A vendor told me my purchase orders were killing their margins and I had no idea

Been doing POs the same way for like 5 years with this one supplier in Cleveland. Never thought twice about it. Last month their sales guy calls me up and says hey man, your net 60 terms are brutal on us small shops. Had no clue they were a 3 person operation. Switched to net 15 with a 2% discount and now they priority ship my stuff every time. Has anyone else ever accidentally screwed up a vendor relationship just by not knowing their situation?

2 comments

2 Comments

singh.blair20d ago

Yeah that's a real thing. I mean it's not even about being bad at business, you just don't know what you don't know until someone tells you. Most small shops are barely keeping their heads above water and net 60 basically means they're fronting your whole order with their own cash for two months. That's brutal when you're a tiny operation. The fact they called you about it instead of just dropping you is actually a good sign they wanted to keep working with you. It's smart you switched to net 15 with a discount, that's a win for both sides. Most people never find out till the vendor just stops taking their calls.

jana_lewis1620d ago

The part about "you just don't know what you don't know" really sticks with me. Here's something nobody's touching on, though. That net 60 thing can actually hurt the small shop's own vendors too. If the shop is waiting on your payment to pay their supplier, and their supplier is giving them net 30, then they're basically stuck covering two months of someone else's inventory with no cash coming in. I've seen it create a domino effect where a little boutique winds up late on their own bills just because they were being nice to a big customer. The discount you worked out sounds fair, but I'd take it a step further and ask if they ever want to push orders back to align with their cash flow better. Sometimes it's not just about paying faster, it's about ordering at the right time so the money lines up naturally.