In recent years, Costco recognized a challenging working capital environment. Specifically:

• The loan environment for SMBs had been difficult since the financial crisis
• Sources of cash and other alternatives were expensive for Costco suppliers
• Costco’s investment yields on treasuries, commercial paper and bonds were at all-time lows 

This case study illustrates Costco’s strategy in providing a working capital solution for its suppliers, the criteria Costco used to choose C2FO and the overall results generated.

The Challenge

In seeking a new finance program for its suppliers, Costco had the following goals:

• Improve supplier relationships while reducing costs and risks throughout the supply chain
• Use working capital in a more efficient manner
• Reduce internal costs and improve returns on short-term investments 
• Minimize the use of internal resources and generate a fair return on cash
• Provide a program that appeals to most suppliers and meets their funding needs

After exploring options that included invoice factoring and creating an internal program, Costco chose to move forward with a dynamic discounting solution with C2FO.

The Solution

The Costco Early Payment Program through C2FO enabled suppliers to accelerate payment on invoices that they selected, at discounts that worked for them. With the goal of creating a win-win for Costco and its suppliers, the C2FO digital platform allowed suppliers to easily participate and take greater control of their cash flow. They could utilize C2FO to receive early payment from other customers as well. 

The Results

To learn how C2FO’s working capital solutions can benefit your company and supply chain, visit: https://www.c2fo.com/amer/us/en-us/for-enterprises.