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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.
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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