When navigating the payments complexities of international trade, it pays to carry a compass (app). Here’s your compass. The first PYMNTS.com X-Border Receivables Report, powered by Flywire, is packed with analysis, data and insights on how global businesses and other organizations are tackling the thorny issue of receiving payments from buyers for their cross-border services. The inaugural issue includes a data-rich look at medically-motivated travel and an interview with American Rhino founder Chris Welles, who discusses the payments complexities of his global clothing venture, which helps protect African rhinos.
In 2009, Chris Welles set out to participate in his first Rhino Charge, an off-road motorsport competition in remote Kenya. Little did he know his impromptu adventure would lead him to switch tracks from his role as an executive recruiter to setting up his own business.
Rhino Charge is comprised of 65 competing teams from around the world racing through 13 coordinate points scattered over 38 square miles. The event occurs in beatup Land Rovers over the course of straight 10 hours, and the winner, as the rules dictate, isn’t the first to finish, but the team that makes it through the points in the shortest distance.
For participating teams, making it to the finish line is about more than just winning — it’s about raising money for critically endangered African rhinos.
Welles, 55, who has raised more than $200,000 in his five stints in the race, had maintained contact with wildlife rangers and conservationists in Kenya. He had also had an idea, and decided it was time to contribute to the cause beyond solely participating in Rhino Charge.
In 2016, Welles launched American Rhino, a fair-trade apparel brand supporting conservation efforts to protect the critically endangered rhinos and other threatened African wildlife.
Since its launch, the for-profit apparel brand has seen double-digit growth and contributed $27,000 in grant money to support rangers of the Maasai Mara National Reserve in Kenya, Welles said, adding the company contributes 10 percent of its profits to support preservation of Kenyan wildlife.
Tackling cross-border sourcing
For American Rhino, what started as a made-in-America operation quickly evolved into a cross-border affair. For the young brand, going cross-border came with one precedent: avoiding materials from Asian countries such as China and Vietnam. Instead, American Rhino initially sourced its t-shirts and hats from Honduras.
“We want to be very careful that we don’t do a lot of sourcing from Asia because [Asian countries] are the ones doing all the poaching and all the illegal activity,” Welles explained. “It doesn’t make a lot of sense to support their economy”
However, sourcing clothes from Honduras and supporting wildlife conservation in Kenya doesn’t really set the company apart. After all, there are many similar brands marketing themselves with an appealing logo and a touching story, he said.
In a quest to stand out, American Rhino invested in repurposing kikoi fabric, a 100 percent cotton wrap typically worn by East African men and women, to make the products that now comprise the company’s catalog, including beach towels, t-shirts, sweatpants and duffle bags, among other items.
And, while the brightly colored kikoi products set American Rhino apart from other brands, working out a deal to source the material and manufacture the products was the hardest part, according to Welles. After an initial denial, which was followed by subsequent rounds of negotiation, the company partnered with a Nairobi-based supplier and three manufacturers to make American Rhino products in Kenya.
“It’s fascinating to meet these guys and develop this supply chain halfway across the world, having no [past] experience with it all,” Welles said.
Receiving shipments and making payments
Keeping the company’s inventory stocked meant working out a payment and cross-border shipping system with built-in scope for manufacturing errors.
“We agreed upon giving them a 50 percent deposit on the products and then the other 50 percent once we received [the shipment] in the U.S. — [meaning] it cleared customs, we inspected it and we accepted the order,” Welles said.
The payments, he added, are wired through Bank of America to suppliers’ accounts at various banks in Kenya and typically take 48 hours to process.
On the shipping front, the company has so far relied on UPS for sending shipments to customers, and on DHL and a Kenya-based freight forwarding company for receiving them from manufacturers.
While importing shipments via air adds about 15 percent to production cost, Welles believes the speed of delivery justifies the spend. Shipping over water would only add 10 percent to the cost, he said, but would take eight to 10 weeks to reach company headquarters in Wakefield, Massachusetts.
The quality of the shipments now almost always meets expectations, Welles said, but that hasn’t always been the case. In the past, he recalled, as the company fine-tuned the quality of its products, it had to reject nearly 10 percent of received stock.
“There were issues with sizing — their medium is not our medium,” Welles explained. “It was about understanding things that are lost in translation between stuff being made there and being worn here.”
While perfecting the details meant being “fairly demanding,” the manufacturers were receptive to American Rhino’s feedback, he added. “If you’re not going to get the right quality, then people are not going to come back and buy it again.”
Though the company is now satisfied with the quality of its products and the efficiency of its supply chain, Welles sees further room for improvement. If suppliers could receive same-day payments from the U.S., it would speed up the company’s supply chain.
Rhinos go international
Much of American Rhino’s consumer base is in the U.S., but every so often the company receives orders from Canada, Europe and the U.K., Welles said. The challenge with processing international orders, he added, has less to do with accepting payments and more to do with finding the right shipping partner.
As the brand continues to gain momentum, it plans to expand to countries such as China and the U.K. to help raise awareness across the globe. According to Welles, American Rhino has already invested in securing domain names for doing business in other countries.
Ultimately, Welles believes all the expansion plans come down to promoting awareness about wildlife preservation and helping save one rhino at a time.
And, perhaps with the advancement of faster cross-border payments, the benefits of fair-trade commerce could even help expedite the preservation of rhinos and other wildlife.
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About The Report
The PYMNTS.com X-Border Receivables Report, powered by Flywire, highlights the most significant developments in cross-border commerce, demonstrating how various businesses and organizations — including marketplaces, educational institutions, healthcare facilities and importers/exporters, among others — are getting paid by suppliers and wholesalers across borders. The bimonthly report spotlights recent challenges across various use cases in the cross-border receivables space, and explains how these developments are being addressed.