A Conversation with Scott Simpson, CEO, BlueTarp Financial
BlueTarp Financial is a B2B credit management company supporting over 2000 suppliers including notable brands such as Winsupply, Northern Tool & Equipment, and Sears Commercial. BlueTarp’s customized B2B credit programs include commercial purchasing accounts and cards, credit funding, risk management and flexible models for billing and collections. The company was founded in 1998 and is based in Portland, Maine.
Scott joined BlueTarp in 2012 as President and Chief Executive Officer. Prior to joining BlueTarp, Scott served as Vice President of Marketing and General Manager at Capital One Home Improvement Finance, an organization focused on equipping contractors with point-of-sale financing to help them close more jobs. In addition to other leadership positions at Capital One, Scott served as Vice President of Small Business Marketing at Vistaprint, an eCommerce leader in customized print and marketing services for small businesses. Scott holds an MBA from the Tuck School of Business at Dartmouth and a BA from The College of William and Mary.
1. Retailers have been outsourcing their consumer private label credit programs for 20 years; however many B2B merchants still manage their credit operations in house. Why is this and do you see it changing?
Most B2B merchants manage credit in-house because there haven’t been outsourced solutions that meet the needs of their customers or provide the flexibility to manage each unique relationship. However, merchants are increasingly seeing their B2B credit processes as costly and clunky in customer experience, and are being pressured by customers to provide more tools, transparency, and self-servicing capabilities.
Merchants either need to build out new capabilities – such as integrated, automated credit decisioning and online account management tools for viewing purchase history, downloading statements, and making online payments – on their own, or partner with a specialist such as BlueTarp to solve challenges like these.
2. How does BlueTarp compete with larger, more established commercial card issuers?
The bottom line is that BlueTarp has invested continuously for 20 years in B2B credit. Larger generalist issuers haven’t. Our sole focus on B2B credit makes a difference. We consistently find merchant dissatisfaction with B2B credit partners driven by limitations with existing programs where we have ready solutions.
Our programs are fully customizable and offer unique customer-by-customer experiences instead of having one default treatment for terms, servicing preferences, pricing, etc. For example, we can enable a merchant to continue managing service and collections for large or unique customers that they want to keep in-house. We’ve solved the ‘black box’ problem of outsourcing by equipping merchants with the ability to see everything that we see and do. Our unifying principle is: what would we want if we were the merchant?
The compelling proof comes from the major brands that have selected us for their commercial credit program – such as Winsupply, Northern Tool & Equipment, CCA Global, Aubuchon Hardware and Sears. Recently, we were selected from among 20 different companies to manage the commercial credit program for a well-known Fortune 500 retail merchant. That program will launch later this year.
3. From your perspective, what are the most interesting vertical markets for B2B credit and payment services? What attributes do you look for?
We are best suited for merchants with $100 million to $1 billion or more in annual B2B sales who have an acute desire to streamline their customer experience, eliminate the service burden from their sales and credit teams, reduce costs through automation, and/or protect themselves from risk. I say ‘acute’ because this needs to be a strategic priority to get the most value out of it.
These attributes can be found in almost any vertical; but we’ve found a strong fit within industrial supply, e-commerce, building supply, and furnishings. We’re continuously learning. I’m sure the list will be much larger a year from now.
4. How is the desired user experience for credit and payments evolving from both the buyer and seller perspective? How are the advancements in technology opening up new ways for BlueTarp to add value?
As consumers, we’ve grown accustomed to having the latest technologies to make our experience simple and easy. Contrast that with the credit and payment experience in B2B: the majority of all B2B payments are originated with a paper invoice sent from the merchant and completed via a handwritten check returned through the mail. It’s not that B2B customers don’t want those advancements… it’s that they haven’t been offered. That’s changing and the demand is getting louder.
Savvy merchants and suppliers recognize convenience and ease of doing business can be powerful differentiators and customer retention tools. That’s where we come in.
Advancements in technology have enabled us to build solutions that are superior to what any one merchant would build on their own. This shows in the robustness of our credit risk models, cash application algorithms, electronic notification capabilities, online account management tools, and the like. It’s not impossible for a merchant to do it on their own – it would just take years and a pile of investment. With BlueTarp, merchants get the benefit of what we’ve already built quickly, while retaining the control and customization they’d have if they did it on their own.
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