Case study: Rhodes Music

Katharine Yacovone

 ยท 12/12/2022  ยท 12/12/2022

๐Ÿ–ฅ๏ธ Website: https://rhodesmusic.com/
๐Ÿ’ผ Industry: Manufacturing
๐Ÿ“ˆ Stage: Small business
๐Ÿ“ Headquarters: UK
๐Ÿ’ณ Product used: Payments

Rhodes Music Group became a global name for electric pianos and synthesisers in the 1960s and 70s. But after the inventor Harold Rhodes' passing, the brand stalled. So when UK-based entrepreneurs Tim Dawson and Matt Pelling took over the trademark in 2019, they hoped to reaffirm Rhodes as a leading name in the musical instrument industry.

"Rhodes is a musical icon that's been sleeping. We're waking it up and bringing it back," says CEO Matt Pelling, "We're trying to instil the Rhodes sound and products into a new generation of music makers."

To manufacture this new generation of Rhodes electric pianos, the team needed to pay suppliers and accept customer payments in various currencies. Revolut Business's multi-currency accounts, FX exchange, and more are helping them make this happen.

Challenge: What were their blockers?

Rhodes Musicโ€™s international brand demanded a global financial structure. Additionally, the supply chain Dawson and Pelling set up, though mainly local to the UK, had two critical pieces shipped in from abroad.

"A couple of the bigger elements, the keybeds of the pianos, are Steinway & Sons, which is probably 10% of the cost of the piano, so we're dealing with a lot of euros," says Tim Dawson, Financial Director of Rhodes.

Apart from the German-based Steinway & Sons, the procurement of electronic components comes from overseas. So Rhodes had to reconcile payments in multiple currencies to pull together finished products.

What was the core issue here? Dawson puts it nicely: "Things in the physical world take much longer than we're used to in the digital world." A lot of hands are involved in pulling a finished product together. It can't happen in a few clicks.

Let's break it down: suppliers need to know the size of an order and when they'll receive payment for it to keep up with production and delivery times. Typically, payments have to happen months in advance to maintain the supply chain. That requires a lot of forward planning, with countless potential roadblocks. And the further the money and goods have to travel, the longer it'll take.

With 50% of their payments going overseas, managing them efficiently was critical to keeping up with their supply chain to start getting their products to customers. In addition, they needed cash in the right currencies to meet payment deadlines and get their orders on time.

At first, the team handled overseas payments by transferring and exchanging currencies through online payment platforms with (typically expensive) exchange rates often as high as 3% per transaction. However, the more fees they paid to transfer currencies, the more they noticed the losses slipping through the cracks. This approach could also take several business days to process, and they felt that efficiency drag.

Luckily, Tim Dawson had a solution in mind, one he'd used in previous companies: enter Revolut Business.

Solution: How did they fix it?

Rhodes Music turned to Revolut Business to handle its international finances, transfer currencies, and make payments globally. They use our FX to exchange currencies quickly at real-time, low rates. They also hold money in several multi-currency accounts for currencies they deal with regularly, which lets them handle international payments without drag time.

With these accounts, they have cash available in the currencies they commonly pay with. Dawson also appreciates how easy and quick it is to convert funds. The fact that the team can move between currencies so smoothly is a huge advantage when paying overseas suppliers for essential parts of their product manufacturing. This approach lets them break down the borders of their business, so there's one less barrier in the way of their production.

On top of paying manufacturers, they use instant payment links to easily carry out sales. By sending customers a link in seconds, they can see earnings in their account often within 25 minutes, bringing all their cash into one place in less time. This helps them maintain their cash flow so they have the funds to convert and pay suppliers. Plus, the team has integrated their Revolut Business account with Xero, so these transactions automatically feed in to reduce time on manual financial admin.

Pelling and Dawson were also happy to share that they were planning to take Revolut Business with them on a promotional tour to America, where they would spread the Rhodes brand while managing spend with Revolut Business debit cards. They'd also take advantage of payment links to sell merch at a convention in California.

Results: What did they get out of it?

Thanks to Revolut Business's low-rate FX and multi-currency accounts, Rhodes Music is saving about 5% on international transfers, a percentage that adds up over time, and that's felt deeply by the self-funded company.

But they save more than money, they're saving loads of time too, which they can refocus on perfecting and sending out their new range of products.

Dawson says, "We save so much time and effort with Revolut Business, because we reconcile everything instantly with our accounting tool. The Xero integration is one of the main reasons we're using Revolut Business. We manage overseas transactions across nine different accounts, and that all gets reconciled instantly in Xero. It's great not to have to do all that accounting manually."

When it comes down to it, Dawson said "It would be a lot more costly to do manually," adding, "we need a service like this to operate."

Want to learn more?
Check out Revolut Business multi-currency accounts on our website to see how this feature can help out your company too. Open your Revolut Business account in minutes to start doing business globally.