Payment terms changed.....to 120 days??

[dkmc]

Just got an email from a dormant customer. I find it interesting that the tone makes it sound like it's a good
thing for them and their customers. Screw their suppliers....
Time for the small vendors to become their own finance corp I guess?

March 1, 2023 EATON Payment Terms Standardization. To align with our customer expectations, industrial peers and competitors and maintain our business competitiveness, we are continuing to standardize our suppliers’ payment terms to the Eaton standard 120-day term or country maximum allowed. Beginning May 1, 2023, we will change your Eaton pay term to the standard 120-day term or country maximum allowed. This change will apply to all existing open purchase orders, blanket orders, and supplier schedules. For more information about Eaton’s standard pay terms, please review our global purchase order terms on Eaton’s selling to us website. We appreciate the continued opportunity to do business with you and believe this 60-day notice provides adequate time to plan for this change.​

 

[Freedommachine]

This is exactly why I prefer to have 300 small customers over 2 large ones.

Who can wait 120 days for payment? Will they pay interest, or do they expect everyone to give them free loans?

 

[dkmc]

This is exactly why I prefer to have 300 small customers over 2 large ones.

Who can wait 120 days for payment? Will they pay interest, or do they expect everyone to give them free loans?

I have one active customer that a number of smaller vendors were giving 1-2% 10 net 30. They now drag out payments 50-60 days and still take the discount. Then act like it's perfectly OK to do that when called out.

 

[fmari --MariTool-]

Thats a hard no for me. I remember back in the day when I ran a job shop they were one of my customers. This is a tough situation, I really feel for job shops. We had maybe 100-150 customers and most of the time just 10 of those customers gave us 90% of our sales. So if one of those top customers tell change terms on you they have all the leverage most of the time.

Now I have over 40,000 customers the last time I checked. And my top customer gives me .1% of my annual sales. Don't get me wrong, I love all my customers and appreciate everyones business and support. But any deviation from how I want my business conducted and its a hard no. I give very limited terms on a case by case basis. 30 day terms. Late twice and you're done forever, strictly cc going forward. Don't like it, tough.

By the way, I pay all my vendors in 15 days max. I get premium service and anytime I need a favor it gets done. This is how business should be !!

 

[Freedommachine]

Last month I got an unexpected bill from UPS for an import tax from US customs for like $1600.

I wrote them a check and mailed it on what I thought was the 27th day. Turns out it was post marked the 32nd day after the bill was dated... They sent me another bill for $92 in interest and fees!

These large companies draft up air tight contracts that give them immunity. They force everyone else to play by their rules or get out of their sandbox.

I have no problem paying interest or late fees if I violate the terms of a contract but we should all have a right to charge the same.


"standard 120-day term or country maximum allowed"

It should be illegal for them to use a contract clause allowing them to change the payment terms without agreement from both parties. For a company the size of Eaton; 120 day free financing is a huge savings. Inflation alone will show an increase on their books and a loss to their vendors.

Sorry for rambling, this topic just really gets under my skin lol.

 

[CarbideBob]

Payment terms change and the selling prices changes.
You have now taken on the role of a bank and should get paid for doing such plus a normal bank loan profit.
I have 10 day discount, 30 day net and then differing markups on quotes for 2nd day 2nd month, people who pay at 60 and those who run 120.
I cover long payments with my credit line. I pass this loan premium on plus a tad.
You can actually make a small amount of money being the bank.

 

[Mud]

Don't know if this has been posted here before.

 

[lucky7]

Last month I got an unexpected bill from UPS for an import tax from US customs for like $1600.

I wrote them a check and mailed it on what I thought was the 27th day. Turns out it was post marked the 32nd day after the bill was dated... They sent me another bill for $92 in interest and fees!

These large companies draft up air tight contracts that give them immunity. They force everyone else to play by their rules or get out of their sandbox.

I have no problem paying interest or late fees if I violate the terms of a contract but we should all have a right to charge the same.


"standard 120-day term or country maximum allowed"

It should be illegal for them to use a contract clause allowing them to change the payment terms without agreement from both parties. For a company the size of Eaton; 120 day free financing is a huge savings. Inflation alone will show an increase on their books and a loss to their vendors.

Sorry for rambling, this topic just really gets under my skin lol.

I had same thing from UPS once. Actually got a human on phone with them and they instantly reversed charge. Wonder if it’s intentional on their part?

 

[wheelieking71]

Meanwhile: I'm still over here COD on anything that goes out the door.

 

[Richard King]

When I used to work as a contractor for GM the purchasing agents would tell me the terms at 90 days. I would call the Accounts Payable and tell them I was offering 5% immediate, 2% 10 net 30. Acts Payable would chose the 5% discount. They didn't know I had added in 5% into my invoice prior . They thought they were getting a deal. One has to make a few phone calls and get creative.

 

[Mebfab]

And yet, we gwt someone at least every week "how do I start a machine shop"

My buddy bought a big mower and cuts grass. Doing way better...

 

[fmari --MariTool-]

" and believe this 60-day notice provides adequate time to plan for this change".

How tone deaf do you have to be to think this ok????

 

[memphisjed]

Meanwhile: I'm still over here COD on anything that goes out the door.

and a fair number on this site will run over the person or small company with cash in hand to get the bigger company no pay/slow pay customer.

 

[Pete Deal]

The only practical way to do work for such a customer is to add a significant surcharge. And add it as a line item on quotes so it’s visible. They’re basically asking for a short term loan. Charge them for the use of your money.

 

[Comatose]

We've decided to change our standard terms for payment to net never. This will really help unlock value for our shareholders and customers.

But really, we're into the tightening cycle, we'll all see more BS like this in the next year or two.

 

[wheelieking71]

The only practical way to do work for such a customer is to add a significant surcharge. And add it as a line item on quotes so it’s visible. They’re basically asking for a short term loan. Charge them for the use of your money.

And watch the work go bye-bye. Unless EVERYBODY gets on board and does the exact same thing. Which will never happen.
People always tell me: "You need to grow your business". My standard reply: "Bullshit. I get paid when I work."

 

[toolmaker96]

I make it very clear to my customers, as your vendor it is up to me to set the payment terms. As the customer it is up to you to either accept or reject my terms. Should you reject my terms, then we will be unable to do business together.

 

[Zahnrad Kopf]

I make it very clear to my customers, as your vendor it is up to me to set the payment terms. As the customer it is up to you to either accept or reject my terms. Should you reject my terms, then we will be unable to do business together.

This is precisely how we have been operating. Like others, I'm not here to give them loans.

I fired one customer three weeks ago for screwing around with payment. They responded by sending more work. We held their original shipment and all other work until they corrected their behavior. Some take more training than others.

I can say that there has been zero resistance from the other medium to small customers that we have. Every single piece of resistance and challenge has come from the multi Billion dollar corps and I tell them in very plain terms that they can accept our terms or pound sand.

"Choose from the following options to add your gratuity..."

 

[fmari --MariTool-]

I make it very clear to my customers, as your vendor it is up to me to set the payment terms. As the customer it is up to you to either accept or reject my terms. Should you reject my terms, then we will be unable to do business together.

Believe me, its not that easy. Making the choice to struggle with 60 day terms or miss cnc payments can be sobering!! Many times the relationship starts out with 30 day terms. Then they stretch you out to 45 days or 60.

 

[fmari --MariTool-]

Every single piece of resistance and challenge has come from the multi Billion dollar corps and I tell them in very plain terms that they can accept our terms or pound sand.

"Choose from the following options to add your gratuity..."

My experience as well !!