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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]

#281

Post by detritus »

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...

I guess it depends upon the type and size of the job in question. A lot of my work is invoiced upon commitment or completion, and in some cases (as with Unilever here) it's simply decided that their terms over-ride that on my invoice somewhere after the event.

I tend to disagree with that mentality.

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

#283

Post by phphphphp »

lisper wrote: post #251
phphphphp wrote: post #238

Earlier quoted context omitted.

the units weren’t purchased, though, it was an order. If we take them at their word that they worked with a broker, then there’s numerous ways this could have happened. For example, the broker could have said “they’ll pay you $x per bag and they need 6,000 units” which would explain the discrepancy. After all, the order was for “units” but what’s ultimately being sold is bags — so there is some translation happening…

> the broker could have said “they’ll pay you $x per bag and they need 6,000 units” That's possible, but unlikely. The whole concept of "bags" just doesn't enter into it in a wholesale transaction. But even if this did happen, they could have avoided the problem by clarifying: "So that's a total of $X, right?" Also, at some point this deal should have been put in writing, at which point, again any ambiguity should ha…

it’s absolutely their fault in many ways, I don’t dispute that, but I absolutely dispute the idea that this must be a grand conspiracy to trick people into buying coffee with an impossible story.

They were dealing with a broker who is responsible for getting a deal done, the broker has no investment in the intricacies of the deal, so it’s totally plausible that the broker was saying whatever was necessary to get the deal done even if that meant providing ambiguous information that could have confused a naive supplier.

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

#284

Post by lisper »

dtnewman wrote: post #280
lisper wrote: post #245

Earlier quoted context omitted.

> 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."

> You are making the assumption that there's some formal deal for $250k total.

No, I'm not. I'm not assuming anything. Here is what they wrote:

"In April 2022, a representative from this distributor reached out to us to see if we would be interested in participating in an online specialty coffee program for a major nationwide retailer. The opening order would be approximately 6,000 “units”."

At this point there are only two possibilities.

1. They asked how much they were going to be paid for these 6000 "units" and on what terms.

2. They didn't.

If they asked, the answer should have immediately clued them in that they were making a false assumption that a unit was a bag. And if they didn't, well, that's still on them.

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

#285

Post by ChuckMcM »

WesternWind wrote: post #271
xivzgrev wrote: post #98

Earlier quoted context omitted.

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.

Or optimistically, multiple lessons learned.

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

#286

Post by TillE »

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.

That's within the realm of possibility for a kilogram of really fancy coffee.

Though these bags are only 340g.

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

#287

Post by lisper »

phphphphp wrote: post #283
lisper wrote: post #251

Earlier quoted context omitted.

> the broker could have said “they’ll pay you $x per bag and they need 6,000 units” That's possible, but unlikely. The whole concept of "bags" just doesn't enter into it in a wholesale transaction. But even if this did happen, they could have avoided the problem by clarifying: "So that's a total of $X, right?" Also, at some point this deal should have been put in writing, at which point, again any ambiguity should ha…

it’s absolutely their fault in many ways, I don’t dispute that, but I absolutely dispute the idea that this must be a grand conspiracy to trick people into buying coffee with an impossible story. They were dealing with a broker who is responsible for getting a deal done, the broker has no investment in the intricacies of the deal, so it’s totally plausible that the broker was saying whatever was necessary to get the…

> this must be a grand conspiracy

I didn't say it had to be a conspiracy, only that I find this hypothesis plausible in today's world.

> the broker has no investment in the intricacies of the deal

He certainly does. Brokers don't get paid unless their deals close.

> it’s totally plausible that the broker was saying whatever was necessary to get the deal done

Of course. It's still their responsibility to achieve clarity on what they are signing up for before agreeing. At the very least they should have done a sanity check on the terms and the bottom line.

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

#288

Post by krisoft »

mindslight wrote: post #99
viburnum wrote: post #16

I can't put my finger on it exactly but there's something about this story that isn't making sense.

The obvious reason the details of their story don't make full 100% correct post-facto sense is because they hired someone specifically to facilitate their interaction with the larger market. They trusted this person to get these details right, so that they could focus on their actual business of making coffee. It turns out that person was some kind of incompetent, and they themselves were left holding the bag(s). I'd…

> It turns out that person was some kind of incompetent, and they themselves were left holding the bag(s).

I understand that that is the story they want to tell us. But that story doesn’t add up.

If you are selling anything you need to know at the point of signing the contract how many you need to deliver, for how much each, and what is the total.

Even if the person negotiating completely drops the ball at worst you will realise something is very bad when you look at these three numbers. Either the price you receive will be 6 times as much as you expect, or the count won’t match your expectations, or the total won’t match.

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

#289

Post by fbdab103 »

theptip wrote: post #256
nebulous1 wrote: post #165

Earlier quoted context omitted.

> They agreed a per-unit price. But they thought a unit was a bag, when it was actually a case of 6. So they thought they were getting 6x per bag. The problem with this interpretation is that it would mean that the entire second half of the story would realistically have to be a lie. Once they realized that they were getting 1/6th of what they thought, they would have to find a way to get out of the contract or go bu…

I agree it's weird, but I don't think it's up for debate on interpretation, they quite clearly state it: > The food broker laughed and said “I wondered why you’ve been so upset and concerned. When they said ‘units’, that was cases. They’re right on target so far.” You can imagine how we felt in that moment, realizing that the person we hired to make this a smooth transition and to guide us and to tell us the things w…

Is it possible the original contract was something like $x/kg as a sort of open-ended contract with at least 6,000 units to be shipped?

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

#290

Post by golem14 »

irjustin wrote: post #217
golem14 wrote: post #183

Earlier quoted context omitted.

Yes, that is right. I'm not saying that the OP was blameless. I don't understand why the first thing they did after the discovering the issue was to hound the distributor and try to renegotiate payment terms. I believe the worst would have been to loose 6000 bags, which wouldn't have been too traumatic. Edit: I haven't seen the specific order. Maybe it was written in a way that priced by bag but somehow requested UNI…

> Maybe it was written in a way that priced by bag but somehow requested UNITS in a way that the total order volume in USD wasn't clear. If the price was listed per bag as $6.83/bag (assuming 6 bags/case) and the PO said 6,000-units, that's the "best light" scenario for the OP I can come up. There are literally zero other numbers (no totals, no total dollar value) and the only difference is in the "units" which could…

I'm with you all the way – but I would still like to understand how they could get it so wrong.
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