Unable to pay fulfilment centre - account on stop.

[a8star]

I am in an unfortunate situation. I am unable to pay the invoice due to my fulfilment centre so my account is on stop. To cut long storey short. Paypal closed my account due to excessive items not received cases on ebay over the course of 1 and a half months. Paypal are holding a fair sum of money.

My main Business is an online shop which relies on the fulfilment centre.
In the fulfilment centre my stock is not well orgsnised, not in a tracked location nor do they carry out stock takes for me. They have 1 guy who knows where everything is for my account and he went on holiday in July.

I have a lot of stock the warehouse in need of selling for cashflow.

The invoice is overdue and the boss is not willling to do anything until Money is paid.

I have proposed a plan of action to him but he is not agreeing.

I have asked for a stock take but they are not willing to do it until invoice is paid.

I really am stuck as to what to do.

I never signed a contract with the fulfilment centre but on the invoices it states that it is to be paid within 30 days.

Any advice is much appreciated.

 

[JamieM]

It sounds like a difficult situation but if you haven't signed a contract then I don't think he can withhold the stock from you. Are there any terms and conditions on invoices or anything?

It's understandable that they have stopped your service but I think it means your only options are to find a way to pay the outstanding invoice or remove the goods and settle your bill later. Might be tricky in practise but they have no title over the goods.

Regarding Paypal, are they going to release the funds for transactions not affected by item not received issues after a certain amount of time?

 

[a8star]

Yes paypal are going to release the money once all ebay cases are resolved.

I just checked the invoice and there are no additional terms other than the payment due in 30 days.

There are no terms on their website either.

 

[JamieM]

How many cases are there? Were the items with issues sent by the fulfilment centre?

 

[a8star]

After cases are resolved paypal will release money after 30 days. Yes all items with issues were sent from fulfilment centre. I Dont know the exact number of cases. It changes daily with cases closing and 1 or 2 new ones.

 

[YoungMoneyChina]

Sorry to give you some stark advice but....

You need to pay the fulfilment centre and resume your normal selling asap.

Not doing so will certainly limit or even worse, suspend your eBay account and then your on a downward spiral.

I don't know how much your tab is but you have to find a way to pay it and recover the finances from your business later.

Loan from friends, overdraft, credit card? any of these options available?

If you don't do this you will lose this business due to ebay/paypal stepping in.

 

[kulture]

I would have to disagree. You need to remove all your stock from the fulfilment centre and stop using them. They are the ones damaging your business and causing the problem. Indeed I would not pay them until all the disputes are settled as how do you know they have sent out the goods at all. Regardless of whether you have signed the contract or not, if they have given you a contract and you have not objected to it then they can be deemed to be working under it

.Even if there is no written contract there is clearly a contract (verbal in place). Specifically they store your stock, then send it out when you have an order. They charge you for this service and you pay.

Thats a contract.

Now they may well be in breach of this contract if you are getting all these non delivered problems.

I would not pay ANYTHING until you have recovered all your stock and determined EXACTLY what they have and have not sent out.

 

[YoungMoneyChina]

Well yes if removing stock and fulfilling the orders yourself is an option to ride out this rough patch then thats obviously a better option but one that sounds like it won't be available.

Unfortunately from what you have said the orders not being fulfilled is an issue that has arisen by you not paying them, you can't really complain if your account is past due though i do really feel for you and can sympathise that it feels a bit unfair.

If you can remove the stock like the Kulture above has suggested then do this though I would be surprised if they allow you to do this without some lengthy backwards and forwarding.

This is why i suggested paying the balance and getting your orders going again before any long term damage is done.

Time is the issue now, each day you delay orders your damaging your business and putting orders on "stop" until this problem is resolved is losing you income.

 

[a8star]

Well yes if removing stock and fulfilling the orders yourself is an option to ride out this rough patch then thats obviously a better option but one that sounds like it won't be available.

Unfortunately from what you have said the orders not being fulfilled is an issue that has arisen by you not paying them, you can't really complain if your account is past due though i do really feel for you and can sympathise that it feels a bit unfair.

If you can remove the stock like the Kulture above has suggested then do this though I would be surprised if they allow you to do this without some lengthy backwards and forwarding.

This is why i suggested paying the balance and getting your orders going again before any long term damage is done.

Time is the issue now, each day you delay orders your damaging your business and putting orders on "stop" until this problem is resolved is losing you income.

All the orders are fulfilled.

This invoice is for the fulfilled ebay and website orders sent out in July. I dont have any outstanding ebay orders to be fulfilled. All are despatched and received by customers.

My cash is tied up in paypal and in stock in the fulfilment centre.

I want to know if I have any right in removing stock from the warehouse? This move will obviously allow me to free up cash to then pay what is due.

 

[japancool]

I'm with kulture on this - you've had excessive item not received cases, and that is the responsibility of the fulfilment centre. How many cases are we talking about? Have you got proof from the centre that these items have indeed been dispatched?

