He said that years ago, Costco approached him about making up several thousand of his pontoon boats to sell in their stores. Problem was, they would advance no money up front for materials, he would have to foot the whole bill, and if he missed the deadline by even one day, they would not take any of his boats. Since he is a pretty small businessman, he decided not to take the chance. I guess this is the way Costco does business.
Sadly Roger, it's not just Costco that does business this way. One of my clients sells nationally not only to Costco but to Kmart, WalMart, Target, and the big-box auto stores as well.
What adds insult to injury is that payment is often net 90 or 120 and a prompt-pay discount on the receivable amount only buys a month or two at best.
Not only does my client need to front the entire shipment, but then they get to wait 3 or 4 months just to get paid. Plus, any merchandise returns are deducted at retail price from the amount payable.
K
