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Tuesday
February 23, 2010 Extend the Olive Branch by Extending Credit TermsFiled under: Guest Blog We all know the recession has wreaked havoc on the industry and made daily business a struggle, but it’s also affected the way suppliers and distributors relate to one another. Any time a company’s bottom line is affected, it can cause unwelcome practices like dried up credit terms. Distributors left high and dry must either pony-up payment beforehand or put down a credit card. Sure it makes sense to ask a distributor with poor credit or new to the industry to pay up-front, but what about all those distributors with an excellent credit score? Suppliers should ask themselves whether or not they can really not afford to help a distributor sell. Recently, ASI surveyed a sample of distributors to see how industry credit and credit terms were affecting their business. A majority of respondents were owners or primary contacts at their company, and 74% said getting good credit terms is a vital part of staying viable and competitive in the marketplace. Distributors spoke out loud and clear. “Even with a very good credit rating, it is almost impossible to get terms for more than $10,000 – and usually lower amounts with suppliers with whom you haven’t done business with recently,” said one. “You’re penalized for not doing consistent business with them. It’s very tough to work without decent credit terms.” Remember, distributors are our industry’s salespeople and suppliers provide the industry’s products. At a time when we rely on each another more than ever to grow, I’d ask suppliers to look long and hard at who they turn down when choosing not to extend terms. It may make more sense to preserve fragile relationships, by offering a proverbial olive branch or line of credit to those who are worthy. It’s easier to maintain a good relationship than it is to go out and make a new one. Suppliers can click here to learn more about checking distributor credit scores through CreditConnect. If you don’t use CreditConnect, try using another industry service so you can find out what a distributor’s credit score is. Distributors can learn more about their industry credit score by sending a message to customerservice@asicentral.com. – Gene Gene Rahill is sales director of ASICreditConnect – reach him here. 3 CommentsLeave a Comment |
Mr. Rahill
Read your commentary on Results from The ASI Credit survey. As a Supplier business owner in this 2010 economy, I look very closely at the ASI Credit Connect ratings that I continually receive. We do reward those Distributors who have credit ratings of 31/45 days or higher with instant open terms. We start out with a moderate credit line, but as long as prompt payments are made, a higher credit will be extended. However, those Distributors with 46/60 days + are not granted open terms. Distributors with poor credit ratings get offended when told that they are not approved for open terms or there open line of credit has been terminated due to slow pay. Distributors need to review their credit rating with ASI on a regular basis so that they are aware of their current rating. The most used phrase is ‘ I can’t pay you until I get paid’. My thought is that if a Distributor doesn’t have at least $500.00 in the bank as working capital, they should not be in business. We are not a banking institution. We must have our money so that we can purchase more material to create product. It’s scary when you see pages of delinquent Distributors on the submitted reports
Have you considered getting feed back from Suppliers?
Regards,
Renee Maxey
We are continually doing business with “New Vendors”. Credit applications have “Personal Guarantee” for credit (which we do not sign). Our company has been in business 88+ years and I believe we have excellent credit. Why do the Distributors insist on this? We choose to use credit card for payment – and these days have to pay the credit card fee of addl. 3% for our merchandise. It is always good to be able to do business with our “Preferred Vendors”! and we are thankful to have them. EQP – YES!!
Net 30 Day Payment Terms Now Offered
from Top Rated Mouse Pad and Counter Mat Supplier
Alpharetta,GA – February 2010 – In response to the recent ASI Credit Survey Results and continuing stellar sales that include sales increases of over 39 percent – ActNow Media, Inc. will add another category to its distributor credit terms. Beginning March 1, new terms of Net 30 Days for qualified distributors are available.
ActNow President and CEO Fred Leamer said, “I know we have lost orders in the past due to our strict credit terms. It is now time to provide greater opportunity to those distributors who have proven they are capable of paying their invoices on time. I look forward to continuing growth and establishing partnerships with new distributor clients these new terms will generate.”
Other favorable terms are available on a case-by-case basis, with the goal of offering the best possible terms to help distributors sell more goods during these difficult times.
ActNow works with ASI Credit Connect, UPIC Credit Watchdog, DUNS, Experian and other business related credit reporting services to insure the new credit terms reward is justified and secure.