Aeyla is an UK-based home goods brand specialising in blankets, pillows and duvets that not only look great but also improve wellbeing. Its collection includes products that reduce anxiety and stress, improve sleep and are gentler on the skin. It needed credit terms that would alleviate cash flow stresses and provide a financial cushion as the business scales up.
Using a major US credit card provider, Aeyla was spending around £60,000 per month on Google and Facebook Ads. Its 44-day payment terms might not sound too bad. But Aeyla has to invest in products upfront, wait for those products to be shipped, and invest its five-figure ad spend to market them.
When sales are made, Aeyla has to wait for payouts from its payment gateways. Klarna, for example, typically holds funds for eight days before releasing them. Against that backdrop, it’s easier to see why Aeyla was keen to extend its payment terms.
Throw into the mix the fact that most of us are thinking about comfy and cosy homeware when the temperature starts to dip, and the seasonal nature of Aeyla’s business creates further cash flow complexity.
Aeyla co-founder Matthew King said: “Even as sales were flying in we were experiencing some cash flow anxiety. That was partly down to the inherent risk of investing in products long before you’ll generate revenue from them, but also because our payment terms exacerbated those risks.”
14 days is a long time in ecommerce. You can make a lot of sales in two weeks — and that’s exactly what Aeyla is now able to do. The extended payment terms give the business some breathing space to drive and receive revenue before its Juni credit bill is due. With 0% interest, it doesn’t cost anything to take a bit longer over making payments.
The additional line of credit and 60-day payment terms also provide a cash flow safety net during seasonal lulls in sales — an extra layer of protection if something unexpected happens during a quiet period.
Aeyla gets 1% cashback on eligible spend with its Juni card. A nice perk, but one that is emphatically below the improved payment terms in Aeyla’s list of priorities.
“Our top priority is payment days,” says King. “For us, it’s all about closing the gap between spend going out and revenue coming in. That’s exactly what Juni has helped us to do.”
With its increased credit line, Aeyla pays for all of its ad spend using its Juni Mastercard. In months when ad spend is lower, the spare credit can be spent on inventory purchases. Aeyla’s suppliers are paid in USD and all of its customers in the UK pay in GBP, so Juni offering IBAN accounts in different currencies is also useful.
King explained: “Like many ecommerce businesses, we absorb the vast majority of our costs for any single item of stock well in advance of making the sale and generating revenue from it. We can now pay our suppliers on time and still have 60 days interest-free before that’s due to Juni. It’s a massive boost for cash flow.”
With continuous cash flow concerns now a thing of the past, Aeyla is putting its increased credit and improved payment terms to excellent use. The business is growing 20% faster than projected year-on-year since onboarding with Juni and is eager to continue to scale.
“Payment days are crucial in and of themselves, but the knock-on effect for scaling the business has been immense,” revealed King. “Increased consistency of cash flow breeds the confidence to grow the business at scale. That process has already started and we’re excited about continuing the journey in the coming years.”
As Aeyla continues to grow, its Juni credit limit will scale up with it to provide ongoing support at the level it needs.
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