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Distributor cancelled an order and we need to move 30k bags of coffee [updated]

modest.coffee

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Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#41

Post by treeman79 »

georgeburdell wrote: post #3

One thing that irks me about dealing with big businesses, that the post touches on, is payment terms. If I buy an item, I pay for it immediately (or if it’s large enough, a creditor pays for me). Big companies pay with IOUs that say they’ll give you cash later, say 30-90 days from now or after criterion X is fulfilled. They do not care if you’re a small company with poor liquidity. I think it’s absolutely abusive beh…

There are businesses that act as middle man for this.

They’ll pay you say 97% of invoice. They’ll collect as they can

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#42

Post by Xylakant »

jjeaff wrote: post #24
georgeburdell wrote: post #3

One thing that irks me about dealing with big businesses, that the post touches on, is payment terms. If I buy an item, I pay for it immediately (or if it’s large enough, a creditor pays for me). Big companies pay with IOUs that say they’ll give you cash later, say 30-90 days from now or after criterion X is fulfilled. They do not care if you’re a small company with poor liquidity. I think it’s absolutely abusive beh…

I remember in a corporate finance class in college, we did a lot of calculations comparing prepayment to net 30, net 90 terms, etc. The game is to maximize cash flow, though in the end, it doesn't make a lot of difference except in very thin margin businesses. But the general wisdom is to always try to take maximum advantage. I always felt that it is a silly strategy considering that it strains your suppliers, provid…

Groceries is a high capital very low margin business because you need to have all of the things in store before you can sell them, some of them for extended periods. Essentially this reduces the amount of capital you need to upfront and shoves it down to the next in line. The alternative would be to take a loan.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#43

Post by sneak »

CamelCaseName wrote: post #11
georgeburdell wrote: post #3

One thing that irks me about dealing with big businesses, that the post touches on, is payment terms. If I buy an item, I pay for it immediately (or if it’s large enough, a creditor pays for me). Big companies pay with IOUs that say they’ll give you cash later, say 30-90 days from now or after criterion X is fulfilled. They do not care if you’re a small company with poor liquidity. I think it’s absolutely abusive beh…

Yup, and not just that, but they can arbitrarily decide to not pay you until you either give a steep discount or give up pursuing it.

You can arbitrarily decide not to ship until prepayment is received.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#44

Post by maxerickson »

timerol wrote: post #36

Great to see that all of these got sold! The numbers in this story don't exactly line up, in a way that tells a fun and clearly stressful story: (The cases have 6 bags each.) The intro to the blog post mentions 34k bags of coffee actually made. The initial order was thought to be 6k bags of coffee, but was actually 6k cases = 36k bags of coffee. So it looks like some got sold off between the delivery fiasco and the b…

The leftover bags are decaffeinated.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#45

Post by JimtheCoder »

AlbertCory wrote: post #17

Sigh. Big business vs. the little guy. I recall when I took basic accounting, we learned that common payment terms were "2/10, net/30" meaning "2% off if you pay within 10 days, and it's all due within 30 days." So it was common practice to wait 30 days (or more) and still take the 2% off. This is in no way blaming the victim, but "for a total of $216,000 in debt" I would hope I'd just say, "no, we're not doing that.…

"One of those hard calls that nothing in business school can prepare you for."

Do you really need a business school education to see that this was a mess right from the beginning, though?

It sucks for the small business owner, but at the same time...if you sign one of the largest contracts of your businesses life and are not even sure that you are selling individual bags of coffee or cases of bags of coffee...

No business school is going to help that level of dumb...

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#46

Post by spcebar »

wutheringh wrote: post #37

Is this grifting? How did the distributor benefit?

The distributer said, "actually we don't need this much, so either take back this enormous amount of coffee that we know you can't handle or give it to us for free and you can "write it off on taxes," which leaves the coffee company screwed on their loans. When the coffee company says they want to take it back, the big company tries to make them pay an enormous fee. The grift, as I understand it, is in the distributor saying they needed X and then saying they didn't need it and giving them two shitty options for how to proceed.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#47

Post by AlbertCory »

JimtheCoder wrote: post #45
AlbertCory wrote: post #17

Sigh. Big business vs. the little guy. I recall when I took basic accounting, we learned that common payment terms were "2/10, net/30" meaning "2% off if you pay within 10 days, and it's all due within 30 days." So it was common practice to wait 30 days (or more) and still take the 2% off. This is in no way blaming the victim, but "for a total of $216,000 in debt" I would hope I'd just say, "no, we're not doing that.…

"One of those hard calls that nothing in business school can prepare you for." Do you really need a business school education to see that this was a mess right from the beginning, though? It sucks for the small business owner, but at the same time...if you sign one of the largest contracts of your businesses life and are not even sure that you are selling individual bags of coffee or cases of bags of coffee... No bus…

did I not say that?

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#48

Post by carapace »

maxerickson wrote: post #44
timerol wrote: post #36

Great to see that all of these got sold! The numbers in this story don't exactly line up, in a way that tells a fun and clearly stressful story: (The cases have 6 bags each.) The intro to the blog post mentions 34k bags of coffee actually made. The initial order was thought to be 6k bags of coffee, but was actually 6k cases = 36k bags of coffee. So it looks like some got sold off between the delivery fiasco and the b…

The leftover bags are decaffeinated.

If they can't move the decaf it would make good mushroom growth medium.

Re: Distributor cancelled an order and we need to move 30k bags of coffee [updated]

#50

Post by raverbashing »

Eleison23 wrote: post #2

When I was homeless, I found a job with a "call center". Our training consisted of teaching us the cover story and how to handle reactions to it. We began with a joke involving alcohol. Then if they didn't hang up we launched into the pitch: "We just lost our lease on our warehouse, and we've got to move all these pens. You can get them imprinted with your name and phone number for a bargain. What do you say?" I quit…

This sounds like a variation of the toner scam
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