Question: Managing The Financials Of Large Orders

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A Distributor Asks: I’ve never had a large order with a client that I couldn’t handle financially. A recent large order may change that. I’m asking everyone, do you ask for 50-percent down on large orders of potentially $40,000 and up? 

Definitely get a deposit. They shouldn’t have any problem with the request.

Alex Lamm
Owner
Corporate Concepts
Jacksonville, Florida 

I think it depends on your client. Are they a large, reputable company? Have them fill out a credit application. Get a deposit that covers your cost. Decide whether, based on the company, if you can give terms or ask for the remainder upon delivery.

Bill Thomson
Owner
Leda Communications
Mississauga, Ontario

Full prepayment in these terms. No one ships items unless you pay for them first. If it is a scam, it will shake out.

Lorinda J. Moya
Owner and Marketing Manager
Lemonade Promo, powered by Proforma

It does not make you look unprofessional to ask for payment. Go out and try to spend $40,000 on anything on credit and see how far you get. Personally, I’d require 50- to 60-percent down to cover costs should something happen, and the balance prior to shipment. 

Rich Graham
Owner
Biggerfish
Dallas, Texas
PPAI 256367, D2

Aside from requesting a deposit from your client, you can also ask the supplier for terms, 50 percent now and 50 percent when the order ships or something agreeable.

Kimberly Ratcliff
Vice President
Direct Effect Inc.
Lehigh Acres, Florida
PPA1 485005, D1

I absolutely will not take a deposit less than the cost to cover production. Period. I also require a payment plan that is firm on the fact they don’t get the product before the balance due is paid. All of my smaller orders (a few grand or less) require 100-percent payment up front. No exceptions. I refuse to offer net30 or accept purchase orders with a promise of payment. I have not lost clients working this way.

Michael Cohen
Vice President
Emunah Graphics
Huber Heights, Ohio

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A Distributor Asks: I recently learned of a scam that involved ordering a high-volume-dollar product and was wondering if anyone had a list of “bewares” when it comes to purchasing requests, and how does your company choose to pass on product requests that seem a little off?

I always pass if I get a gut check, but I’ve been doing this for 21 years. If it looks a little legit, I first check LinkedIn to verify the person is real, then if it still leaves me questioning, I check the company website, and if there’s still a question, I email them back with an extensive “new customer” questionnaire that includes asking how they heard of me so I know who to thank. Usually, by that point, there’s crickets. Most don’t get through to step one though.

Amanda Dye Hueneke
Owner and Manager
Hello Imprint, LLC
Frisco, Texas
PPAI 730141, D2

Be aware that the scammers have the means to create very real-looking websites and that is where you can get scammed. Once you email them back, they now know you are an active email, which can be sold for money, which is why some professionals receive more than one scammer email since the door has been opened. The best bet is to hover over the emails and links, and to never click anything until you are sure it’s real.

Adrienne Barker, MAS
Senior Brand Marketing Manager
HALO
Daytona Beach, Florida
PPAI 758333, D1  

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A Distributor Asks: Lately, we have had more frequent issues with suppliers short-shipping, charging our credit card unauthorized amounts, shipping orders to incorrect addresses and missing deadlines. Yes, these are challenging times, but given that we’re partners in what we provide to our end buyers, these actions erode the trust that we’ve worked hard to build. The real stinger is that many suppliers are asking us to prepay orders, which leaves us no recourse in holding them accountable to deliver as guaranteed. I believe 50 percent to new providers or for larger orders is fair, but in many cases, terms don’t seem to be negotiable. How are you handling these issues?

What’s Your Answer?

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Danielle Renda is associate editor of PPB.