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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]

#171

Post by ryoshu »

chasd00 wrote: post #129
detritus wrote: post #72

Earlier quoted context omitted.

In my experience, the larger the organisation, the longer the presumed payment terms. I've learnt to demand payment in advance, otherwise I'll get caught up pos-hoc in the labyrinthine and entirely cloistered whims of accounts departments who seem to think they're morally-placed to dictate whatever terms they wish. Worst in my experience was Unilever, who simply assumed they could pay in 90 days, which ..er.. rankled…

i've read comments like this before on hackernews. Are the payment terms not on the contract signed? It seems like something you'd really want to understand before starting a project...

They generally are, but if you say net 30 and set a % penalty for not paying in net 30 (common), when a multi-billion dollar corporation decides to do net 90 and won't pay the penalty, what are you going to do as a freelancer? Sue them? The amount of money you spend on legal fees would likely be multiples of the penalty fees. And it would delay payment further. Big corporations rely on this power imbalance.

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

#172

Post by cjbgkagh »

AlbertCory wrote: post #158
cjbgkagh wrote: post #85

Earlier quoted context omitted.

Many people don’t have great options and see such opportunities as possibly their only chance for a big break. They’re playing in the big-leagues and needed the kindness of strangers to bail them out of what appears to be their mistake as going by other comments units as cases are industry standard. That the distributor couldn’t move the product compounded the issue. Supplier/distributor shenanigans are common and so…

It IS a tough call.

I think the real problem is if there starts to be a reliance on the kindness of strangers and more people decide to dig deeper holes for themselves instead of pulling the pin.

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

#173

Post by golem14 »

irjustin wrote: post #159

The coffee producer was expecting a retail chain to pay $41/bag ($250k/6000) I'm glad that they were able to move the bags and save their business and themselves from all this debt, but this red flag needs to be addressed and owned up.

$41 per CASE, not per bag.

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

#174

Post by lisper »

Others have pointed this out, but no one has actually done the math yet, so...

6000 "units" for $250,000 is $41/unit. At wholesale. For a product that retails for $16/bag.

It is just inconceivable that no one noticed this discrepancy. This is not a "grift" by the distributor, this is an elementary and obvious fuckup by the producer.

In fact, it's so elementary and obvious that it would not surprise me a bit if this whole thing turns out to be a publicity stunt that succeeded spectacularly well, at least for a little while, because once the cat is out of the bag all the people who bought that coffee will realize that they are the ones who got played.

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

#175

Post by irjustin »

golem14 wrote: post #173
irjustin wrote: post #159

The coffee producer was expecting a retail chain to pay $41/bag ($250k/6000) I'm glad that they were able to move the bags and save their business and themselves from all this debt, but this red flag needs to be addressed and owned up.

$41 per CASE, not per bag.

That's what it ended up being, but they thought they landed a 250k contract to do 6,000 "units" and they were surprised when those units ended up being cases mid-way through production/ordering.

So, initially, they believed $41/bag....

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

#176

Post by monero-xmr »

dangero wrote: post #87
300bps wrote: post #77

Earlier quoted context omitted.

I was buying a house many many years ago at a time I was self employed. I owned a computer company and my largest client put in an order for 20 computers. They had Net 30 terms with me so I said to them, "I'm very sorry, I am buying a house and can't float the money for 30 days. I can refer you to someone else to buy them from." The general manager of the company told me it was no problem, send the invoice directly t…

Glad they actually paid. I've had similar situations where I'm still waiting for the money 5 years later (I know it's never coming)

Can you sue them? People pretend it’s impossible to sue a large company but that is absolutely false, even for a few thousand dollars.

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

#177

Post by astrange »

reillyse wrote: post #135
interactivecode wrote: post #84

Earlier quoted context omitted.

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.

So I’d sell products to my customers (say bags of coffee) and then 30 days later come by their house (charge their credit card) to collect? This is a terrible idea. Half of the people wouldn’t have the money and your company would become a debt collection agency. You’d be forced to charge at least 3X for the product.

You’re already giving the customers net 30 by accepting credit cards. Offering BNPL/afterpay would be another way to do it.

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

#178

Post by bombcar »

jt2190 wrote: post #126
WastingMyTime89 wrote: post #76

Earlier quoted context omitted.

It’s basically a free short term loan from your suppliers who are eating the inflation instead of you. It does strain your suppliers but if your business doesn’t really need them and you can force them to accept it, why not? As a supplier, payment delay is basically a cost you have to bear to deal with large distributors. It’s a trade off between somewhat predictable volumes and cash flow availability. I would never…

> It’s basically a free short term loan from your suppliers... Honest question: Is this really a free loan, or is it the cost of the load hidden (i.e. the interest charges are not broken out explicitly)? For example, if a supplier has shipped goods with a wholesale prices of USD 100 to a retailer with a net 30 day payment term, I would assume that the USD 100 includes all of the costs associated with that USD 100, in…

Basically, yes. But many businesses don’t break it out as such (you can find by asking if they offer a discount for cash on delivery or even prepay).

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

#179

Post by [deleted] »

lisper wrote: post #174

Others have pointed this out, but no one has actually done the math yet, so... 6000 "units" for $250,000 is $41/unit. At wholesale. For a product that retails for $16/bag. It is just inconceivable that no one noticed this discrepancy. This is not a "grift" by the distributor, this is an elementary and obvious fuckup by the producer. In fact, it's so elementary and obvious that it would not surprise me a bit if this w…

[deleted]

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

#180

Post by lesuorac »

brookst wrote: post #97
lesuorac wrote: post #38

Earlier quoted context omitted.

Where have you been renting that didn't insist on payment up front? Everywhere I've seen you've payed that months rent by the ~5th of that month or they come after you for interest.

Almost like I acknowledged the specific analogy wasn’t great because rent is typically pre-paid. Fine, let’s talk post paid. Electric bills. How you would you feel about an electric company that sent you an invoice and wanted to be paid daily? Yes, yes, the analogy is also imperfect because consumer electric companies can do auto-pay and walmart generally does not for small vendors. But please try to see the point ev…

I would expect the electric company to work like EZPass does where you're expected to maintain a non-negative account balance that they pull money from when you go through a toll and you either periodically top it off by stopping in and paying cash or letting them do so automatically (via direct deposit / CC).

This situations where paying in advanced _every_ time would be cumbersome just means the customer has to maintain a balance. There is also a difference between a business and residence.

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