Re:The global chip shortage is starting to have consequences
by robomartin on Sunday May 09, 2021 @03:47PM
(#27099087)
> Maybe the real lesson of the whole thread is to require customers to pay in advance with a non-reversible wire transfer
Not so easy. This is particularly true as you start to get into higher dollar amounts. Also, it tends to be far more common with international orders than with domestic business. I can say that nearly 100% of our international business was prepaid. Sadly, during the 2008 downturn, all business came to a halt. There were very we places where you could find income that could sustain the prior state of business.
In the case of the the five million dollar contract I mentioned, we did get a $500K deposit with the order. Well, the $500K was spent on components pretty much as soon as it hit the bank, within a week. It's very hard to escape something like what happened in 2008 if all your cash in in a warehouse filled with parts and product you just can't sell.
Not so easy. This is particularly true as you start to get into higher dollar amounts. Also, it tends to be far more common with international orders than with domestic business. I can say that nearly 100% of our international business was prepaid. Sadly, during the 2008 downturn, all business came to a halt. There were very we places where you could find income that could sustain the prior state of business.
In the case of the the five million dollar contract I mentioned, we did get a $500K deposit with the order. Well, the $500K was spent on components pretty much as soon as it hit the bank, within a week. It's very hard to escape something like what happened in 2008 if all your cash in in a warehouse filled with parts and product you just can't sell.