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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]

#111

Post by buu709 »

asah wrote: post #21

It's 101 that wholesale buyers order by the case and for producers to specify the casecount and price, and for errors like this to be caught when the prices/etc don't line up. This is equivalent to not knowing that URLs can redirect, or that http:// and https:// aren't the same thing. Distributors work with 1000 brands each and don't have time (or margin) to babysit. Also, when a company gets a much larger and differ…

I work in wholesale, but a different industry (electrical) and this is 100% wrong from my experience. Varies from business to business but often times our POs go out for single units rather than cases. It's actually a huge headache for us as we can't get the team responsible to keep our ERP system up to date on which units to use for which lines.

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

#113

Post by JimtheCoder »

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…

"I wouldn't be surprised if they look back on this fiasco as their biggest success in a few years."

Wouldn't that imply that they would be doing even worse in the future?

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

#114

Post by 88913527 »

Enginerrrd wrote: post #91
sva_ wrote: post #54

Earlier quoted context omitted.

> It's 101 that wholesale buyers order by the case and for producers to specify the casecount and price, Not sure why you're being downvoted because thats standard in wolesale. Not sure how they couldn't catch that when looking at the price either. Maybe they thought they'd sell a lot less for the same price and aren't talking about this?

Reading their description, there is no real point in which anyone takes real ownership of this mistake and so something like this is probably likely to catch them again. Did the consultant drop the ball? Yes, but so did they, in a pretty big way. Still, I've run businesses and when you're trying to bootstrap without experience this kind of thing does happen.

If you are unsure to what extent you can or cannot depend on the consultant, you might as well do all the work yourself at that point. They cannot add value to the process; they could have not paid the consultant and worked directly with the grocery distributor.

The addition of the consultant led to a delegative mindset ("I'm paying someone to handle that problem") that ultimately didn't pan out for them.

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

#115

Post by [deleted] »

88913527 wrote: post #114
Enginerrrd wrote: post #91

Earlier quoted context omitted.

Reading their description, there is no real point in which anyone takes real ownership of this mistake and so something like this is probably likely to catch them again. Did the consultant drop the ball? Yes, but so did they, in a pretty big way. Still, I've run businesses and when you're trying to bootstrap without experience this kind of thing does happen.

If you are unsure to what extent you can or cannot depend on the consultant, you might as well do all the work yourself at that point. They cannot add value to the process; they could have not paid the consultant and worked directly with the grocery distributor. The addition of the consultant led to a delegative mindset ("I'm paying someone to handle that problem") that ultimately didn't pan out for them.

[deleted]

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

#117

Post by asah »

buu709 wrote: post #111
asah wrote: post #21

It's 101 that wholesale buyers order by the case and for producers to specify the casecount and price, and for errors like this to be caught when the prices/etc don't line up. This is equivalent to not knowing that URLs can redirect, or that http:// and https:// aren't the same thing. Distributors work with 1000 brands each and don't have time (or margin) to babysit. Also, when a company gets a much larger and differ…

I work in wholesale, but a different industry (electrical) and this is 100% wrong from my experience. Varies from business to business but often times our POs go out for single units rather than cases. It's actually a huge headache for us as we can't get the team responsible to keep our ERP system up to date on which units to use for which lines.

yep. Sadly, the food industry is different and in fact you see big variations across the trade, both in how buyers, sellers, brokers and distributors work.

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

#118

Post by Enginerrrd »

88913527 wrote: post #114
Enginerrrd wrote: post #91

Earlier quoted context omitted.

Reading their description, there is no real point in which anyone takes real ownership of this mistake and so something like this is probably likely to catch them again. Did the consultant drop the ball? Yes, but so did they, in a pretty big way. Still, I've run businesses and when you're trying to bootstrap without experience this kind of thing does happen.

If you are unsure to what extent you can or cannot depend on the consultant, you might as well do all the work yourself at that point. They cannot add value to the process; they could have not paid the consultant and worked directly with the grocery distributor. The addition of the consultant led to a delegative mindset ("I'm paying someone to handle that problem") that ultimately didn't pan out for them.

>The addition of the consultant led to a delegative mindset

That's it right there. I've rarely, if ever, seen that work out well honestly. The consultant has no real skin in the game and so you still always should be doing your due-diligence. They're there to help rapidly guide you to competency, but they won't do that work for you, you really need to be an active participant.

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

#119

Post by daanlo »

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…

In the case of food retailers you also need to consider the time on shelf. To take the coffee example. If any average shop buys 4 cases of coffee (24 bags) and on average sells 2 bags per week, then the last bags will sell after 12 weeks. On avg. it will be 6 weeks (42 days). Product will also spend 1-2 days in transit and might not be unpacked on the floor until 1-2 working days later (so maybe 2-3 days). We can assume payments take 1 day to process. So 46-48 days in total. So 50 day payment terms means they are more or less cash flow neutral. Numbers are made up, but roughly align with my experience of selling other durable food to grocery retailers.

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

#120

Post by renewiltord »

legitster wrote: post #96
asah wrote: post #21

It's 101 that wholesale buyers order by the case and for producers to specify the casecount and price, and for errors like this to be caught when the prices/etc don't line up. This is equivalent to not knowing that URLs can redirect, or that http:// and https:// aren't the same thing. Distributors work with 1000 brands each and don't have time (or margin) to babysit. Also, when a company gets a much larger and differ…

> I would expect any CEO to pickup the phone and talk with peers about how to manage the process. The "Think Different" mentality. I think there are too many CEOs who are only CEOs because they refuse to take advice from others. In this case, all they had to do was literally have a single person on the staff with some experience.

It's a small operation. I doubt they could afford someone on staff for this and similar responsibilities. That's likely why they went with the food broker, expecting that person to consult with them. Many of these people don't work with startups, though, so they're mostly there as rubber-stamp folks and connectors, and can't help consult.

I doubt this is some "I know better" mistake. It's an "I don't know what to do here and I asked someone I think would know but because I don't know, I didn't know how to select that person to ask either" mistake.

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