Questions about the first job you do for people online.

[MRZ-Perf]

I was wondering how you guys usually work when a customer award you with his first job?

My question here is more about dealing with a "X" company for the first time... we asume that this cutomer is not close to you, you cannot visit them, only contact is phone or email.

do you COD/paid in advance or wait for the check in the mail box?

I've been dealing with people (particulars or pretty small business) earlier and I was asking for payment in advance or COD. After a few good trabsaction with the person, I gradually ask half the job in advance or COD and the rest at the end of the month like we do with most big business.

Let me know how you guys proceed

Thanks for your inputs

 

[cook]

If it's a new customer I will ask for 1/3 up front or the cost of material if the PO is under $3000.00 over this amount I will ask for 1/2 the amount up to $5000.00 over this I would be ok with asking for 2/3 up front. This is just a guide for me, I do everything in my power to find out a much as I can about them, knock on wood I have not had any problems so far. I've had good luck with RFQ.com & cnc zone. I do go with my gut, If it doesen't feel right I ask for as much as I think I need to reduce the risk, or let the PO go. after the first time I will bill 1% 10 or net 30


Don

 

[caldude]

Checking credit worthiness of new customers

We have used Dun & Bradstreet to check out new customers. D&B has various reports that range from $100 and up. We usually get a "Business Information Report" which costs about $125 (last time we got one). The BIN is chock full of good info about the new customer. At no extra charge, a D&B service person will help evaluate the customer based on info in the report. This has proven very helpful to us with customers with large orders.

Of course it's not worth getting a BIN unless the new order is sizable. We use $1500-$2000 as the threshold. Anything smaller than $1500, we don't use D&B and just ask for 50% (or more) up front.

Good luck!

 

[MRZ-Perf]

Thanks to all of you for your inputs on the subject

it's always good to know how other business deal with these kind of stuff.

 

[gmlees]

As a purchaser I would never pay up front for machined parts, we pay net 30 days and only if the parts pass inspection. I have had many vendors in the past 25 years that try to pass non conforming parts, some known some unknown. I do not know which is worse, I suppose the first. It is up to the manufacture to supply product and carry the charges for 30 days.
As a manufacturer most of my customers get 15 days to inspect and 30 days to pay on most large orders, 25,000.00 and up.
As a retail seller I require 100% payment before shipment of any parts, stocked or custom. I never extend credit to retail buyers in the form of goods or services.

 

[caldude]

Of couse you receive favorable credit terms. You have established a good reputation over many years. I'm surprised that so many customers come along who haven't been in business for 20+ years, don't have references, and don't have much info on a D&B credit report. THAT'S when we insist on 50% up front. It then becomes a matter of trust on both ends.

 

[bobk]

I use net 30 and hope that I get payed within 60. Do as much homework as possible. If you can't some how verify that you are dealing with a real company, then I would treat them like a consumer and require COD or CC.