Given the strength of our presence in the interior design space we thought we might elaborate on one of the more niche elements of our service for UK based sales agents.
As with all our posts we endeavour to ground our discourse with direct examples of current working relationships with businesses and individuals actively engaged in the transactions we're referring to.
Our client is a UK based LLP that has sole distribution and sales rights over the wears of a number of non-UK base furniture, treatments and finishings brands.
As is sometimes the case with those specialising in turn-key interior design services, the partnership supplements it's revenue with commissions generated from the sales of said foreign brands.
Customers are presented with the catalogue of wears by our client and, in this particular case, can view certain key pieces from various collections at the South West London show room of the agent (client).
The customer then pays the overseas company directly, in currency of the overseas company.
Being eurozone based, the brands being presented typically invoice the customer in EUR.
This obviously presents the customer, be they an interior design business or an individual customer, with a foreign currency concern. One which we are only too eager to assist with.
The UK sales agent, our client and the subject of this post, is commissioned by way of a revenue percentage directly from the overseas brand.
Having invoiced in EUR, the brand pays the UK agent in EUR too.
This too constitutes a foreign exchange concern for the sales agent. In this example though, because the agent operates in GBP for the other facets of their business, the EUR commissions form a small part of their overall revenue. Therefore they needn't realistically maintain their own foreign foreign currency account, especially given that, as their broker, we can provide this facility.
The agents relies on our services to collect, or serve as collector, of those commissions.
By incorporating our segregated client trust account details in their own invoices the agent can present their overseas supplier/brand with our bank details as if they were their own.
All that we ask for the UK agent is that an invoice outlining the commission due to be received be provided to us in advance of funds being transmitted to us.
So sporadic might these sales be and such is the level of inconsistency that animates the payment time frames from any of the overseas brands - by this we politely mean they rarely pay commission when they say they will - the UK agent can rely on our automated systems to inform them when euros arrive.
This particular agent has asked us to simply flip any euro funds in to GBP the moment they arrive; they're content that our rate will be appealing enough and we make sure not to stray from the margin we have already agreed with them.
So, the agent can rest assured that we will not deviate from our ultra-competitive margin and within a matter of hours of receiving our notification that euros have arrived with us they can look forward to receiving the sterling sum.
In our humble opinion the agent could do more to maximise the GBP yield from the incoming euros, however, looking in to such things more deeply means a change in focus towards a more strategic approach. We don't mind that, in fact, we rather relish it, however, being that the amounts involved and receive as commission are below EUR 1500 generally, the client prefers just to receive the amount instantly...little else matters, much to our frustration.
We have a couple of other examples where interior design businesses actually produce and sell their own designs through concessions and manufacturers located around the world.
Without direct business operations in the territories they're selling, they find it very useful to collect USD, AED and AUD earnings in our appropriately denominated client trust accounts, without charge.
Again, this is an example of how a small UK business can make use of tools and services generally only available to much bigger companies.
Whilst most brokers like Prime Cap will try to shoehorn all manner of interesting and pertinent information in to our discussions with clients...probably because of our own self-importance and a fascination with the sounds of our own voices...setting up a series of guidelines and operating principles for the collection and conversion of funds is the best way to maximise revenue and minimise time spent speaking with pseudo experts.
This is all part of our tailored approach. We focus on optimising revenues through the reduction of exchange rate margin and the removal of avoidable transaction costs.
If this is all you need us for then this is all we shall provide.
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