New Clearbanc Program Protects Online Merchants' Inventory

Clearbanc Offers eCommerce Inventory Protection

Clearbanc is launching an Inventory Protection Program to support eCommerce companies affected by the U.S.-China trade negotiations ahead of the holiday shopping rush, the company said in a press release on Wednesday (Nov. 13).

Because of the tariff negotiations, many Chinese vendors are requiring advanced payment for inventory.

“We’re hearing from many of our portfolio companies that they’re now required to pay 100 percent of inventory costs upfront while Chinese vendors try to safeguard themselves during this uncertain time,” the release said.

Predictions indicate that shoppers will spend over $136 billion in the fourth quarter of 2019, with Black Friday/Cyber Monday (BFCM) accounting for 50 percent of sales. That represents a 13 percent increase from last year.

Since an increasing amount of BFCM shopping is comprised of online orders, Clearbanc said it’s important for eCommerce brands “to front-load inventory sourcing for the holiday season.”

Tariffs on Chinese goods are expected to go into effect on Dec. 15 and will affect over $75 billion in American merchandise.

“Despite delays in the previously planned Oct. 15 tariff hike, the uncertainty around Chinese imports has already created an unstable environment with rippling effects on eCommerce businesses and their customers,” the release said.

Some Chinese vendors are moving away from supplying U.S. companies in an effort to avoid penalties, tariffs and border issues. To help remedy that, Clearbanc is offering “founder-friendly” funding.

Founded in 2015 by Michele Romanow, Andrew D’Souza, Ivan Gritsiniak, Charlie Feng, and Tanay Delima, Clearbanc is headquartered in Toronto, Canada. The company has raised $420 million to date from Highland Capital, Emergence, Founders Fund and Inovia Capital.

Consumers are most concerned with getting good deals around the holiday season, according to a recent study by Deloitte. Purchasing decisions are mostly driven by promotions, according to 81 percent of people surveyed. The study also showed that free shipping is more important than the speed at which an order arrives, according to 85 percent of people.

The National Retail Federation expects a bump in sales for November and December, from somewhere between 3.8 and 4.2 percent. It also said “uncertainty over trade” could potentially harm sales.



The How We Shop Report, a PYMNTS collaboration with PayPal, aims to understand how consumers of all ages and incomes are shifting to shopping and paying online in the midst of the COVID-19 pandemic. Our research builds on a series of studies conducted since March, surveying more than 16,000 consumers on how their shopping habits and payments preferences are changing as the crisis continues. This report focuses on our latest survey of 2,163 respondents and examines how their increased appetite for online commerce and digital touchless methods, such as QR codes, contactless cards and digital wallets, is poised to shape the post-pandemic economy.