How To Take Large Orders Without Going Broke

Finally, the phone has rung, email has hit the inbox and the customer of your dreams inquires about that order.

You know what order we’re talking about. The one that makes your eyes go wide, as you imagine how you’ll finally put that new automatic press to the test. 

You start thinking about how to quote that customer. Is my price to high? Is it too low? How am I going to compete with the big boys? Should I go cheap just to get the order, or should I hold my ground and play hardball, pretend like 10,000 piece runs are no sweat?

Afterall, they inquired. 

You graciously talk to that customer over the phone, not trying to sound too excited, containing the excitement that you have finally hit jackpot. You are professional about your quote, as you meticulously double check each line item to make sure there are no discrepancies.

You click send and wait. 

and wait. 

and wait. 

You are checking your inbox every other minute and finally, the moment you have been waiting for, your customer decides to go with you. 

You’ve done it. Congratulations. You’ve grown your business to a point where customers trust you enough and will give you those special orders.

Quickly you work with the customer to finalize artwork and sizes. Everything looks great. 

Suddenly, you get another email from their purchasing department saying that they have issued a purchase order and that the terms of the PO is a payment in 30 days after you have delivered the goods. 

You stop, heart sinks, and think “oh sh*t” how am I going to float this? You are managing your cash flow so well, but a dent that large could strain your business.

You realize the customers are putting in a large order because they trust you, and the last thing you want to do is embarrass yourself by saying you don’t have the cash to get the goods.  

Let’s talk about credit. How do you take on large customer orders while not hurting your cash flow? It is okay if you are new to the business and don’t have a 100k liquid that you can float in any direction, on any given day.

It just means you have to be smarter, much smarter. 

Let’s go through a few things you can be fiscally responsible when handling large orders:

Set Terms Early With Your Customers

You are right, it is embarrassing to have to go back on a quote and say you need money to place the order because your business is not stable enough yet to pay for the goods necessary to produce the job. Instead make sure you let your customers know early on, that you will need a downpayment on the job. It is not crazy for a large company to have their own terms they ask you to adapt to but normally, if your customers know early, they will help you out. 

Develop Net Terms With Your Suppliers

Like a credit card, your leash will get better and better with your suppliers. Your suppliers want to sell to you and want to help you sell their products. This is why you need to create strong relationships with a few key suppliers. They will be there for you as you grow. If you always bargain hunt for apparel it will be really tough to get good terms with those distributors.

Show your suppliers like S&S, Alphabroder, or Sanmar your purchase order, and they may be able to extend you 60 or 90-day terms on the order you should collect in 30 days. 

Get A Good Credit Card or Line of Credit

Often times, credit cards may give you a 6 or 12-month free financing deal when you sign up with them and have good credit. Although it is rarely recommended to leave a balance on your credit card, you at least have a high-interest loan backing you up in case something happens when collecting your order.

Alternatively, if you have good credit, and a relationship with a bank or lending group, apply for a line of credit that you can use if necessary. 

Incentivize Payments Upfront

“Accounts Receivable” are often referred to as “Accounts Deceivable” because you really don’t know how much time, effort, and man hours it takes to collect money. Offer your customers a 5% discount if they pay upfront. That 5% could be what you spend in payroll on your billing team. 

Likewise, there are instances where you can set “financing” or “late fees” if a payment is overdue. These are made in the initial terms sheet. It may even make you sound more legit if your customers know you are all business. 

Get Signatures Before You Start

Although the quote might be a “yes” over the phone or a simple handshake, before you get started, make sure your customers sign something in writing. Make sure you have proper information in case you do need to take legal action.

Maybe it is a resale certificate, social security number, or a copy of their driver’s license. When you go about making your customers fill these out, they will take you more seriously. No one wants to get sent to collections, and if you do need to take action, have it ready to go. 

Make Someone Sign at Pick Up

The last thing you want to hear is a delayed payment because the customer doesn’t believe they received the correct products or quantity. Make them initial the invoice when you have delivered the order so there is no discrepancy. If there is an issue, figure it out on the spot, not when they are 30 days past due. 

Invoice Immediately, and Follow up 

It is imperative that you have an easy way to collect money from your customers. Manual credit card forms and taking payment over the phone is a thing of the past. Use tools that can text your customers directly, and can send follow up reminders.