Standing up a buying group from scratch with the help of Shift Trade

The challenge

Under the previous program, some of the key functions of the buying group were to provide centralised ordering and accounting for suppliers. Suppliers had become accustomed to being able to access a centralised billing process facilitated by Australia Post. Being able to replicate this simplified invoicing process was key to getting broad supplier support for the new entity, so CBG turned to Shift Trade for help.

In addition, since payment had come from Australia Post in the past, suppliers had not felt the need to assess the credit quality of each individual LPO. Once again, this was something Shift Trade could help with.

The solution

Shift worked with CBG to connect with suppliers and onboard them to the Shift Trade platform. With suppliers onboard, Shift Trade was able to centralise billing to create a process that was familiar to all stakeholders.

CBG seamlessly onboarded each LPO using Shift’s digital registration and credit assessment platform. CBG’s dedicated Account Manager ensures credit limits are appropriate for each LPO’s ordering requirements and manages credit limit increases as needed.

Supplier invoices are processed using the Shift platform, with suppliers receiving payment next business day. Shift then direct debits the LPO's nominated bank account at the end of the month, replicating their previous Australia Post process.

An additional benefit for LPOs is that they have the option with Shift to further extend the payment due date or pay in weekly instalments. Shift also manages any collections activity, eliminating risk for CBG and the supplier.

The partnership between CBG, Shift and suppliers has enabled suppliers to benefit from access to hundreds of retail distribution points for their products, a streamlined invoicing process and no credit risk. LPOs can continue buying from a broad range of suppliers while gaining access to more flexible trade terms. This helps them manage cash flow and take advantage of buying opportunities.

The results

Sales growth for CBG has exceeded expectations, with average annual spend per LPO using Shift Trade more than doubling compared to the previous central accounting program.

This is due to CBG partnering with key suppliers to access preferred pricing with regular promotions coupled with Shift Trade’s ability to provide cash flow solutions through the provision of tailored credit.

The program was also boosted by suppliers being comfortable with sending goods to rural and remote LPO sites knowing payment was guaranteed through the Shift platform.

Within 12 months of launch, CBG had agreements with more than 70 specialty suppliers and was servicing more than 350 local post offices. Shift Trade was processing hundreds of invoices each month representing many hundreds of thousands of dollars of purchases.

A final word

With the support of Shift Trade, Central Buying Group has built a thriving business that solves challenges for buyers and sellers alike. The ability to access appropriate credit has boosted purchasing power across the LPO network. This increased buying activity has attracted significant interest from leading specialty suppliers and the resulting virtuous circle has driven significant growth.

I’m not sure we would have been able to get this business up and running without the capability that Shift was able to offer. Centralised and streamlined invoicing was an absolute requirement and that’s what Shift delivered. Working with the team has been an absolute pleasure – they have gone out of their way to provide the support we need.”