 

[silvermusic]

I'm probably not going to be popular saying this but I will. PayPal are behaving exactly as they should be and protecting the interests of their buyers. From what you've said so far you need to be VERY careful or you could well find your PayPal account closed and any money they have of yours held for 180 days. You need them more than they need you.

Is the fulfilment company incompetent or have your problems been caused by not paying them? You priority has to be paying the fulfilment company what you owe them and and if they are the problem get your stock out of their.

 

[a8star]

I am not worried about paypal. I have a good line of contact to them. They said 30days once all cases are closed.

I feel the fulfilment centre had some part to play in the item not received cases.

I just need to know whether I am entitled to remove stock and how I would go about doing this.

 

[Lentinus]

The FF guys will not let you take everything as they think they will not get paid

The FF guys will not do any more work until because they have not been paid for the work they have done and it is an extra stick to ensure they get paid.

You cant pay the FF guys as they have all of your stock

The FF guys don't want to sell your stock as that is not their business

You can't sell it whilst they hold it because they wont do any more work etc.

They want to make sure they get paid, you want to pay them but need your stock to do so.

If you can sit down and explain the above to the FF people then perhaps suggest (or let them suggest) a win-win compromise in that either they
a)release enough stock to you so that you can sell it and pay their bill. At the same time the remainder of the stock they hold should be enough to cover their bill if you default.
b) if there is not enough stock value to do a) that they release a small amount for you to sell and you pay off x% of the value of that towards your bill, then a bit more etc.

The alternative is a drawn out legal wrangle (esp without a contract ) that will likely cost you your business, and your sanity. You may need a competent 3rd party to do the sit down if emotions are running high.

 

[kulture]

I am sorry, but what is there to stop the OP turning up at the fulfilment centre and pick up his property. Without a contract what right has the Fulfilment centre got to hold the property? Anything else is theft.

 

[silvermusic]

I am sorry, but what is there to stop the OP turning up at the fulfilment centre and pick up his property. Without a contract what right has the Fulfilment centre got to hold the property? Anything else is theft.

I guess it depends on practicalities. Do they have some way of collecting, transportation and somewhere else to store it. Given they they can't pay the existing debt then probably unlikely?

Seems odd that there's no written contract. These places are normally a minefield of contracts and red tape.

 

[a8star]

The fulfilment centre is local to me 20 minutes away. The stock consists of a few large high value items and lots of smaller items. I could fit the stock in a large van.

 

[IanG]

So what came first? Item not received disputes? Why was this?

 

[japancool]

The fulfilment centre is local to me 20 minutes away. The stock consists of a few large high value items and lots of smaller items. I could fit the stock in a large van.

So go ahead and do it. Like kulture said, they have no right to seize goods in lieu of payment if there is no contract. If you're really concerned that you can't do it, engage a solicitor to go along with you.

 

[a8star]

I just got advice from a solicitor and they said I have not leg to stand on because there is no contract. I am the one in breach of terms of 'Payment to be made within 30days of invoice received".

Involving a solicitor could also trigger them to request a winding up petition against me.

What do you think?

 

[a8star]

So what came first? Item not received disputes? Why was this?

Item not received disputes came first.

 

[14Steve14]

If this was me I would borrow the money from someone and go pay your bill personally using cash and then take your stock away to sell to repay the person you borrowed it from. easy.

 

[HobbyMounts]

You must have had ALOT of item not received complaints for your cashflow to have been affected this much, which doesn't seem normal unless items are being sent late or not at all.

Do you know if this is the case? It might give you some leverage.

 

[japancool]

You must have had ALOT of item not received complaints for your cashflow to have been affected this much, which doesn't seem normal unless items are being sent late or not at all.

Do you know if this is the case? It might give you some leverage.

I think his issue is that Paypal have suspended his account, rather than the actual items not received cases themselves. It doesn't take many for that to happen. From what I've read, a 5% rate will trigger it, possibly less.

 

[Newchodge]

But the reason he cannot pay his account is because the fulfilment centre has been in breach of contract by not properly delivering items.

Surely he needs to sit down with the centre management and discuss what THEY are going to do about this!

 

[japancool]

But the reason he cannot pay his account is because the fulfilment centre has been in breach of contract by not properly delivering items.

Surely he needs to sit down with the centre management and discuss what THEY are going to do about this!

I think the OP is saying he's tried to do that, but they're not prepared to do anything until the outstanding invoices are paid.

 

[Chris34]

Can you not offer to make payment daily based on how many orders are going out on the understanding that in 30 days you will bring the account up to date? That way the fulfillment company keeps making money, you keep your business and your account with them doesn't go any further into the red, it just stays as it is.

I was a third party in a situation just like this about 5 years ago. I was asked to sell the items and split the proceeds between the two at loggerheads and obviously have money for myself for my time. In the end the two barely received a penny, I got peanuts and the rest went to storage costs, Ebay / Paypal fees and postage. The main problem is that when you are trying to sell goods fast you have to sell them way below retail value and often at cost, when you sell at cost you don't tend to see much money for all the effort.

Maybe you should point out that getting something is better than everybody getting nothing and try and come to a compromise that allows you to operate with them at least until the 30 days has lapsed.

Chris.