Ask the Collective
The questions independent drinks founders ask most — answered. Distilled from years of community knowledge so the good stuff never disappears in the feed again.
What are the competitive fee structures and terms offered by different invoice discounting providers?
Invoice discounting fees vary significantly by provider and can often be negotiated. Here's what members have encountered: **Fee structures typically comprise two components:** - A service fee (usually 0.2–0.25% of the available facility) - A discount margin over base rate (typically 1.75–2.25%) **Specific provider quotes members shared:** - **Lloyds** — 0.2% service fee + 2.25% discount over base rate (with potential to negotiate the service fee lower) - **NatWest** (historical, several years ago) — ~1.75% margin over base + 0.25% facility fee, though the facility fee was negotiated down to a fixed amount and the bad-debt protection element was removed when the member used a separate credit insurer - **Aldermore** — members have used this at scale (seven figures annually) and found the fees "not uncomfortable" relative to cashflow benefits, though one member noted a competing **Credit Agricole** quote at 50% less than Aldermore's pricing **Negotiation tactics:** - Service fees are negotiable; members have successfully argued for lower or fixed fees by demonstrating that the full facility isn't needed year-round (e.g., only at peak seasonal periods) - Bundled bad-debt protection can be expensive; consider using a separate credit insurer and removing that fee element - Fees are heavily dependent on business profile and turnover; direct comparison between providers requires understanding your specific circumstances **Key caveat:** One member emphasized that while percentage-based fees might seem high in abstract terms, the cashflow benefit often justifies the cost for growing businesses.
What are the pros and cons of moving from 50/50 split payment terms to 60-day payment terms with wine suppliers?
Moving to 60-day payment terms offers improved cash flow and peace of mind, but can reduce your leverage for volume discounts and working capital optimization. The choice depends heavily on your stock turn rate and order growth. **Pros of 60-day terms:** - **Cash flow protection** — No upfront payment means money stays in your bank longer, reducing immediate pressure. - **Risk mitigation** — If product arrives defective or fails to dispatch, you haven't yet sent cash across; you can negotiate from a position of having funds rather than requesting refunds. - **Generally working well in practice** — Members report that moving to 60-day terms is working well for cash flow as long as stock moves within a couple of months. **Pros of keeping 50/50 split terms:** - **Volume discounts** — Larger orders (with payment secured upfront) unlock better per-unit pricing and freight costs. - **Superior working capital** — You can place large orders and only pay the remaining 50% once you've sold through the stock, maximizing working capital efficiency. - **Best fit if growing order-to-order** — Members recommend this route specifically if you're scaling order sizes as you grow. **Key caveats:** - The "insurance" aspect of payment terms is secondary to your trade contract, which should specify who bears responsibility for quality and dispatch failures regardless of payment schedule. - 60-day terms work best if your stock turns within a couple of months; slower-moving inventory can extend your cash conversion cycle dangerously. - If you already have duty deferment in place (e.g., stock bonded at a location), this reduces the urgency to optimize payment timing. The decision should be driven by your specific growth trajectory and inventory velocity rather than payment terms alone.
What e-commerce funding options and rates are available for drinks brands with D2C and Shopify revenue?
Members have identified a handful of specialist e-commerce funding providers that lend against Shopify and Amazon revenue. Here are the options discussed: - **Wayflyer** — mentioned for PPC spend funding; appears to be an active choice for members - **Outfund** — flagged as a potential option (member sought experiences with the provider) - **Shopify Capital** — offers lines of credit at approximately 10% interest - **A 6% line-of-credit product** — one member reported accessing this rate to fund D2C and Amazon revenue, paid out of Shopify and Amazon sales; they asked if others had seen better rates Members noted that the 6% option "seems like a good deal" relative to alternatives, though Shopify Capital's 10% rate is also available. No other providers or rates were detailed in the discussion. The group appeared less familiar with these options overall (one member requested a "101"), suggesting this is an emerging area of interest for the community.
