Question: Payday Delay
A Distributor Asks: I have a new client who is requesting net 90-day terms. It’s not a huge order (200 t-shirts), but that seems unusually long. My standard terms are prepaying on the first order for new clients. Any suggestions on how to get them to pay in a reasonable amount of time? I want the order, but I don’t want to float that money.
No! If they want those kinds of terms, they are having cash flow problems. If you don’t give other clients 90 days, they shouldn’t get it. I remember the times when a 200-piece t-shirt order looked large; now, not so much. Reading it again also set off the alarm bells that at 90 days, if they still haven’t paid, they may ask for an extension to pay while you are chasing them for the money. Credit card up front, and it better go through. And make sure they don’t call the credit card company and cancel it a week later with whatever excuse they have.
Do not give them 90-day terms! Big red flag here! You will get screwed by this client. If they can’t afford to pay for the order right away, then they shouldn’t be ordering anything.
Alan Baker, MAS
Creative Marketing Concepts
Latham, New York
PPAI 209464, D1
This is a no from me. I invoice with the proof every time and get no push back. I might be OK with a 30-day net for an established client, but 90 days is excessive, especially for a new client.
Two Kids Promotional Products
Palm Harbor, Florida
PPAI 810361, D1
I require prepay from all clients—from my microbusinesses, to my nonprofits, to my international corporations. I found long ago that the big guys who want net 30 terms usually pay net 60 or 90, and the little guys often just can’t come up with the money in 30 days either. Not to mention that, just because you’re huge and recognizable doesn’t mean you’re financially solvent; can you say MCI or Enron?
Rama Beerfas, MAS
PPAI 218331, D4
I would just say “no.” One hundred percent payment upfront always. No terms unless it’s a government/state agency or school district. If it’s one of those, then only 30-45-day net terms.
You’re a small business; you’re not Bank of America.
President and Owner
Fully Promoted Encinitas
PPAI 702575, D2
A Distributor Asks: I got an email from a senior marketing manager of a big firm with nationwide branches, requesting for a credit application as they will be purchasing some high-end tech products for their event in August. They will be spending about $80-100k. I checked, and he and the company he works with look legit.
As a precaution, what other things do I need to do to make sure this is not another scam? I already told him as a new client we will require a pre-payment for the first order.
I do not see any situation that a legit company would line up a job at this cost without wanting to meet and get you approved as a vendor. It’s a scam.
Jersey Girl Promo
Cherry Hill, New Jersey
PPAI 796300, D1
Get a purchase order from the company with all the terms and payment information. There should be a different email to send invoices as most major companies have a separate person handling accounts payable.
VP of Operations
PPAI 304532, D3
It’s a hoax! No company has ever asked me for my credit application—first red signal. Now this “Jeff” has a local number in his signature which he didn’t have last time. There was only an 888 number. I’ve called both and the same guy answers. Sorry, that “huge” company is BS. Funny, I’ve asked him to call me several times. He even emailed me last night at 7:00 p.m., telling me we could chat today—BS! They won’t give you quantities, just $80,000 budget. So many red flags!
PPAI 519818, D2
Do You Have An Answer?
A Distributor Asks: I’ve recently started getting orders from a rather large business. But they didn’t just hand me their entire business, although it seems on the table, considering the previous company they were working with hasn’t been working out. I’m unsure on how to ask them for another product… am I approaching this incorrectly? How can I formally ask for more orders?
A Distributor Asks: Have you been working harder than ever quoting on countless pieces of business only to have prospects not even having the decency to reply to your quote, follow up calls or emails? Are the days of having relationships over?
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Valdez is an associate editor at PPAI.