Greed and losing Control

[MidwestLandlord]

A cautionary tale I thought I would share.

One way I make money is wholesaling by flipping bill's of lading. I send a truck to the manufacturer, pull a BOL in my name, the driver rewrites a new BOL for the retail destination to be legal with the DOT, and then delivers to my retail customer on COD.

I had a small wholesale competitor doing the same thing, we'll call him Bob.

Bob had been doing this for 30+ years.

A retail competitor of mine, we'll call him "Jerkface", called Bob and told him that if Bob was willing to sell to him on credit, he'd be willing to pay more. The offer amounted to about double Bob's usual margin.

Bob did no due diligence on this retailer, and sold to him on credit. If Bob had picked up the phone and called anybody in the industry (I knew Bob well, why didn't he call me?!?!?), he would of realized Jerkface was bad news.

Bob didn't know that Jerkface had been cut off from all other wholesalers, and that me and other's had heard Jerkface was on the edge of bankruptcy, so we had intentionally cut retail prices below cost to finish Jerkface off. (yes, I hate doing business that way)

Bob even fired all other retail customers he had, to focus solely on this "high margin" Jerkface.

By the time Bob realized Jerkface would not be paying, Jerkface was about a million dollars deep in what he owed to Bob. Bob had taken a line of credit himself to front the cash for the product, expecting Jerkface to pay later and the margin to carry the interest on the LOC.

Jerkface went under, Bob also went under...after 30 years in business.

Bob committed suicide a week later.

Bob's greed for the double margin caused him to throw away control.

 

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[mayana]

Jerkface went under, Bob also went under...after 30 years in business.

Bob committed suicide a week later.

Bob's greed for the double margin caused him to throw away control.

This is horrible and tragic. It's hard to lose people this way - and all for money!

Thanks for sharing this story.

 

[G-Man]

Done a lot of the double blind game myself. I kind of miss it,... the constant fear and excitement that someone's going to leave a label on something....

I also happened to be in one of these greedy companies that took on huge bank financing to cover up what was actually just terrible risk management.

Fast forward a couple years and one guy is popping painkillers all day and asking G-man to make wire transfers to another company he owns. G-man then begins surreptitiously recording every day he has at work, and downloading all his work emails and files to a backup every night, so painkiller man doesn't try to falsely accuse him when this thing inevitably ends up in court.

I miss it so much. I think his name was "Jerkface" too. What a coincidence.

 

[MidwestLandlord]

I miss it so much. I think his name was "Jerkface" too. What a coincidence.

I found out a few weeks ago that Jerkface managed to get a VC to cover his debts, so now it's round 2 with my having to compete with this a**hole.

I think this VC has much, much deeper pockets than I...so it doesn't look good for me. He's already pushed my entire market in Colorado into the red.

I suppose that's what I get for pushing him into bankruptcy in the first place. But he started it! He wrecked the market to begin with, put a lot of my competitors out of business!

All he had to do was price with the group and we all would of made a lot of money. But nooooo he couldn't do that, heaven forbid he goes into business to provide value and make money instead of just trying to destroy others.

Ok, got that out of my system, I'm done whining now haha.

 

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[G-Man]

I found out a few weeks ago that Jerkface managed to get a VC to cover his debts, so now it's round 2 with my having to compete with this a**hole.

Those guys are always able to find the next person with money to dig them out of a hole. Usually if you learn their personal story, they've been though it over and over, and it will keep happening, and they'll never learn. They usually have that charisma gift that they've been using since grade school to weasel out of problems. It's like the rich kid that won't stop drunk driving no matter how many times his a$$ gets arrested, because mom and dad always show up with bottomless pockets to bail him out.

 

[ZF Lee]

Bob even fired all other retail customers he had, to focus solely on this "high margin" Jerkface.

By the time Bob realized Jerkface would not be paying, Jerkface was about a million dollars deep in what he owed to Bob. Bob had taken a line of credit himself to front the cash for the product, expecting Jerkface to pay later and the margin to carry the interest on the LOC.

Jerkface went under, Bob also went under...after 30 years in business.

Bob committed suicide a week later.

Bob's greed for the double margin caused him to throw away control.

That was a stupid decision to fire ALL OTHER CUSTOMERS?!
The a$$ effectively disarmed the SCALE part of the Fastlane equation.
Even if he offered double, so what? If you had many other customers willing to pay even a lower price, the numbers will beat that!
I'm still a newbie in this field, but such a stupid decision still pisses me off!

Sidewalking crap.

 

[MidwestLandlord]

That was a stupid decision to fire ALL OTHER CUSTOMERS?!
The a$$ effectively disarmed the SCALE part of the Fastlane equation.
Even if he offered double, so what? If you had many other customers willing to pay even a lower price, the numbers will beat that!
I'm still a newbie in this field, but such a stupid decision still pisses me off!

Sidewalking crap.

Hence why I wanted to share the story. It's easy to say "I would never do that!!"

But the mindset of the slowlane and sidewalk can be very powerful, and can come back later to haunt you.

It took me a long time to realize the hardest thing I'll ever do is not becoming rich, but fighting my own self-defeating impulses, desires, and mindset.

Then I realized that I was turning "correct mindset" into an event itself, and I was trying to give it a "destination" or a "goal" instead of realizing it's a life long process that only ends when I die.

I want to be buried in a graduation cap and gown. Until then, I'm still a student.

 

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[G-Man]

But the mindset of the slowlane and sidewalk can be very powerful, and can come back later to haunt you.

It took me a long time to realize the hardest thing I'll ever do is not becoming rich, but fighting my own self-defeating impulses, desires, and mindset.

Absolutely true. I let the easy money mindset creep back in and made a loan to some morons that have no business running a company. I'll probably now spend the first half of 2017 financially managing their company for them just so I can get my money back. As I was cursing them in the car the other day, I realized, they're not the problem. They are what they are. I knew what they were when I loaned them money. I'm the problem.

Self-defeat is the most unbearable kind of defeat.