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10/12/20
08:49
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Originally posted by Holdtight:
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I will explain it to you @llzzenberg, as Dopeycrazydave has no idea and loves to downramp the stock he supposedly holds when the market comes off!! EXAMPLE OF THE DELAY Purchase Order is received Jan 1 for 10m lights/strips from Amazon. Bud places the order with Eastfield. Eastfield ( due to be owed money in the past ) say we need the money for the parts up front. NON COMMERCIAL arrangement that has all but been addressed. Bud send through funds and Eastfield start ordering the parts. Some lights have over 100 components. This can take somewhere between 4-6 weeks to arrive. Then Eastfield take 4-5 weeks to build the 10m lights Next step is to place them on a ship to where ever Amazon wanted them for. This can take another 4-6 weeks The lights arrive at amazon in approx April. Then Amazon have 45 day terms to pay ( this is the arrangement amazon has with everyone) There is the 5 months from PO to receiving cash in the bank. To fill in the cash flow mis-matches Buddy uses Account receivable finance and inventory finance. Hope this explains how things operate. Once the business is in full operation the mismatch will be much less. Its getting out of the block in large scale that has caused this complications. Oh and LIFX is only 8.5 years old. Not 12 as Crazy BS about.
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manufacturer - distributor relationships require credit periods. Usually supported with LC facilities (need to be careful with unsecured credit). However to expect instant cash receipts for the majority of sales is ridiculous.