I figure by that time they've had long enough to get paid by their
customers.
You haven’t been doing enough retailing lately. I pay all of my
small people (engravers, setters, stone cutters) immediately upon
receipt, but I’m lucky if most customers get in to pick up the piece
within 30 days, no matter 10. People seem to be just too busy today,
unless they’re getting married that weekend (and then they were so
busy that they waited until the last minute to order the darn job in
the first place).
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Cambridge, MA 02140
But for an enterprise of that size if they can delay paying
millions of dollars for months at a time, they do, in fact, make a
whole lot more money on their money.
It doesn’t even need to be months. I won’t name the companies
involved, but I once worked with a company who received a draft for a
large job, multiple millions of dollars. The draft was on a bank in
Hawaii, and of course the payer intended to take advantage of a
lengthy “float”. My company actually flew someone to Hawaii to cash
the draft and transfer the funds.
I wonder how that banker reacts when he's paid in 60 days.
This thread has evolved into something else, as threads do…
Department stores are notorious for two things - touting and not
paying their bills. The touting part is building someone up as being
the “next big thing”, getting inventory (lots) based on that, and
then dumping them when it doesn’t take off. And they will tell you
120 days but try to get even that… If you ever get a major dept.
store account it will be a mixed blessing. On the other hand, stores
routinely pay net 30. We send out statements and usually get a check
in a day or two. That’s because they don’t want to write 250 checks
a month for every little invoice, mostly. And it’s routine to let
the customer pay, meaning that if I get a diamond or a $1500
platinum casting, usually they allow time for me to move the item,
and pay everybody, including myself, out of that. But if you’re just
a person who wants work done - pay me. Gold=cash, cash=gold. If you
want a loan, see a bank. Two guys in elevator: “Yeah, you can go in
these shops and have them make your line for you and you can just
float the payment till your line sells and then pay them later.”
Yeah, right, like you’re the first…
I'm lucky if most customers get in to pick up the piece within 30
days, no matter 10.
There may be regional variations on that issue, or it may vary by
the kind of work. I’m a wholesaler who occaissionally has a retail
customer, so I can’t get a good profile. But it’s a moot point. I too
pay my vendors upon reciept and many who would be glad to offer me
terms get paid when I order. It makes bill paying simpler and I tend
not to like to spend money before I have it in my bank account. But
if I’ve got a private customer who wants something expensive, either
costly materials or a lot of labor, I get a deposit, usually 50%. My
retailers have that option, and since I’m only getting about 40%, at
best, of what they’ll get for any labor or materials I charge them
for it seems reasonable that they can pay me within 10 business days.
I ask them to expect me to have thier repairs for 5 business days
after I recieve them, a couple days more if there are parts to
order, sometimes 2-3 weeks on custom work but usually it get it back
to them in a week and a half. But I’ve had my share of deadbeats,
enough to have learned something, and it’s this: they need me more
than I need them, so if I can’t get the respect I need for my
business, they need to go fish. I find that the users, when you’re on
to them, go somewhere else.
Back in the mid 80’s I worked on a remitance processing machine for
a state dept of revenue. Even then they would have daily deposits of
as high as $35 million. If they made the deposit by 10am they got
that days interest. Even that one day was quite a big deal.
That being said, one of the most important things in the gem trade
is the relationships with suppliers etc. Diamond deals are still
done by handshake and woe to any who fail to perform their contract.
I think that unless you you are SprawlMart or TarHucksters, you will
only benefit from paying as agreed.
On custom work I always have money up front. But on repairs, unless
it’s a really big one I usually don’t take anything. Since I’m doing
the custom work myself that isn’t such a problem, but since some
parts of the repair work (I do most of that too) go out that’s the
stuff I tend to front money for well before getting paid by the
customer. I suppose I could start taking deposits on the repairs but
it adds even more paperwork, and it’s easier for when those customers
come in and say I know I paid you for this already when they haven’t
(you’d be surprised how many try this) to always be able to say I
never take any money in up front on repairs.
Daniel R. Spirer, G.G.
Daniel R. Spirer Jewelers, LLC
1780 Massachusetts Ave.
Another thing is, I suggest you never have a "to be filed" pile.
Yikes. Pre-file everything by having a specific spot for it.
Ooh, yes Elaine, that is great advice. Advice I should take, by the
way. My “to be filed” piles (business & personal alike) are
frightening! Actually, ridiculous is a better word for them. Not a
good habit to have gotten into.
I’m curious to hear the other end of this debate… what payment
terms do jewellers who sell to trade offer their customers?
I have several good clients who wouldn’t have ordered from me if I
couldn’t offer them at least 30 days credit. It seems to be the norm
that people demand now. No minimum orders, and free shipping are
other things that I have to offer to keep up with the ‘big guys’.
I have one shop in particular that consistently pays me 30 - 60 days
after the jewellery is sent, but they are buying anywhere from $400 -
1400 a month. I would’t have this work if I demanded COD.
I guess another thing I should note in this thread is that I do
business primarily in the UK and Spain, so it may be different to
others’ experience on this forum. My experience is that in the UK,
cheques still rule, and 30 days is the norm, while in Spain, bank
transfer is king, with the added red/black money issue. All of my
dealings with US companies are paid with credit card.
From a moral standpoint, I’d suggest treating your vendor the way
you would want to be treated yourself. Pay by due date. From a
practical stand point, some day you may need your vendor to make an
extra effort & come through for you in a crunch – and why would
they, if you’ve been treating them shabbily?
I'm curious to hear the other end of this debate... what payment
terms do jewellers who sell to trade offer their customers?
Credit Card to secure order.
Terms given with approved credit & a valid credit card on file.
Agreement signed that credit card will be charged once the account
is 20 days past due. New rules for a new time. I want to be flexible,
but I also want to be paid. I don’t work for free, and I am
nobody’s bank. If someone pays me late- they revert to credit card
payment only. That’s N30 right there. They can pay the fiance
charges on their card for their merchandise.
I have to say that I took offense to your accounts payable
practices,
Angel. I’m not trying to bash you, but I’m speaking the truth. I run
my own business- in fact, I used to run two and I paid all of the
bills on time. If I expect my suppliers to ship to me on time, I pay
my bills on time. I treat them with the same respect that I want to
be treated by my accounts.
If you can’t pay your bills on time, hire someone to come in once a
week for a few hours to do it or put everything on credit cards like
Kimberly suggested. One bill at the end of the month. No brainer… I
try and put as much on a credit card as I can. Easier all around.
It has been my experience that most people who sell their jewelry to
galleries, stores, etc…offer 30 day, net 10 and offer a discount
for proforma (payments upfront when merchandise is ready to ship)
Amery has it right. If the purchaser, be they end purchaser or
vendor wants 30 days to pay, let them put it on a credit card. Pay
me today, I’m not a bank.
It has been my experience that most people who sell their jewelry
to galleries, stores, etc...offer 30 day, net 10 and offer a
discount for proforma (payments upfront when merchandise is ready
to ship)
This is going back a while for me (I graduated from college in 1996),
but I believe the term was more like “2 ten, net 30”…2 percent
discount for those who paid within 10 business days, full due within
30 days. The above terms (which I am reading as 10% discount if paid
within 30 days) seems extremely generous to me…unless I am
misunderstanding? Thanks in advance for correcting me
This thread reminds me of something I once heard from a long ago
friend. She was doing one of the big gift shows and some large
company wanted to pay on terms. She told them, “You’re bigger than
me so you can carry me. When I’m bigger than you, I’ll carry you.” I
don’t know if it worked but I like the attitude.
I don’t work for free, and I am