Sydney, Dec 18: The deleterious effects of COVID-19 on the retail sector was enough to give two seasoned entrepreneurs the ammunition to start a new venture that would address the issue at hand.
Former Catch chief executive, Nati Harpaz, and his business partner, Einat Sukenik saw an opportunity to reimagine wholesaling to retail on a whole new level.
Their online B2B platform business model would become the one that overcame the obstacles caused by buyers being unable to travel interstate or overseas to source stock and the inevitability of delays in deliveries of stock from overseas.
Tradesquare became a saviour for retailers, especially those that were smaller, regional and outside metropolitan areas.
Now as COVID restrictions ease, Tradesquare’s value to these retailers are even greater.
The “great recovery” may have begun for large city retailers.
Smaller outlying retailers have formidable challenges to overcome after two years of extraordinary hardship.
“Some of our retailers have shown incredible resilience just to stay in business,” Harpaz said.
“Fashion stores added cafes and cafes added gift products. One of our clients, a children’s clothing and sporting accessories store in regional Victoria, added goods such as towels, sheets and doonas to its stock when its town lost its Target. Many struggled with the rigours of learning how to function efficiently as an online store for the first time, when neither their technology, nor their marketing finesse were even close to being up to the task,” he said.
That resilience is still being tested.
One of many great challenges now is replenishing stock.
Last year there were empty shelves.
Delivery costs are sky high.
Strikes have created backlogs and there are still delays with supply chains coming from different countries.
There are also unresolved supply problems from overseas.
The manufacturing countries are behind in manufacturing, because there have been vast gaps in production across the last twenty-four months.
And the cost of a lot of stock has increased.
“Christmas stock will cost more for retailers because the increase in demand has been sharp, supply is inadequate and delivery costs have spiralled,” Sukenik explains.
Tradesquare’s model alleviates these problems as it doesn’t rely on overseas deliveries alone.
The company has 600 local suppliers and more than 7,000 plus brands that are ready to ship.
Another current challenge for retailers is cashflow.
After two years of just surviving, financial reserves are at an all-time low.
Unlike other wholesalers and distributors, Tradesquare doesn’t demand upfront payments.
These are prohibitive for many small and regional retailers right now.
It also has a price guarantee.
It will match the price of any item found cheaper elsewhere and it doesn’t matter whether a buyer purchases one item or a thousand as they are still bound to pay the same best possible price.
These ideas didn’t come from a boardroom, alone and came from communicating firsthand with the retailers.
“We were doing something like 800 phone calls a month in our first six months to chat and understand problems such as what products were missing, what people didn’t like about the platform, and what was killing their businesses – what’s the pain point of their business?
“Then we fixed everything,” Harpaz added.
The site also offers its very own buy now pay later (BNPL) TradeSquare’s Net 30 payment terms to help retailers with cash flow during difficult times resulting in fifty percent of the platform buyers utilising such facilities.
Tradesquare still talks to its members to find out the best way to move forward.
“We communicate constantly with our buyers and suppliers,” Harpaz said.
“Then we tell them, this is what you shared with us and this is how we had fixed it. Some of the problems are small. Some can break a business. One like this was uncovered when we spoke to our suppliers. We found that they don’t always favour small business clients because of the credit checks and paperwork needed to bring them on board. So we decided to vet buyers and guarantee payments ourselves. We then pay them within 14 days. This means that sellers don’t have to track payments and risk defaulters and they don’t have to wait 60 to 90 days to be paid. It’s a win-win for both our buyers and our suppliers. We also offer suppliers the option of bringing their own customers onto the platform.
“Those conversations also unearthed that many of its wholesalers were struggling with marketing effectively,” he said.
“They’re manufacturers,” Sukenik adds.
“That’s what they do and what they know,” she said.
“So, Tradesquare can take care of all the marketing for them.
“We actively market our wholesalers under the one umbrella so that they can focus on what they do best,” she said.
“Our customer service is also a significant advantage for wholesalers, providing a link that keeps their relationships strong.”
“We’re Australian entrepreneurs ourselves.
“We understand the challenges.
“We have faced them,” she adds.
“We have lived through the hard knocks of running a business in Australia and come out the other side.
“That’s where we stand apart.
“Australia can be a rugged environment for small businesses.
“The last two COVID years have made it even harsher.”
That understanding and Tradesquare’s business model have been a good alternative for 10,000 small and regional Australian retail businesses since its inception last year, and its business model is proven to work with its business growing by 30 per cent this year, alone.
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