Prepay for items is this the trend around you???

What this is and seems to be gaining around me. You need a part at auto parts or tractor place, not in stock. You have to pay for it before they will order it. Girl at auto store showed me a whole shelf section that came in the category of someone called in, needed, they ordered and the person never picked up. They called them several times but no luck. Thousands of dollars but not any more!!! Same seems true for repair work small engine places, and others are making you leave a credit card up front. Same old routine they fix item and customer may not pick up for a whole year, if ever. Next is 30 day accounts (you may call them something different.) They are fast going away. Where you go to home building center/lumber yard, etc. charge items and pay once a month. Not now you have to pay upfront like walmart etc. Last is stuff like home heating or plumbing you have to pay for oil, propane before delivery!!! If you want a plumber or other such person they want your credit card before they talk to you. Wondering if it was a trend in your area and how it was received?

Being self employed in my area you pretty well know everyone and you trust,but then there are those that are further away that you do not know and will try you once. Have to protect your self no matter what.

There are very few if any that allow to charge to be paid in 30 day business around here.

Most of the ag suppliers for crop inputs allow to charge but only for the well known regular customers.

But there are no mom,pop stores left around here anymore. All chain stores.

Even some of the ag suppliers are cash before delivery or COD.

Just bought a load of drainage tile and had to give a check before they would unload and I have been doing business with this supplier for several years.

The local coop that supplies fuel, seed and fert. charges to me all the time with a monthly statement.

if you are on the other side you will find out really quick why they doing that, i still have around 20grand to yet be settle by the GOOD paying customers. will be court cases looks like

ZTR I know exactly what you are talking about. I am on the board at our local coop and I see the accounts receivable list every month.

Our credit policy is if you have accounts over 60 days you go on a cash only bases. Works okay but if you have someone who was in good standing and all of a sudden quits paying, they can rack up a lot of charges in thirty days and leave you hanging. We are in small claims court all the time.
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Worst are the LP costumers that are renting the house. Last lp bill is unpaid a lot.

Changed our policy on rentals house. The owner of the property has to sign a waiver that they will cover the bill if the renter fails to pay the bill.

They don't fight this policy to bad cause they don't want the tank empty when the renter moves on and allow the pipes freeze.

I can understand completely about businesses on cash only bases.

I was not complaining about having to pay cash for the tile I was just stating how times have changed.

Sometimes I think we should go to cash only at the coop but how.

When the LP trucks have a set route, with most customers on a keep full bases for economic reasons for our trucks, how do you make it so the customer is there to collect on delivery. A lot of them are on a budget plan where they pay so much every month year around. But those accounts aren't the problem. Some accounts customer does have to bring a check before delivery. Some slip through the cracks and leave us hanging my going to another supplier when they owe us if they own there own tank.

Gary

I live in a rural area where everyone pretty much knows everyone else. Businesses seem to have no problem extending credit to known customers with a good track record. I recently had a new rear tire installed on my M Farmall by the local Coop. It was almost a month before I got the bill, which I paid by return mail.

But, you need to do what you have to with an unknown (or even known) customer. Some 20 years ago when I was Assistant Service Manager for a local GM dealer, the dealer's cousin brought his car in to have some work done. The dealer came back to the service department and laid down the law that it was CASH on the barrelhead before that car left the shop. He must have known his cousin pretty well.

Kind of related to your subject.

Where I work we pick up and deliver stuff from one place to another.
Usually the bill is paid by the shipper on credit.
But if it is not and we have to collect on delivery it becomes a problem.
We do not take cash or personal checks.
Everything needs to be paid with money orders or certified checks.

It is our company policy that even if it is prepaid you sign for it before it comes off the truck.
That does not happen most times.
Heck its hard enough to get them to sign for it without wanting to open the box and check the contents.

One of our drivers got into a big stink a few years ago over this.
Guy did not want to sign for shipment before it came off the truck as he wanted to look it over at ground level to inspect.
Problem started when his employee running the fork lift dropped the large pallet while trying to take it off breaking the freight.
The guy now said that is broken I do not want it and loaded it back on the truck.

My fuel dealer has my credit card and charges twice a month. We get a good discount for doing this. Our building supply has stopped all accounts except contractors. They had many overdue accounts. I put everything on s credit card now. I get a receipt for everything and only have one bill to pay. My wife pays it off every month so don't have to may those high interest rates and get air miles. Just got back from Disney World thanks to Alaska AIR MILES.
Dave

I can understand why a business does not want to stock millions of dollars of inventory, but when they tell me that they can order it, my response is that I can too, and probably for much less.

(quoted from post at 08:37:49 11/27/15) I can understand why a business does not want to stock millions of dollars of inventory, but when they tell me that they can order it, my response is that I can too, and probably for much less.

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Small retail is a declining business. Between the big box stores and the internet ( Amazon ), there isn't any oxygen left in the room.

