A classic concept in business is that “the seller sets the terms”. That means that the seller (the one that has an item or service that you want to buy) sets the terms (the price, the delivery date, the time when payment is due) and the buyer can either accept those terms, negotiate for something that they think is more favorable, or walk away. It’s been done that way for years.
We offer very liberal terms to customers to whom we extend credit. We’ll ship your orders today and give you 30 days to pay. In the business world, that’s called NET 30. We are extended the same terms from our suppliers and the manufacturers we represent, and when things are working as they should we are able to pay them in a timely manner because that’s how our customers pay us.
Recently, we have noticed a really troubling trend among more and more of our customers. Those that have had credit with us for years have started sending us orders with terms of NET 45 or even NET 60 as when they intended to pay us.
They don’t ask for extended terms. They don’t negotiate for a more favorable (for them) payment schedule. They just dictate that the terms have changed.
We regularly reject these orders (Even after 28 years, it is painful to turn down business) and have even had to cut a few long time customers loose. We hate it, but we have no choice.
One or two major players (buyers) who think that they can unilaterally change payment terms has the potential to put a system in jeopardy that really helps drive our nation’s economic engine.
Small business needs to stand their ground and continue to “set the terms”.
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