Money transfer during purchase of IBA

[ToFarGone20]

What is the typical arangement (if there is one) when buying a new IBA? I have found one that fits my situation and we have decided on a price. The supplier wants 40% down...50% progress payment in 30 days...and 10% due before shipping.

My question is this...do most of you just send payment to the supplier or do you use escrow in this situation? Anytime you get into larger dollar amounts I always feel safer with an impartial third party....maybe I have just been scammed too many times?

Any thoughts would be greatly appreciated!!!

Anthony

 

[soapy]

MIne have always been purchased with 10% down and then another 80% when it is delivered at the site. The final 10% is when it is installed. I have heard of a few people who put large amounts down and the distributor never delivers. IF the distributor is not strong enough fianancially to order one then maybe you need to find a more stable distributor.

 

[ToFarGone20]

right

I didn't want to sway anyone so I wrote the question as neutral as possible...I agree with you 100%....at no point do I want to be exposed if I can help it, and paying infull/upfront is pretty damn exposed.

Thanks Soapy

Anthony

 

[rph9168]

The pay schedule depends a lot on the manufacturer. Most require at least 25% down with the order and payment in full before shipping and do not offer a refund. Some will give a short term credit on a payment already made but no refund.

I do not know of any distributor in today's market that would place an order with 10% down and not require that at least 85 to 90% of the total paid before shipping.

It is not a question of a distributor strong enough to take less to place an order but good business not to risk losing money over an order cancellation.

 

[JMMUSTANG]

Why not call the mfg. and tell them you want to send the downpayment directly to them.
Once the iba is delivered send them the rest before install.
Then all you have to worry about is getting it installed.
Then you only have to pay the distributor for installation.
With this arrangement see if the mfg. will guarantee that it will be installed by their distributor.

 

[rph9168]

I doubt that a manufacturer would allow you to go around their distributor. Why is it that the distributor should trust the operator to fulfill the contract but the operator shouldn't trust the distributor? Sounds to me that this would not be a very good business relationship.

Do you expect to pay for chemicals from a distributor when they are delivered? Usually statements are sent out monthly. The distributor is trusting the customer to pay and puts the product in and carries the cost until payment. If you are dealing with a distributor that gives you reason to question whether they will honor the business deal I think you need to find one you can trust otherwise terms are set for a reason and should be respected.

 

[JMMUSTANG]

If their worried enough about it it is worth the try.
All the large car wash equipment purchases I've made has always been purchased through the mfg.
I've never had a problem with a mfg. wanting to lose a sale by how they got paid.

 

[soapy]

My large payments for the equipment are made with a line draft before the equipment is unloaded on site. This has always worked with Ryko. The last few purchases have been through a leasing company and I did not have to worry about down payments or the resulting payments. I was always called by the lease company however to verify that the equipment was on the property before they would release funds to the mfg.

 

[rph9168]

When dealing with a leasing company a distributor knows the money will be paid. Normally a leasing company works with the payment plan set by the distributor.

I think that a distributor would not want to sell for a manufacturer that makes deals in their territory to take payments directly from an operator. Personally I have never heard of that unless it was a sale directly to a customer where a distributor does not have an exclusive leaving the equipment company the opportunity to sell direct in their territory. The distributor gets the install money and warrantee work if there is any. I have never heard of it where a distributor makes the original contact with the customer.

 

[pitzerwm]

Make the check out to the distr. & the Manuf. Then you know that the money is going through the manuf. I'd make the distr. give you a credit report on himself. You are going to give him $100K, you are the one with the money, he needs you today more than you need him. Of course, that might change down the road. You always need to protect yourself, if he is legit, he won't mind. Why haven't you talked to everyone of his customers for the last year or so?

 

[Doug P.]

I have purchased 12 new automatics in the last 16 years and I have never paid more than 25% down with my order and then the balance on delivery and installation after installation is complete. There is no way I would pay 100% before delivery. I would have to have a lot of confidence in my dist just to make a downpayment before delivery.


Doug P.

 

[dogwasher]

I doubt that a manufacturer would allow you to go around their distributor. Why is it that the distributor should trust the operator to fulfill the contract but the operator shouldn't trust the distributor? Sounds to me that this would not be a very good business relationship.

Do you expect to pay for chemicals from a distributor when they are delivered? Usually statements are sent out monthly. The distributor is trusting the customer to pay and puts the product in and carries the cost until payment. If you are dealing with a distributor that gives you reason to question whether they will honor the business deal I think you need to find one you can trust otherwise terms are set for a reason and should be respected.

Unfortunitly, there have been some storys on this site where the Dist. has taken off with the money(large amounts of money) even the Nicest people have turned out to be con artist. Dont trust anyone and keep your guard up.

 

[rph9168]

I bet there are more stories about operators that ordered chemicals, service or parts that never paid the distributor.

I am not trying to defend distributors. A smart business owner knows who they are dealing with. I think we need to look at both sides. Just as distributors have been stiffed by some operators, some operators have been stiffed by distributors. Whose fault is it? If a distributor has walked away with someone's money I bet it wasn't the first time or at least it wasn't a reputable distributor to begin with.

If you are going to make a large purchase it is your responsibility to know who you are dealing with. I can think of several in our area that I would never deal with. The same goes for the distributor that sells to someone who never pays their bills. It is their responsibility to make sure they are dealing with a customer who can be counted on to make good on financial commitments.

I have been on both sides of transactions - customer and distributor. I wish I could say that it always turned out the way it was supposed to. What I can say that almost everytime I came up on the short end I should have known better.

 

[mac]

If this distributor is asking for 100% before delivery, I would walk on the entire deal. Good advice above. Here are a few things to do:
1. Have a written contract spelling out EVERY detail. Every make and model.
2. Have all tasks written that you will do, and what he will do. Who does the elec and water? Who gets the permits? Who does any building changes? Who provides signage?
3. Have the install time specified. With most automatics, it should be one week, two at the tops. I know one local company her in south FL that takes two months for a three brush rollover.
4. Have warranty details specified. Who pays for shipping on warranty parts? Is it free the first 90 days? How about if it breaks late on Thurs day?
5. Have a performance guarantee put in. What is acceptable down time? What is acceptable wash performance?
I have an article in the Dec 2007 PC&D issue that lists some more. Remember, you are in charge. Make the distributor perform to professional standards. Just so you don't think that I am bashing distributors, I am one.

 

[rph9168]

Mac, good information. I would expect that any reputable distributor would supply all this information and make it part of their contract. Likewise I would expect that any customer would complete a formal credit application and guarantee payment.

 

[mac]

One other important thing I forgot to mention is to do a background search on the distributor. A lot of it can be done for free on the web. There are also some services that will do a legal search for under $50. They can find any lawsuits or judgements. You should see the printout I got for Barry and Shaun Boyd.