to take advantage of potential game-changing orders from big-box retailers.