WHAT IS TRADE FACILITATION?
Trade Facilitation gives you the benefits and opportunities of having your own legal entity in Russia, without having one. You can use Ahlers’ trading platform to orchestrate your route-to-market and outsource anything from transportation, import, and customs clearance, to order-2-cash operations and local distribution. On top of that, through Ahlers’ shared services set-up, you also have the needed legal, IT, accountancy, and HR capabilities, which you need to manage your business and local operations in Russia, the CIS countries, and Ukraine. Ahlers offers a true, proven, one-stop-shopping solution, which has been tested since 2015 in Russia and CIS and is currently managing +65M€ of turnover per year for multiple international brands. The value we offer is to facilitate your business operations so that you can focus on what you do best: sell your product.
How does it work?
Ahlers acts as your trading partner, who takes the responsibility to manage the import and total supply chain efficiently and transparently. On top of that, we use our trading platform to perform both commercial- and warranty transactions strictly on your behalf. At the same time, you are responsible to define and execute your commercial strategy, meaning you are always in complete control of the entire transaction.
When to use it?
Any company that wants to sell or do business with Russian companies can use it. Whether you have a legal entity and want to expand your business in Russia and CIS, or don’t have a legal entity and work with distributors, we can make you a functional tailored solution that brings your business incredible value. The model is most valuable for companies who want to transparently control their complete route to market, know their end clients and accelerate their sales in Russia and CIS without the burden of managing their own legal entity at all.
At Ahlers Trade Logistics, we facilitate your trade and bring your business value of outsourcing in a way, which differs from any competing models. You can now orchestrate your route to market and focus on your own core business and profitable growth.
The model provides you with 3 options:
1. Simplification and control of the route to market. Focus on investments and strategy instead of operations. By simplifying and centralizing the supply chain function, the complexity of business decreases. By doing this the risk profile is put to one company instead of several distributors. Is also gives the possibility to work with smaller, more specialized distributors since you can create a stock of local goods.
2. Limitation of financial risk and CAPEX possibility.
Sometimes smaller distributors might have an increased financial risk profile or, logically because of their size, might just not have the needed capital to invest in CAPEX. By changing the route to market, you free the distributors of the need to finance the supply chain and as such, they can invest their capital in accelerating sales instead of financing an increasing inventory. This might lead to fewer discussions on payment conditions and better availability of your goods in the market, which catalyzes sales.
3. A scalable logistics and trading platform for market expansion.
By centralizing and streamlining all supply chain activities, you create the platform to generate economies of scale, while at the same time you put the supply chain risk to one company instead of multiple ones. Combined with the supply chain knowledge and regional expertise of Ahlers, this can instantly solve any of the below issues you might have.
- Increased end to end supply chain time, which has led to increased working capital needs and discussions on payment terms
- Decreased quality of stock management and chaotic cooperation with manufacturers HQ, which has led to the loss of sales due to inefficient demand forecasting
- Decreased forecast-& production accuracy at HQ, leading to other inefficiencies
Operational knowledge, service level, and communication
- Strategic decision: By taking control of your route to market and re-focusing your model from sell-in to sell-out, you need more than just logistics, import, and distribution. You need a strategic decision to change the way in which you do business with Russia & CIS.
Ask yourself the questions:
- How will you manage your distributors, pricing, and promotional actions?
· What criteria will you use to evaluate performance for existing and new distributors?
· What resources do you need for this?
This is an internal exercise where we can share our best practices. At the same time, from experience we understand, that most likely you will also need G&A and HR support to manage your local team. Very pragmatically this means that you can use our trading platform and shared services to arrange your local office needs and HR support for local resources you need to hire.
This article is written by Johan Elzes, Business Unit Director, Trade Facilitation and After-Sales