4 ms·

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 accoun

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.
  - jraby3 4y ago
    Direct mail is junk mail. I help the dentist, roofer or gym in an area send advertising snail mail to the homes near them. Efile there is a service element, we also print the ad and send it. So it’s definitely also (and primarily) a product business.

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.
- jraby3 4y ago
  Direct mail is junk mail. I help the dentist, roofer or gym in an area send advertising snail mail to the homes near them. Efile there is a service element, we also print the ad and send it. So it’s definitely also (and primarily) a product business.