4 ms·

No one can make that judgment without seeing the paperwork. We don't know how it was written down. Also they are a really small business. 6k bags a year, their

No one can make that judgment without seeing the paperwork. We don't know how it was written down. Also they are a really small business. 6k bags a year, their old volume, is only 23 bags per day (5 days week, 52 weeks)! Of course they were out of their depth, and very naive to how this all works. It's not fair saying they are morons and don't deserve to be in business though.

lisper 4y ago
The only circumstance in which "how it was written down" might matter is if what was written down is different from what they said in the blog post. Which doesn't really help. There are only three possibilities: 1. The deal was written down, and it was, as they report, for 6000 units and $250,000 (modulo phraseology) 2. The deal was written down and it was not for 6000 units and $250,000 3. The deal was not written down. In case 1 and 3 they are morons, and in case 2 they are liars. There are no other possibilities.
- Retric 4y ago
  My guess was one of these being far more likely: 1a) the deal was written down for ~6000 units and X$/bag. 2a) A price per bag was been negotiated and the deal was only estimated at 6000 units, but a total was never explicitly stated as it would depend on actual order. Each actual order is unambiguous and the numbers add up correctly. Remember negotiation, order size, and billing are three different steps. Miscommunication is amazingly easy as people ask clarifying questions like “So you want 6000 units at 7$/bag?” Thinking holy shit 42,000$. And get answered “Yes” by someone thinking 7 * 6 * 6,000 = 252,000$ yea that adds up.
  - lisper 4y ago
    Re-reading the blog it appears that the initial deal was just verbal, and the contractual element was individual purchase orders coming in. Everything seemed OK until they realized that they were getting POs for more product than they expected.
- dtnewman 4y ago
  There's another possibility: 4. The initial deal was verbal or even written down, but not in a contractual way. i.e. they get an email saying, hey, we are going to follow up with multiple purchase orders that will total 6000 units When the actual POs (which are more "legally binding" so they won't use ambiguous language or industry jargon) come in, they use language that specifies the exact number of cases + number of items per case + payment per case + total payment.
  - Ekaros 4y ago
    Add to this it seems they didn't fully understand all of the details of those POs. Like payment schedules, that they can return unsold inventory after certain point and so on. The distributor likely treated them as some bigger operator that could just supply stuff and have other buyers. Or they just didn't care.
- deleted 4y ago
  [deleted]
chadash 4y ago
> 6k bags a year, their old volume, is only 23 bags per day They were bigger than this, but still small. They said that 36k bags is about 1.5 years of sales for them, so that's 24k bags/year, or about 65/day (using a 7-day week calculation). 24k bags at $15/bag is $360k/year revenue, which is still quite small, especially if you have employees (and I believe some of these bags were sold through local stores, so that means revenue is less).

lisper 4y ago

The only circumstance in which "how it was written down" might matter is if what was written down is different from what they said in the blog post. Which doesn't really help. There are only three possibilities: 1. The deal was written down, and it was, as they report, for 6000 units and $250,000 (modulo phraseology) 2. The deal was written down and it was not for 6000 units and $250,000 3. The deal was not written down. In case 1 and 3 they are morons, and in case 2 they are liars. There are no other possibilities.

Retric 4y ago
My guess was one of these being far more likely: 1a) the deal was written down for ~6000 units and X$/bag. 2a) A price per bag was been negotiated and the deal was only estimated at 6000 units, but a total was never explicitly stated as it would depend on actual order. Each actual order is unambiguous and the numbers add up correctly. Remember negotiation, order size, and billing are three different steps. Miscommunication is amazingly easy as people ask clarifying questions like “So you want 6000 units at 7$/bag?” Thinking holy shit 42,000$. And get answered “Yes” by someone thinking 7 * 6 * 6,000 = 252,000$ yea that adds up.
- lisper 4y ago
  Re-reading the blog it appears that the initial deal was just verbal, and the contractual element was individual purchase orders coming in. Everything seemed OK until they realized that they were getting POs for more product than they expected.
dtnewman 4y ago
There's another possibility: 4. The initial deal was verbal or even written down, but not in a contractual way. i.e. they get an email saying, hey, we are going to follow up with multiple purchase orders that will total 6000 units When the actual POs (which are more "legally binding" so they won't use ambiguous language or industry jargon) come in, they use language that specifies the exact number of cases + number of items per case + payment per case + total payment.
- Ekaros 4y ago
  Add to this it seems they didn't fully understand all of the details of those POs. Like payment schedules, that they can return unsold inventory after certain point and so on. The distributor likely treated them as some bigger operator that could just supply stuff and have other buyers. Or they just didn't care.
deleted 4y ago
[deleted]

chadash 4y ago

> 6k bags a year, their old volume, is only 23 bags per day They were bigger than this, but still small. They said that 36k bags is about 1.5 years of sales for them, so that's 24k bags/year, or about 65/day (using a 7-day week calculation). 24k bags at $15/bag is $360k/year revenue, which is still quite small, especially if you have employees (and I believe some of these bags were sold through local stores, so that means revenue is less).