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I run a B2B ecommerce / wholesale business. Our customers are small retailers (not chains, only independent stores).
Currently all our customers pay upfront when they place an order. We have 200-250 customers and every few months we have a customer asking for credit terms. This seems to be a minority of customers who need credit but I'm unsure if our credit terms are holding us back from growth. It's unusual for a wholesaler not to offer retailers credit.
Our competitors offer 30 day payment terms and they otherwise have a similar offering to ours. Retailers might choose the competitor because of the credit. We could also potentially sell more.
On the other hand I can't be bothered to chase up payment for 80 orders per month. It is a lot less hassle getting paid upfront. We do currently have enough cash to offer credit but in the long term it would have a negative effect on cash flow. Sales have been steady for 2 years and we don't have any customers getting really annoyed about our payment terms (or at least they don't tell us).
So what do you think we should do? Do you offer your business customers credit? Have you had problems with late payments?
Currently all our customers pay upfront when they place an order. We have 200-250 customers and every few months we have a customer asking for credit terms. This seems to be a minority of customers who need credit but I'm unsure if our credit terms are holding us back from growth. It's unusual for a wholesaler not to offer retailers credit.
Our competitors offer 30 day payment terms and they otherwise have a similar offering to ours. Retailers might choose the competitor because of the credit. We could also potentially sell more.
On the other hand I can't be bothered to chase up payment for 80 orders per month. It is a lot less hassle getting paid upfront. We do currently have enough cash to offer credit but in the long term it would have a negative effect on cash flow. Sales have been steady for 2 years and we don't have any customers getting really annoyed about our payment terms (or at least they don't tell us).
So what do you think we should do? Do you offer your business customers credit? Have you had problems with late payments?
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