Signed, Sealed And Delivered


How much vacation time will you take this summer?
1-2 days 3-4 days 5+ days Zero

Article Tools: Print

| Email

| Add Comment

Share |

Signed, Sealed And Delivered
By: Staff
Issue: 2009apr

A Supplier Asks:
A distributor places a large order on behalf of a retail end user. The supplier meets the target price with a very tight margin. Payment terms are 50 percent upfront with the balance due 30 days after receipt. The supplier receives the order with logo and custom retail packaging, but after the shipment arrives the distributor contacts the supplier and says the customer has delayed delivery by six months. What is a fair way to deal with this situation?
Pete Kelly
President
PrintAll Solutions
UPIC: 7313
We all understand things happen in the trenches, but it is the distributor’s responsibility to explain to his or her client that the order was already placed (not to mention delivered) and payment for the balance needs to be paid. I personally would not hesitate to tell my client that. If the distributor cannot explain it so his client understands then the distributor should pay the supplier.

Marsha Londe
CEO
Tango!
UPIC: TANGOP
Why assume the immediate client response will be adversarial? If this is a logical and financially savvy businessperson, it will be obvious that the delivery timing changed, and, therefore, the payment details should change.

Yes, the distributor is caught in the middle. But he has as much of an obligation to his supplier as to his client and should speak immediately with the client, preferably face-to-face. Explain nicely that the supplier is not a bank and should not finance this delay. In fact, the merchandise has been received at the supplier’s warehouse.

Present this solution: If the client pays the balance within 30 days, then the supplier won’t charge for warehousing. If the client does not pay until receipt, then the supplier will charge for warehousing as well as for financing the order. Keep it simple and create a win-win for all parties.

If the contact is irascible, have a plan B that might involve going to a higher level within the client’s company. Or, if you want to keep the client, finance the balance of the order yourself. The supplier already did you a huge favor by working on a tight margin; now it’s your turn to help.
Terry Mulligan
Owner
Mulligan Marketing
UPIC: MULL0001
Sometimes distributors get confused about their role. If a distributor places an order, he is the customer. He should be responsible for paying according to the terms he agreed to. The fact that the distributor’s customer does not want it for six months is not the supplier’s responsibility.
Remy Fenster
Owner
RJF Marketing
UPIC: RJFMKT10
As a distributor, I feel your pain (and the distributor’s) because it’s a tough spot to be in. But I think this is the distributor’s problem, not yours. You had an agreement with the distributor, not the end user. The distributor should have been in constant contact with the end user as to the status of the order. I find it hard to believe that the end user changed his mind between the day the goods shipped and the day they arrived without any warning. Did the distributor get 50 percent as a down payment?

The problem I foresee, and it’s unfortunate, is what happens in six months when the end user changes his mind and no longer wants the order? If you have a prior relationship with the distributor certainly try and work something out (perhaps 50 percent of the balance in 30 days and another in 60 days), but ultimately you did the job as requested. (I can’t believe I’m siding with a supplier.) It’s not a good situation from either side.

Answer Our Question
A Distributor Asks: How do you use samples during a sales presentation? Do you bring exactly what the client asked for and nothing else? Or do you bring several different options and include multiple price points for each?

What’s your answer? E-mail answers along with your name, title and company name to Question@ppai.org by March 27 for possible inclusion in the June 2009 issue of PPB magazine.

Comments (1)

3/23/2009
Tiffany Sirles (homewoodpromos@bellsouth.net)
company: Homewood Printing & Promotions
title: Owner
"I can't believe that happened! I wouldn't have contacted my supplier as, by that time, it's 'on me'. It would be tough to deal with, but it's not my supplier's fault/responsibility in the least. I always make sure my clients KNOW that once the proof has been approved and the order placed, payment IS EXPECTED at a specified date. They don't have the opportunity to change that date. I've never had any issues this way and hope not to in the future!"

* Name:
* Email:
Company:
* Title:
* Comments: