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Dick’s Sporting Goods offers expedited payments to increase supplier diversity

A quick dive:

  • Dick’s Sporting Goods to Offer Early Payments to Sellers as Part of Broader Supplier Diversity Initiative, Retailer announced last week.
  • The company is expanding its partnership with working capital platform C2FO to accelerate payments to suppliers on select accounts. According to the release, Dick’s will self-fund the early payments and in exchange will ask for a “minimum discount” from retailers.
  • The partnership is part of Dick’s larger commitment to spend $300 million annually in diversified owned and operated businesses by 2025.

Dive Insight:

Dick’s is committed to building relationships with a variety of suppliers, providing minority-owned businesses with access to working capital.

Offering early payment programs to suppliers can help reduce the financial burden. But for a variety of businesses that often struggle to get credit, advance payment plans can bridge an important financial gap.

The existing financial system has “systemic biases related to the underwriting process” that are driving underrepresentation and underfunding, Vice President of Customer Success Jeremy Colwell said in an email to C2FO.

Black-owned firms are 7% less likely to be approved for bank financing than white-owned firms in the Federal Reserve’s 2019 report.

“One of the challenges facing a variety of owned and operated businesses is access to working capital,” Ramon Catania, director of supplier initiatives for the sporting goods retailer, said in the release. “With C2FO, suppliers who work with us will have access to cash sooner to finance their day-to-day operations or expand their business.”

The offer is through C2FO’s Opportunity Marketplace, an early payment program launched last year that offers underserved businesses much lower fixed interest rates. “So far in 2022, C2FO has accelerated more than $2.7 billion in advance payments to businesses around the world,” Colwell said.

Other retailers are also trying to expand supplier diversity initiatives by investing in diverse businesses they own or offering advance payments. In 2021, a technology company HP announced an extended early payment plan with C2FO, for now Best Buy commits to spending $1.2 billion with various suppliers by 2025.

Suppliers are “the most important business assets of companies,” Colwell said. “When companies help their suppliers grow, they strengthen those relationships, can achieve their supply chain diversity goals, increase margins and get better value for money.”

https://www.retaildive.com/news/dicks-sporting-goods-accelerated-payments-supplier-diversity/628964/ Dick’s Sporting Goods offers expedited payments to increase supplier diversity

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