I have worked for an electronics parts place that sells components and related tools, etc. on a wholesale and retail basis. When I went to work there in 1995 we had a pretty large number of 30 day accounts, over 1000 of them. Most were not all that big, TV shops and small repair centers that bought small amounts at a time. Made sense to have an account where one bill could be paid instead of two or three a day. As far as I know, there were a few delinquent accounts but hardly ever did we get stiffed from non payment. And then it was because someone died or went bankrupt. That has changed over the years. Now we still have those accounts, and will entertain opening new ones. However, the vetting process has changed. Good ole boy tactics have just about gone away. The worst offenders have been old friends of the owner.

Also, more and more customers are using credit cards. Their reasons are varied, but one is the bookkeeping is evidently easier, as indicated by one of the posts here. Many purchases but one bill to pay a month that is easier to track, etc.

20 years ago we had many TV shops here that all together did a lot of business with us. Now there are only two that trade with us, the rest are gone. No rocket science here, TV's aren't repaired much any more. My point is that business and cash flow has changed a lot. Money is too easy to acquire, and lose.

The cash up front references hit home here with us. We also have an area in the back room full of ordered, but never picked up items. It hasn't been too much of a problem yet, but it's a source of irritation. I now size up the situation before ordering a non stocked item. In all likelyhood we will soon have to adopt the same pay in advance policy before ordering. It's funny that about 20% of our unclaimed items back there were paid for up front, and still not picked up. Don't know what's up with that. One person, when finally contacted with a new phone number, said he simply forgot about it, but wondered why we hadn't called him earlier. I don't know about everyone else, but if I paid for something and was waiting for it I would be checking up on it myself.

I know this is kinda long, but it hit home on several levels.

One last thing about freight damages. We ship a lot. We use UPS for the most part, because we are on a "route" and it's much easier. With that said, we always over insure stuff just a bit. The reasons are obvious to those who use them and the other competitors for shipping. We have a camera in the back room to take photos of incoming packages that appear damaged or mishandled. This has been very helpful in recent years. The drivers know us, and often point out damage that might be missed now.

Bottom line: Get used to it. It ain't gonna get better soon.

I do not blame companies for doing this. I sell a service, for those who don't know or don't remember I am a CPA. Some services are notoriously risky in terms of offering credit. The one that comes to mind immediately is business startups. Used to be we would take the information and prepare all the paperwork and client would pickup and pay. About half the time you call them and they tell you they decided not to start a business after all. So now everyone pays up front including filing fees and postage if they want anything mailed for them. It costs me nothing but my time if they don't pay me, but my time is getting in short supply.

That has been the trend here for 20 years or more. Have several thousand dollars worth of crap laying around here from my small engine days that was special ordered and never picked up and all of it is too outdated to be of any use to anyone, or more trouble than it is worth to try to ship it to someone across the country. A lot of this stuff they paid 30% down and still never picked it up. If I were still in business today, any special order would be paid for in full before ordering, any item left after repair more than 30 days would be charged storage for one year and then legal proceedings would be taken to collect or take possession of the item.

Our propane company has an advance purchase option, buy in the summer and they lock in the price with futures contracts then only charge you the lower of your purchase price or actual price. This year propane is down and prepay was only $1.06 per gallon. But if the price drops to $1.05 or below, that is all my account gets charged. I don't know how they do that. A few years ago the prepay was over $2.00 and the price dropped to $1.65 through the winter. $1.65 is all they deducted. Pretty good deal if you have cash up front.

I make brooms, recently bought a lot (for me) of twine for stitching. Company in IL I had never dealt with, they did not want a credit card, said they'd bill me. I smelled a rat because of no prior relationship. They were 45 days getting me a bill, and it was exactly as they had promised. I paid promptly. I hope their trust of others pays them off, it was refreshing.

Gary: what our fertilizer/chemical coop did was 1. either you pay first or 2. they got some kind of charge agreement with farm plan/John DEERE you sign up for, they charge that and you pay it. Coop gets money asap for goods. As far as fuel they are fast doing the same here you have to take in a check or pay over phone by card etc. And last you can put a card on file or in some cases they have an escrow account where the money is at the bank more so for bigger purchaces. Hope this helps.

I don't mind prepaying for special orders. In fact, I will typically offer to prepay. One, it shows them I am serious about making the purchase. Two, it greatly reduces the opportunity for them to add extra charges when it arrives.

What I will not do is pay a contractor up front for labor! None! Being the homeowner, I'm not going anywhere. But the contractor, am I supposed to hand him money so he can drive away to parts unknown? Too many horror stories of dishonest contractors, no recourse if he defaults. If they want the materials prepaid, they give me a list and I go get the materials. Why should I tie up my money just so he can get the mark up?

That farm accounts aren't much of a problem.

It is all those LP accounts. About 2000 customers to deal with.

Gary

I've offered net 30 days on hay and contracting accounts since I was a kid starting out, with a 1.75 per month finance change after 30 days. That ended today, spent the afternoon with a finance company and have partnered with them. All credit goes through them, I get paid in full from the finance company within 7 days customer gets 180 days same as cash.