WE'VE MOVED!

We are proud to announce our NEW community destination. Engage with resident experts and fellow entrepreneurs, and learn everything you need to start your business. Check out the new home of StartupNation Community at startupnation.mn.co
Options

Extending Terms to Retailer Customers

ShoeDadsShoeDads subscriber Posts: 1
edited June 2007 in Business Planning
Hello all!
I`ve just recently launched my company`s web site and will officially announce the company as "open for business" in early July. Right now we are in a "soft launch" mode.
We manufacture our own line of shoe charms for the rubbery shoes like Crocs. So far so good - with little advertising we are barely keeping up with orders. Our business model is to primarily resell via retailers around the world.
I am going to face requests for "terms" and I am wondering what you all suggest for doing credit checks on these retailers. My two main competitors offer terms with a credit application approval.
The opening orders are not huge ($250) so I do not have much at stake (i.e. I am not willing to pay an arm and a leg for a credit check) but I feel some level of due diligence is required.
What experience do any of you have setting up a similar business process? Any credit service companies you`d recommend to help? I can do the easy stuff (BBB check for example) but I`d like to know how to do this for real.
Thanks!
DaveShoeDadsDoo-dads for your shoes!
· Share on FacebookShare on Twitter Share on Google+

Comments

  • Options
    GrillCharmerGrillCharmer subscriber Posts: 7
    Dave,
    Welcome to the board!  I have no advice on this topic as I`m a few months behind you but my business model is similar.  I want to thank you for the question.  I am very interested to hear what our peers have to say.  What is your website?
    · Share on FacebookShare on Twitter Share on Google+
  • Options
    ethnicommethnicomm subscriber Posts: 1
    You can have them sign a credit application which provides you with their banking information and several trade references. You can call up the trade references to see if the customer pays on time and if there were any issues that you should be aware of. This gives me a comfort level and I don`t have to pay for formal credit checks.On the credit app, you will also put your payment terms and interest charges for late payments. This hardly gets enforced in my experience as the retailer is "too important" to risk annoying over a late payment. Offering a cash discount for early payment is a good incentive - but build this discount into your price.Aside from your time and creation of the credit app, this is a free solution.NOTE: A quick Google will show you many example of credit apps.
    · Share on FacebookShare on Twitter Share on Google+
  • Options
    ShoeDadsShoeDads subscriber Posts: 1
    My web site is:
    www.shoedads.com</A>
    I wasn`t sure if it was acceptable to post a URL in these forums.
    I am pretty much against any discounts on net terms. My experience is they will pay when they want to (usually at the last minute) and take the discount anyway.
    Since my competitors offer credit right up front, I feel I need to be prepared to do the same.
    Anybody have any "fee-based" services they`d recommend?
    Also - if things go sideways, anyone have suggestions on collection services?ShoeDads2007-6-28 21:21:43
    · Share on FacebookShare on Twitter Share on Google+
Sign In or Register to comment.