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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]

#271

Post by WesternWind »

xivzgrev wrote: post #98
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…

A brokers main job is to get the deal done. But ostensibly they’re also there to advise and build trust. It’s easier to be a broker if people like working with you and refer you. It sounds like the broker made a mistake on the point around payment terms. I do agree the confusion on “units” should’ve been caught by the roasters, given order $ amount.

Multiple mistakes actually.

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

#272

Post by fbdab103 »

bombcar wrote: post #181
ryoshu wrote: post #171

Earlier quoted context omitted.

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.

I wonder how you could word the contract such that failure to pay on time would be onerous enough that the big company would actually move on it. Something like penalties + legal fees + treble damages or something.

Good luck getting $BIGCORP procurement department to sign off on that deal. Favorable seller terms will be immediately redlined.

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

#273

Post by roflyear »

sizzle wrote: post #157

I see young kids working in pictures, is this legal or gray area for family run small businesses i.e. all hands on deck to help family

Guess you haven't been in a restaurant in the US lately? If their kids aren't at school they are taking orders or bussing (as young as 8yo).

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

#274

Post by WastingMyTime89 »

JackFr wrote: post #152
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…

Am I missing something? I don’t seem to understand how this is a swindle.

That’s because I initially wrote f*ked but thought I would stay polite.

You don’t think being ordered a very large amount of a product then being told months later that actually that was a mistake and you now have to take back the products while not having been paid at any point during the process and having them try to charge you for the costs of storing it and shipping it back to you sounds like a swindle?

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

#275

Post by chadash »

samwillis wrote: post #252
lisper wrote: post #246

Earlier quoted context omitted.

Again, this is not possible unless they were complete morons. At some point they either had some idea of what they were going to be paid, at which point they should have realized that a unit could not possibly be a bag as they were assuming, or they did not, in which case they had no business being in business. There simply is no way to spin this so that this is not 100% their fault.

No one can make that judgment without seeing the paperwork. We don't know how it was written down. Also they are a really small business. 6k bags a year, their old volume, is only 23 bags per day (5 days week, 52 weeks)! Of course they were out of their depth, and very naive to how this all works. It's not fair saying they are morons and don't deserve to be in business though.

> 6k bags a year, their old volume, is only 23 bags per day

They were bigger than this, but still small. They said that 36k bags is about 1.5 years of sales for them, so that's 24k bags/year, or about 65/day (using a 7-day week calculation). 24k bags at $15/bag is $360k/year revenue, which is still quite small, especially if you have employees (and I believe some of these bags were sold through local stores, so that means revenue is less).

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

#277

Post by benatkin »

zuppy wrote: post #232
whoopdeepoo wrote: post #153

Earlier quoted context omitted.

I am guessing the reason this coffee went fast is because it was a good price and the good sob story. Hard to imagine they can continue to pull that off. Fool me once yada yada

I wouldn’t be that sure about the price being good, if we’re talking about specialty coffee, which is a totally different kind of beast than the supermarket coffee. It’s almost a half a year old coffee (time since roast), a great part of the flavor has been already lost. We also don’t know how it has been stored, temperature will also affect the quality. here’s a very deeply technical explanation of this, right from…

I agree. It sounds like modest isn't hottest.

There's likely a lot of lay coffee lovers assuming that since it's vacuum packed it must last a really long time. At least it isn't preground.

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

#278

Post by Ekaros »

dtnewman wrote: post #266
lisper wrote: post #258

Earlier quoted context omitted.

The only circumstance in which "how it was written down" might matter is if what was written down is different from what they said in the blog post. Which doesn't really help. There are only three possibilities: 1. The deal was written down, and it was, as they report, for 6000 units and $250,000 (modulo phraseology) 2. The deal was written down and it was not for 6000 units and $250,000 3. The deal was not written d…

There's another possibility: 4. The initial deal was verbal or even written down, but not in a contractual way. i.e. they get an email saying, hey, we are going to follow up with multiple purchase orders that will total 6000 units When the actual POs (which are more "legally binding" so they won't use ambiguous language or industry jargon) come in, they use language that specifies the exact number of cases + number o…

Add to this it seems they didn't fully understand all of the details of those POs. Like payment schedules, that they can return unsold inventory after certain point and so on.

The distributor likely treated them as some bigger operator that could just supply stuff and have other buyers. Or they just didn't care.

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

#279

Post by eternalban »

lisper wrote: post #245
dtnewman wrote: post #237

Earlier quoted context omitted.

From the article: > June 2022 comes, and the orders for this retailer start coming in from the distributor. This coffee was shipping to five distribution centers so we were receiving multiple orders. The orders were large but we thought we could handle it. Then the orders kept coming, spread apart by days. So it sounds like they had an initial agreement for 6000 units, but the actual purchase orders were coming in pi…

> So it sounds like they had an initial agreement for 6000 units, but the actual purchase orders were coming in piecemeal. What difference does that make? They thought they had a deal to sell 6000 "units" for $250,000. If they had just bothered to divide 250 by 6 they would have immediately realized that a unit could not possibly be a bag, and they would, by their own account, have passed on the deal, and none of thi…

Did they name the distributor? If not, your take on this is compelling. Unless these guys dropped out of middle school to do the startup thing, in which case we now have a good answer for kids in school who ask "But when will I ever need to use this math stuff?" To defend against "grifters", of course.

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

#280

Post by dtnewman »

lisper wrote: post #245
dtnewman wrote: post #237

Earlier quoted context omitted.

From the article: > June 2022 comes, and the orders for this retailer start coming in from the distributor. This coffee was shipping to five distribution centers so we were receiving multiple orders. The orders were large but we thought we could handle it. Then the orders kept coming, spread apart by days. So it sounds like they had an initial agreement for 6000 units, but the actual purchase orders were coming in pi…

> So it sounds like they had an initial agreement for 6000 units, but the actual purchase orders were coming in piecemeal. What difference does that make? They thought they had a deal to sell 6000 "units" for $250,000. If they had just bothered to divide 250 by 6 they would have immediately realized that a unit could not possibly be a bag, and they would, by their own account, have passed on the deal, and none of thi…

You are making the assumption that there's some formal deal for $250k total. I don't think that was ever the case. My guess is that in these negotiations, you tell the buyer that you sell in packs of 6 for say $41/case. They run their numbers and come back to you saying "okay, we have all the info we need and we are going to take 6000 units and the formal POs will come over the next few weeks."
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