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Fighting For The Bottom Line
Of Businesses Worldwide

Fighting For The Bottom Line
Of Businesses Worldwide

What if a wholesaler doesn’t pay?

On Behalf of | Jul 10, 2024 | Collections |

When you first began manufacturing products, you just sold them to customers directly. The business was small, but growing organically. You eventually started to get some of your products in local businesses.

But then you got what you thought was a big break. A wholesaler wanted to purchase a bulk order. They would then handle distribution, getting the products into commercial settings and in front of a much wider audience. Not only is this going to help you grow your brand, but getting the bulk order means that you get a sudden influx of cash. Rather than selling products one or two at a time, you may be selling thousands of units at once.

The problem of nonpayment

A major problem can sometimes occur, though, if the wholesaler does not abide by their contract and does not pay on time. Nonpayment is obviously a serious financial issue for your business, but even a delay can be problematic.

After all, you may have just sold the bulk of your inventory to one wholesaler. You already shipped the products, so you don’t have any inventory left. If the wholesaler pays, you can use the money to keep the business running and growing. 

But if they fail to pay, then you suddenly have a cash flow problem where there’s no money coming in, so you can’t even make new products to sell to individuals. You thought this was a big break, but your business is actually in a much worse financial situation than you were before.

Fortunately, there are steps that you can take. You just need to know about all of your legal options so that your business can seek the money that is due.

 

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