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Gold Coast Gift Boxes and Hampers

To lovers of gift boxes and hampers, we will be blogging about all things gifts. If you are in business, we will also be blogging about subjects that can help your business to prosper. Once in a while, we will be running some special discounts and offers to our beloved customers so be sure to check them out. In the meantime, have a sip with your favourite hot drink and browse our blog posts.

Up front payments or terms of credit.

GC Gift Boxes and Hampers - Sunday, July 01, 2012

The other morning I was sitting at a local cafe, enjoying a coffee before work.  As I looked around the coffee shop I wondered how many of the customers there were business owners like myself. As I sat and contemplated my day ahead, I became aware of two women at another table, having a conversation about a wholesale business owned by one of them.  The matter that they were discussing rather animatedly was regarding payment of goods.

For the sake of this blog, let's call the women in question Summer.  Summer was saying that currently, she only took payments online, cash on delivery or by cheque.  She was also lamenting the fact that many first time customers who began ordering from her, asked to be invoiced with payment terms, from their very first order placed. This is something that she had done on numerous occasions in the past, only to find herself chasing payments from these very same customers.  Summer's point was that she had trusted these people and taken their word at face value, only to have it backfire on her. Summer's solution to this problem has been to only send out orders once payment has been received.

Refusing to offer credit terms has caused some discussion with newer clients who fail to understand why she has taken this line, with many stating that it is the first time that they have come upon this policy.

As a small business owner, I have heard this story before and understand the sentiments expressed by people like Summer.  Small businesses cannot afford to be chasing outstanding debts and often do not have the same resources as bigger businesses, to do this.  However, at times, we are all faced with a client who requests credit terms.

My advice; don't offer credit to a customer unless you have been working with them for a substantial amount of time, have established a good working relationship with them and ensured that their payment history is exemplary. If you are not able to do this, but cannot afford to turn the customer away, ask for a 50% downpayment up front and invoice the remaining 50% payment with invoice terms.  Sometimes this will be enough to get the sale over the line and keep both parties happy.



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