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The CEOs of the large companies that do this should be flayed with barbed-wire whips.
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Friday, February 18, 2011
How Big Companies Screw Smaller Companies
The big companies pay small business on a "net 60" or even "net 120" terms, while small businesses have to pay their suppliers on "net 30" or "net 20". So the big companies are riding on the backs of small businesses.
The CEOs of the large companies that do this should be flayed with barbed-wire whips.
The CEOs of the large companies that do this should be flayed with barbed-wire whips.
6 comments:
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Back in the 80/81 recession I owned a business. I was listening to some business program on the radio and the discussion was about helping small business survive. The first words out of the guests mouth were "Don't pay your bills for 90-120 days." I thought, If I try that I'll be out of business in 60 days when none of my suppliers will sell me anything.
ReplyDeleteHere's another. Try inventory discounts for that get progressively bigger as you buy more. The small business can't take advantage of 5-6% and the big boys can. The big get bigger and the small die off.
The owner of the local gun shop is very much pissed that he cannot buy ammunition at wholesale for what Wal-Mart sells it retail.
ReplyDeleteBack in that same Reagan recession I was working for a small contractor that did oil refinery and pipeline instrumentation calibration, installation, and repair. Our client list was several huge oil companies, all of which made profits of billions of dollars per year. It was common for these oil companies to be six months in arrears on their payments to us. I remember my boss ranting about one meeting where an oil company executive said, "You can sue us for your money, but then you'll never get any work from us again. Shut up and get out of my office if you ever want work from us in the future."
ReplyDeleteIn other words, this isn't new by any means. It's just astounding at how well our ideological minders hide these realities of just how corrupt our big businesses are from the majority of the general public...
- Badtux the "Yeah, they're corrupt" Penguin
BT
ReplyDeleteWe had a customer who paid 120-180 days. Always paid, never dissatisfied with the work, but always 4-6 months. One Friday when I was 17 my dad sent me to get a get a check, telling me not to leave until I had one because otherwise we wouldn't be able to make the payroll. I show up tell the owner that I can't leave without a check and he tells me he can't pay me but he can give me another job. So I have to quote a job with no supporting info other than whats in my head (ends up 40k worth of work), he gives me a deposit check for 20k which is about twice what he owes. I ask the obvious question why can't he just pay for the job he owes? He hasn't been paid, according to him so he can't pay us. He used to give us about 200k of work a year, which was pretty good for the late 60's so we just had to accept the payment schedule.
And yes he was an asshole. But he did smile while screwing you so there's that.
A willing buyer and a willing seller enter into a contract. Both know when the buyer would pay. Then someone else complains about the terms of the agreement of which they had no part.
ReplyDeleteC'mon, John. Do you seriously think that there is anything remotely resembling equal bargaining power here?
ReplyDeleteBig corporations are screwing smaller ones, just because they can. They are making their suppliers, in essence, give them interest-free loans, just because they can.