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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]

#101

Post by lnxg33k1 »

yesfitz wrote: post #63
lnxg33k1 wrote: post #22

Earlier quoted context omitted.

I worked for a web agency a while ago, where they embraced DDD and like the first few meetings with the client were only focused on creating a ubiquitous language and defining common terminology in order to avoid misunderstandings, it takes a bit of bootstrap but it's the best way to work with people who are not technical. Probably food distribution could make some use for it too as far as I can see from the post

Does DDD mean domain-driven design[1]? 1: https://en.wikipedia.org/wiki/Domain-driven_design

Yep

Edit: specifically of this concept https://www.martinfowler.com/bliki/UbiquitousLanguage.html

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

#102

Post by danhodgins »

treeman79 wrote: post #41
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

Exactly, one type is called BNPL (buy now pay later).

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

#103

Post by analog31 »

Ekaros wrote: post #95
analog31 wrote: post #89

Earlier quoted context omitted.

It's worse than that because they will drag out payment after the term has passed. My first job out of school was for a mom-and-pop manufacturing company. I got an inquiry one day from a very well known company, and mentioned it to the boss. He gave me a long lecture about why we didn't work with that industry. They were notorious for stringing their suppliers along and holding them in a sort of debt bondage. I remem…

That to me sounds like we might lose revenue, but at least we are unlikely to lose money.

It becomes a problem if you borrow to pay for tooling & plant in anticipation of getting paid for product. You might lose your shirt.

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

#104

Post by p_j_w »

imroot wrote: post #13
jraby3 wrote: post #7

Earlier quoted context omitted.

That’s more specific to the food business. I run an advertising company and we always take payment in advance and work with several large (publicly traded) companies.

I know of a few retailers that operate on Net 270 terms for their smaller vendors (Looking at you, Home Depot) and Walmart would tell us that they would reset the 'calendar' if we would call and ask for the status of a payment. This was 2003-2006ish, for the record.

>Walmart would tell us that they would reset the 'calendar' if we would call and ask for the status of a payment.

How the hell is this even legal?

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

#105

Post by sdfhbdf »

yesfitz wrote: post #63
lnxg33k1 wrote: post #22

Earlier quoted context omitted.

I worked for a web agency a while ago, where they embraced DDD and like the first few meetings with the client were only focused on creating a ubiquitous language and defining common terminology in order to avoid misunderstandings, it takes a bit of bootstrap but it's the best way to work with people who are not technical. Probably food distribution could make some use for it too as far as I can see from the post

Does DDD mean domain-driven design[1]? 1: https://en.wikipedia.org/wiki/Domain-driven_design

Not OP but judging from context i’m fairly certain yes it does. DDD mess Domain Driven Design in this case.

From my limited experience with DDD it revolves a lot around terminology and right word choice.

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

#106

Post by legitster »

interactivecode wrote: post #84
jjeaff wrote: post #24

Earlier quoted context omitted.

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…

I would love it if the EU or government would enforce equal payment terms for whole company. Lets say a shop wants to have a net 30 terms with their suppliers, then they should also offer net 30 terms for their customers. This would equalize power dynamics. The large corp shouldn’t be allowed to demand immediate payment on one side and then just significantly delay payments on the other side.

I think it would be hard to sell regulators on "make business-to-business more egalitarian at the expense of consumers".

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

#107

Post by jraby3 »

ThunderSizzle wrote: post #18
jraby3 wrote: post #7

Earlier quoted context omitted.

That’s more specific to the food business. I run an advertising company and we always take payment in advance and work with several large (publicly traded) companies.

I don't believe it's "the food business" as much as "suppliers" in general. I know non-food industries that operate this way, and it's common enough that accounting classes I've taken covered some of the basics of these. Advertising or informational industries (e.g. non-tangible goods industries) seem to operate differently, as you've said.

I primarily do direct mail which is tangible. But the margins are thin and postage is such a big part of our cost that if a customer was going to skip payment we’d need 10 new orders to cover the loss.

So it makes sense to never extend credit.

I do think it’s very industry specific and food / retail as one of the worst.

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

#108

Post by agrocrag »

Super happy they unloaded the overstock! What an incredibly stressful time, been there before and it can feel like the world is crumbling.

In a past life, I ran a small business selling lip balm to small grocery / specialty stores. It started small and then with some good ol' fashion cold calling, we got into more and more stores. Eventually direct store sales is too much for a handful of folks to operate (and if your goal is to expand outside of your local region).

The next step (which they are at) was to start working with one of the big distros (I'm guessing for them it was UNFI or KeHE). You eventually get to a point where most buyers at larger store chains (Kroger, Whole Foods, etc.) eventually just want to streamline their ordering, which means moving to a distributor (also the Regional / National buyers for the categories eventually just push that way if your sales are growing rapidly).

Looks like they mentally had gotten to that point and did the right thing, find and expert to take you there.

If I had to guess on how this whole issue actually went down, the broker / consultant negotiated all the terms with the distro and basically they (the biz owners) didn't clearly read the contract details (putting all your trust in the expert without much verification). I was in that same position once and learning the distributors industry terms is tough to figure out without outside resources / guidance. As they write in the post, the broker basically let them down, while they equally leaned on the broker too much for obfuscating industry knowledge.

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

#109

Post by SoftTalker »

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…

I had similar lessons in an intro Accounting class I think, they compared the common "2/10 Net 30" payment terms, where you could take a 2% discount if you paid the invoice within 10 days. Annualized, that's a ridiculous rate of return and you'd be foolish not to do it if you have the cash on hand.

If the terms are simply "net 30" with no early payment discount and no late payment penalty, there is no incentive for the customer to pay on time.

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

#110

Post by meowmeowmoo »

treeman79 wrote: post #41
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

They call this factoring in the trucking industry.
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