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That’s more specific to the food business. I run an advertising company and we always take payment in advance and work with several large (publicly traded) com

by jraby3 4y ago

That’s more specific to the food business. I run an advertising company and we always take payment in advance and work with several large (publicly traded) companies.

georgeburdell 4y ago
I have experience in the semiconductor industry and it operates similarly to what the post described
hgsgm 4y ago
Amazon's retail profit comes from investing the money they postpone paying suppliers until 30+days after the customer pays Amazon.
convolvatron 4y ago
more specific to the physical goods business. if we establish a relationship where I'm regularly ordering merchandise from you - invariably we set up a regular billing cycle w/ a 30 day payment-from-invoice.
imroot 4y ago
I know of a few retailers that operate on Net 270 terms for their smaller vendors (Looking at you, Home Depot) and Walmart would tell us that they would reset the 'calendar' if we would call and ask for the status of a payment. This was 2003-2006ish, for the record.
- p_j_w 4y ago
  >Walmart would tell us that they would reset the 'calendar' if we would call and ask for the status of a payment. How the hell is this even legal?
  - kortilla 4y ago
    By agreeing to it when you go into contract with them.
  - deleted 4y ago
    [deleted]
- chasd00 4y ago
  A tangent but what were you selling if i may ask? I'm developing a little bluetooth device that lots of people in a large hobby would find interesting and was fantasizing about pitching the prototype to a reseller.
hgsgm 4y ago
Amazon's retail profit comes from investor the money they postpone paying suppoiers until 30+days after the customer pays Amazon.
ThunderSizzle 4y ago
I don't believe it's "the food business" as much as "suppliers" in general. I know non-food industries that operate this way, and it's common enough that accounting classes I've taken covered some of the basics of these. Advertising or informational industries (e.g. non-tangible goods industries) seem to operate differently, as you've said.
- memco 4y ago
  Maybe not even suppliers and just organizations. I once offered tutoring services to someone who was working with the VA to get their degree. Since it was a subject outside of their normal scope and I was not a contractor with the VA I had to fill out paperwork and even then it took a year to get approved and paid for the services. Thankfully I wasn’t doing this for a living but as a favor and the person I was working with was very persistent in following up with his have supervisors otherwise I would given up long before.
- jraby3 4y ago
  I primarily do direct mail which is tangible. But the margins are thin and postage is such a big part of our cost that if a customer was going to skip payment we’d need 10 new orders to cover the loss. So it makes sense to never extend credit. I do think it’s very industry specific and food / retail as one of the worst.
  - ThunderSizzle 4y ago
    What is direct mail? If that's rhe equivalent of UPS/USPS, then that's a service, not a tangible good. A tangible good would be something more like a part used in a manufacturing process, which is where the commonality to food comes into play - food tends to have many ingredients that come together into a final product - but anything following this tangible good line, from my experience, will follow these terms. The reason kind of seems to be to give more flexibility to the supply chain. If everyone required payment upfront to get items to shelves or lots for customers to buy, then the risk goes more fully on the last link in the chain. It appears this pattern began to spread the risk to the entire chain.
joshvm 4y ago
Net 30 is how a lot of Switzerland operates. You can buy all kinds of things - as a consumer - on a "pay later" basis. Flights, groceries, appliances, insurance, you name it. It's a level of trust that's pretty unusual in other countries, though you can bet they'll keep chasing you (and there is a national debt register). QR codes have replaced paying in slips, but they'll send you the code in a letter/PDF and you have a month to pay. But from the industry side. At the big corp level this is all handled by some CRM/Oracle/IBM/SAP system and once things have been approved by whatever chain of people need to sign off, the payments are automatically sent out. The flip side is that if someone hasn't approved something, or they're waiting for paperwork unbeknownst to you, you have to wait until they do another run. So you have to nag them. The people who bought the thing from you are probably not the people who will actually pay you.

by jraby3 4y ago

That’s more specific to the food business. I run an advertising company and we always take payment in advance and work with several large (publicly traded) companies.

georgeburdell 4y ago

I have experience in the semiconductor industry and it operates similarly to what the post described

hgsgm 4y ago

Amazon's retail profit comes from investing the money they postpone paying suppliers until 30+days after the customer pays Amazon.

convolvatron 4y ago

more specific to the physical goods business. if we establish a relationship where I'm regularly ordering merchandise from you - invariably we set up a regular billing cycle w/ a 30 day payment-from-invoice.

imroot 4y ago

I know of a few retailers that operate on Net 270 terms for their smaller vendors (Looking at you, Home Depot) and Walmart would tell us that they would reset the 'calendar' if we would call and ask for the status of a payment. This was 2003-2006ish, for the record.

p_j_w 4y ago
>Walmart would tell us that they would reset the 'calendar' if we would call and ask for the status of a payment. How the hell is this even legal?
- kortilla 4y ago
  By agreeing to it when you go into contract with them.
- deleted 4y ago
  [deleted]
chasd00 4y ago
A tangent but what were you selling if i may ask? I'm developing a little bluetooth device that lots of people in a large hobby would find interesting and was fantasizing about pitching the prototype to a reseller.

hgsgm 4y ago

Amazon's retail profit comes from investor the money they postpone paying suppoiers until 30+days after the customer pays Amazon.

ThunderSizzle 4y ago

I don't believe it's "the food business" as much as "suppliers" in general. I know non-food industries that operate this way, and it's common enough that accounting classes I've taken covered some of the basics of these. Advertising or informational industries (e.g. non-tangible goods industries) seem to operate differently, as you've said.

memco 4y ago
Maybe not even suppliers and just organizations. I once offered tutoring services to someone who was working with the VA to get their degree. Since it was a subject outside of their normal scope and I was not a contractor with the VA I had to fill out paperwork and even then it took a year to get approved and paid for the services. Thankfully I wasn’t doing this for a living but as a favor and the person I was working with was very persistent in following up with his have supervisors otherwise I would given up long before.
jraby3 4y ago
I primarily do direct mail which is tangible. But the margins are thin and postage is such a big part of our cost that if a customer was going to skip payment we’d need 10 new orders to cover the loss. So it makes sense to never extend credit. I do think it’s very industry specific and food / retail as one of the worst.
- ThunderSizzle 4y ago
  What is direct mail? If that's rhe equivalent of UPS/USPS, then that's a service, not a tangible good. A tangible good would be something more like a part used in a manufacturing process, which is where the commonality to food comes into play - food tends to have many ingredients that come together into a final product - but anything following this tangible good line, from my experience, will follow these terms. The reason kind of seems to be to give more flexibility to the supply chain. If everyone required payment upfront to get items to shelves or lots for customers to buy, then the risk goes more fully on the last link in the chain. It appears this pattern began to spread the risk to the entire chain.

joshvm 4y ago

Net 30 is how a lot of Switzerland operates. You can buy all kinds of things - as a consumer - on a "pay later" basis. Flights, groceries, appliances, insurance, you name it. It's a level of trust that's pretty unusual in other countries, though you can bet they'll keep chasing you (and there is a national debt register). QR codes have replaced paying in slips, but they'll send you the code in a letter/PDF and you have a month to pay. But from the industry side. At the big corp level this is all handled by some CRM/Oracle/IBM/SAP system and once things have been approved by whatever chain of people need to sign off, the payments are automatically sent out. The flip side is that if someone hasn't approved something, or they're waiting for paperwork unbeknownst to you, you have to wait until they do another run. So you have to nag them. The people who bought the thing from you are probably not the people who will actually pay you.