I have the opportunity to purchase a large quantity of a particular product directly from a manufacturer for buyers who are retailers.
I have nowhere near the capital necessary for the purchase. Nor do I have assets I can borrow against.
The retailer is willing to pay the factory directly. But, I want the purchase to happen via me/my company in the middle so I can control the mark-up.
How do I accomplish this?
I would present to the retailer that it would be safer for him to do the transaction through your company as you will act as a trustee / escrow (and of course you really need to do it - meaning you pay a deposit, pay more when you getting confirmation that the products are on the ship/airplane and then the last amount once the products have arrived at the retailer).
There are a few other options which I'd be happy to advise you on.
Good luck
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Answer:
I’m a risk & finance professional with experience in trade finance and international transaction structuring — including how to handle deals when you don’t yet have access to working capital or credit lines.
When you want to act as an intermediary without fronting the capital yourself, you essentially need to structure the transaction through conditional payment mechanisms. A few proven approaches:
1. Back-to-back contract setup:
• Sign a purchase agreement with the manufacturer that is conditional upon payment receipt from your buyer.
• Simultaneously sign a sales agreement with the retailer that mirrors terms, quantities, and delivery schedules.
• You manage the documentation flow and profit from the spread (markup) without holding inventory or advancing funds.
2. Escrow or letter-of-credit structure:
• The retailer deposits the funds into an escrow account or transferable letter of credit (LC).
• Once the factory ships (and provides proof of shipment), funds are released to them, and your commission or markup is automatically deducted.
• This is common in cross-border deals when intermediaries lack collateral.
3. Assignment-of-proceeds or factoring option:
• You can have the buyer’s payment obligation assigned directly to the manufacturer, but under your invoice — preserving your intermediary role.
• Alternatively, a trade-finance company or factoring partner can temporarily front the payment based on your sales contract.
4. Legal / compliance note:
• Even if you don’t handle the funds, make sure you’re listed as the “contractual counterparty” on both sides — otherwise you won’t legally control the margin.
• Depending on jurisdiction, you may need a basic import/export registration or intermediary license.
These models let you stay in control of the markup and relationship flow without requiring heavy capital or collateral.
If you’d like, I can walk you through which model fits your specific deal (country, product type, buyer structure) — happy to go over that in a short call.
