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Could Covid steal the tech sector Christmas Peak?

A critical time of year is at risk for the tech-sector.

The personal, real-life effects of the Covid-19 outbreak are heart-breaking. The death toll is shocking, and the impact of this outbreak will be felt for years to come.

What will be important as time goes by is working out the best way to put our lives back together – and from an economic point of view we have to consider how business can get going again to stimulate the jobs market and put money back in everyone’s pockets.

From a business perspective, retailers and manufacturers in our sector are so reliant on the Christmas peak – and therefore protecting that will be key to ensuring the future of thousands of companies across the world – but in an industry where manufacturing lead times and the availability of capital make or break peak preparations, the Covid crisis could have a huge impact.

Right now, many manufacturers will have exciting roadmaps of new product aimed at Black Friday and Christmas. Perfect to stimulate their business and support their retail partners.

The problem is, they have lost so much business over the last couple of months, they don’t have the finances to invest in new products – instead their critical working capital is tied up in inventory and overheads.

Alternatively, many manufacturers will have run out of stock that has sold online, but the gap in manufacturing from the Chinese lockdown (right after Chinese New Year too) means that their lack of income generation has left a big gap in their working capital as well. This will leave them unable to invest in long lead-time components, R&D, tooling or even testing and compliance.

Essentially, a lack of working capital in growing tech manufacturers could destroy their peak season – it could have dramatic effects on their future, and that of their retail partners. For smaller brands it will open up gaps that those with deep pockets can take advantage of, effecting the level of competition that we see and harming the ability of new innovative brands bringing exciting new tech to the market.

If the situation described above relates to your business, then read on.

Exertis Supply Chain Services offer a wide range of support options from working capital and payment terms financing, all the way through to full factory-to-market services for your procurement and logistic needs.

The business has been operating since 1978 and is filled with supply chain experts based all over the world. The primary focus of the operation is to offer support to tech brands with bespoke plans.

The team are not in to the ‘hard sell’ approach as the offerings are all about creating plans that are right to support your individual business.

If you want a short, free, confidential, no-obligation conversation (with no pushy follow up) then drop me or any of the team a line anytime and we will get back to you – wherever you are in the world. You can get in touch by filling in the contact form on the Exertis Supply Chain Services LinkedIn page.

For now, stay at home, stay safe, and let’s plan for how we all recover from this together.

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