What are the typical costs, operating procedures, and working capital implications of using Tortuga for logistics and distribution?
Tortuga is a logistics and distribution operator (part of Mangrove Brands, owned by GBH) that handles order processing, invoicing, credit control, and logistics for drinks brands. They operate their own WOWGR and AWRS independently. **How it works:** - **Charges a monthly fee with no margin taken** — you break even once you've sold enough cases to cover the fee; beyond that is profit. - **Relatively cost-effective** — roughly half the cost of employing internal operations staff to manage orders, logistics, and invoicing (saves 2–3 job roles). - **Pre-established retail & wholesale accounts** — they have open accounts with most major wholesalers and retailers, reducing barriers to getting new products listed and saving time on account setup. - **Shared delivery costs** — brands benefit from consolidated logistics with other Tortuga clients. - **Services include**: order processing, invoicing, credit control, reporting, storage, and logistics to major RTM (ready-to-market) and grocery accounts. **Key caveats:** - **Not a sales or account management service** — Tortuga handles logistics only; they do no sales, account management, forecasting, or ordering guidance. - **Significant working capital hit** — stock is given on consignment, and you don't get paid until 45 days after Tortuga gets paid by the retailer/wholesaler. This can become a serious constraint as you scale. - **Cannot invoice factor** — because invoices and POs are issued to Tortuga or Mangrove (not to you), you cannot use invoice financing to fund growth, meaning you must self-fund the working capital gap. - **Limited capacity** — they have a queue and can only take on a limited number of brands. - **Pricing can be high** — some members found their pricing "punchy" compared to existing arrangements, and pricing should be evaluated against your current setup and scale. Members report good experiences over many years, with the service working well particularly for multi-brand operations (e.g., 5 brands, 15 SKUs across Tortuga). Best suited for businesses with sufficient working capital to absorb the consignment model, rather than those needing active sales support or account management.
What is the Movement Guarantee process for drinks businesses, and what are the typical costs and requirements?
A Movement Guarantee (MG) is a surety bond arrangement that allows drinks businesses to move goods under duty suspension without paying duty upfront, saving significantly on transport costs. **The process and costs:** - The arrangement has two parts: an HMRC element (described as straightforward) and a surety bond from an insurance provider - **Aon** is the recommended broker; contact james.ellison@aon.co.uk. Members report typical costs around £1,000 per year (minimum policy fee) - Some businesses previously combined their Movement Guarantee with warehouse bonds but can now obtain an MG-only policy - Insurers will review your P&L and balance sheet as part of underwriting; underwriters may ask for increasing scrutiny during renewal periods **Security requirements:** - Some insurers request a cash deposit (one quoted £10k) held as security, though this is not always required—it depends on the underwriter's assessment of your business - Members advised checking with your specific underwriter on this point **Benefits:** - Saves a substantial amount in transport costs compared to paying duty immediately Members noted that requirements and questioning from underwriters can vary and may become stricter during renewal cycles.
What short-term cashflow financing options are available for small spirits businesses beyond traditional invoice financing?
For spirits businesses needing quick cashflow to fund production orders, members identified several options beyond invoice financing: - **Capital on Tap credit card** — interest-free if balance is paid off when due; flagged as a low-friction option for short-term working capital. - **Treyd** — specialises in stock funding for drinks businesses; mentioned as a viable option for financing inventory production. - **Ferovinum** — also offers stock funding but members warned of potential communication issues ("beware ghosting"). - **Purchase order financing** — members have explored this route, though noted it can be difficult to find providers willing to work with spirits businesses outside the whisky category. The challenge flagged: traditional invoice financing doesn't help with upfront production costs since payment only arrives after stock delivery. For a £500k production order over 6 weeks, stock-funding options like Treyd or Ferovinum may be more relevant than invoice-based products. However, stock funders can be patchy in responsiveness, so thorough due diligence and communication testing is advisable before commitment.