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

We had a local company, division of multinational. They would find a small shop. Promise a lot of business. But come by with some small item.... $300 shaft or such. But want $2-3k in purchased items to go with it such as bearings and such. "OH you Buy it all and we will pay you in 30". Not sure if they screwed anyone. I flat out said here is the MSc catalog. They will sell you all that sstuff directly.
 
We had a local company, division of multinational. They would find a small shop. Promise a lot of business. But come by with some small item.... $300 shaft or such. But want $2-3k in purchased items to go with it such as bearings and such. "OH you Buy it all and we will pay you in 30". Not sure if they screwed anyone. I flat out said here is the MSc catalog. They will sell you all that sstuff directly.
For whatever reason I get "I'd have to order the material in" as one of the reasons my requested lead time can't be met. Typically bar stock or something where a finished part is 100x material cost and I don't need that many. My typical response is "I'll order the material from McMaster, how many feet of bar do you want? It'll be there tomorrow." It tends to cut down on that as a reason, but for whatever reason people almost never take me up on it. Other than being a little pricy is there anything difficult about their material?
 
For whatever reason I get "I'd have to order the material in" as one of the reasons my requested lead time can't be met. Typically bar stock or something where a finished part is 100x material cost and I don't need that many. My typical response is "I'll order the material from McMaster, how many feet of bar do you want? It'll be there tomorrow." It tends to cut down on that as a reason, but for whatever reason people almost never take me up on it. Other than being a little pricy is there anything difficult about their material?
No. We have a few customers that do this all the time. Most likely, they just don’t want/can’t do the lead time and use that as a generic reason.
 
No. We have a few customers that do this all the time. Most likely, they just don’t want/can’t do the lead time and use that as a generic reason.
That’s what I figured, but they often end up agreeing (and meeting) the requested lead.

Similar but different, I usually do get taken up on the offer when offering to have gage pins sent directly to the supplier. That makes a bit more sense though as we have a pretty smooth process with a local distributor.
 
We have told several multi-million dollar companies that wanted extended terms " We have an agreement with XYZ bank, we do not finance businesses and they do not machine parts." Every one decided to pay per our payment terms.
 
We have told several multi-million dollar companies that wanted extended terms " We have an agreement with XYZ bank, we do not finance businesses and they do not machine parts." Every one decided to pay per our payment terms.

I'm guessing by "multi-million dollar companies" you mean real big companies right? Just wondering because "multi-million dollar" doesn't mean much today. A company worth a few mil is a pretty small company.
 
Job shop I worked at was all pay before you pick up. They got screwed on the few exceptions they made.

I'm mildly annoyed that I have to file credit applications and get on net 30 with all of my suppliers. I'd far rather just pay as I place the order.
 
I've had larger corporate customers try to dictate terms... I politely make it clear that "the tail doesn't was the dog" ... accept and abide by our terms or beat feet to our competitors. We also do not tolerate late pay - we give them a 10 grace period and then place on COD and begin collections, with interest. Been successful doing this for the past 60 yrs. Sure, some companies walk, but so what? IMO, we're better off not dealing with them. Never lack for biz; shop is always busier than a pack of blind dawgs in a meat market.
 
Many years ago ,I worked for the Guvmint....in a very minor capacity ........anyhoo ,they used to pay anything out to six months late ......the catch was every contract specified 5% for 14 days payment,and if a discount was lost ,it had to go in a weekly report to the accounts department..........any supplier who stood on his right to deny the discount never got another job .......civil servants have long memories.
 
I used to dislike dealing with big companies .. 20 years ago .. then I learned they don´t really care at all what you bill them as long as it looks good on paper.
The managers hate seeing things like 25% finance charge on a PO .. but could not care less if the part is 25% more expensive due to fuel-oil, weather balloons, surcharge this or that, whatever.

Then just immediately sell, aka factor, the invoice to the nearest bank for about 2%.
If the money is major, I would get credit insurance as well.

Sure, it costs another 2-5%, so what.
The customer is already paying for it ..
 
Coming up on 20 years in business. I've paid for everything up front. Except UPS. They do 30 automatically. I got my first credit card a few years ago.

From what I see, younger folks seem to use significantly less credit than older guys.
I believe young folks are way more into credit debt than older folks.

We use credit cards almost exclusively, even with outfits who add a 3% fee, and we pay as soon as we receive the bill. The banks call us "deadbeats". Our B of A rewards cards can pay up to 5% rewards depending on purchase category. Even Costco gives 4% rebate on gas with their card even though they have the cheapest gas in town. Utility bills go on the cards.

A few percent here and there may sound like chicken feed, it all adds up though.

There was a time back in the day you couldn't use a "normal" credit card for business purchases, no more though.

BTW: banks are getting into brokering CD's so you can get 4.75% on 3 month CD's with FDIC insurance. Good place to park some cash for a short term.
 
We use credit cards almost exclusively, even with outfits who add a 3% fee, and we pay as soon as we receive the bill. The banks call us "deadbeats".

My neighbor is quite the EE and runs his own fab producing RF drivers and matches for the semi-con industry. If you are familiar with semi, you know what that means.
I would link his website, but, don't have his permission. And, it is not that important to make the point.
Just like me, he is hiding well, and you would never know just how serious of an operation hides in that shop behind his house on an acre in Gilbert, AZ.
Anyways, 2017 was a rough year for him. He was thinking about borrowing some mula to keep everything afloat.
He has a few years on me. But, similar situation to where I am now. He owns his place outright (no mortgage).
has no vehicle payments, or credit card debt. Doesn't answer to anybody about $$$.
Also just like me, he uses an Amex to run his place. Starts every month fresh with a zero balance.
When he went to the bank to talk money, he was surprised to find that, he couldn't get shit because no credit is worse than bad credit!
Just one example backing your statement about banks having no respect for us that don't fall in to the NET/debt or worse world of business being absolutely correct.
 








 
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