Large order and credit checks

[RichardFT]

I sell a product and have sales of about 1 per week. Its a low value item and I sell it because I think its great rather than to make a killing. Life is good, it ticks over and I make £1k a year (yes, a year) as a bit of pocket money. I am happy.

However, a large company has requested pricing and terms. Well I usually sell to individuals and they pay in advance.

What sort of terms should I expect to offer the company? I would be happier with payment upfront, I can not afford to outlay £1k and I don't think the stress of non-payment is worth the hassle. It would be nice to have an easy sale, but I am nervous about being bullied and loosing money.

How can I push this forwards? Just take a risk??

 

[Ian J]

Most large companies expect monthly account terms which means that anything you supply and invoice in the month is payable by the end of the following month however in practice most companies take longer to pay than the agreed terms.

Much depends on how much profit you will make and how much they want your product. Most large companies are not geared up to cash on delivery but if they are really desperate, who knows what they might be pushed into doing

 

[Vectis]

If you're just doing this as a way to earn a bit of extra cash, pocket money as you put it, then I don't see why you would want to have any hassle or risk of non payment.

Stick to your Terms, don't make any apology for them, just state them as fact. If the company wants to do business with you they will. If you can take card payment, so much the better. Most large companies will have company credit cards that they can charge the numbers you're talking about to.

If you really wanted to vary your Terms, why not ask for half up front, or enough to cover your costs if it all goes pear shaped? At least then you wont be out of pocket.

For all new customers (and those who we've had problems getting paid by in the past), we've always asked for money in advance. Once you get a history of payment from the client you could consider varying your Terms. We've never had people baulk at paying in advance if they are new and, if they did, I'm not sure we'd want to do business with them anyway!

 

[JamiQ's]

All our business is B2B sales. if you did want to offer payment terms standard is 30days, BUT always take deposit on first order minimum 50% , if they are serious they will have no issues in paying this.

If you wanted payment in full at point of order, most companies will have a purchasing can for instances like this. Do not be afraid to stand your ground on your terms at the end of the day they want your product and if they are a serious buyer then they will work with you.

 

[DontAsk]

First order for us is always a minumum order, payment in advance. Never had anyone complain.

 

[Pish_Pash]

I agree, since this sideline business is for 'pocket money' stick to your guns...if they really want the product, they'll pay upfront (& don't be embarrassed about not offering credit)

 

[Patrick @ BIG in the UK]

I agree with most of what's been said here. If they are serious, they will commit. Just put across in good manner and I'm sure you'll be fine.

I do think the upfront deposit to cover your costs and the remainder in credit would be a good compromise though.

 

[RichardFT]

Thanks everyone for the advice / opinions. I have sent the quote off and now its a waiting game.

 

[PDRD]

Stick to your guns off money up front. If they are a large firm as you say and your talking about £1k of product then that will be small fry to them and they won't even question it.

 

[MOIC]

It depends how good and unique your product is.

If it's available elsewhere, you may need to compete.

Ensure you are comfortable with ALL the terms & conditions.

Look further ahead and they may need to order much more than the initial order.

Good luck.

 

[cjd]

There's a very high likelyhood it's fraud. If you go ahead with this, get full payment up front by bank transfer - no other method.

 

[RichardFT]

Okay, a quick update with this. I have a cheque for the order so I am satisfied that it's all okay. I was nervous, but it has turned out good.

Again, thanks for all your input.

 

[Bob]

Get confirmation from your bank that the cheque has cleared before you part with the goods

 

[cjd]

Okay, a quick update with this. I have a cheque for the order so I am satisfied that it's all okay. I was nervous, but it has turned out good.

Be careful. I'd still definately ask for a CHAPS payment

• Banks consider all incidents of cheque fraud on an a case-by-case basis and take reasonable steps to ensure that cheques are genuine before they are paid, but, generally speaking, if you are an innocent victim of cheque fraud who has had a cheque or chequebook stolen and used fraudulently you will be refunded. However, if you are the victim of a scam because you have accepted a cheque or banker’s draft that turns out to be fraudulent, and you have parted with either goods or services or, in the case of receiving a cheque or banker’s
  draft for an inflated amount, you have paid cash back to the buyer, you are unlikely to be refunded.

http://www.financialfraudaction.org.uk/Consumer-fraud-prevention-advice-cheques.asp