We Told You So!
Actually the letter began “you told me so.” It was from the long term K&B Century Club dealer who was sifting through the rubble of a great order that turned into a disaster.
The dealer, who we’ll call Pat, had originally started in the specialty business working for a small distributor in Denver. After moving to upstate New York in 1989 the dealer became an independent distributor and built a nice business. In 1994 Pat found that administration and financing was holding the business back – and Pat became a K&B dealer.
In June 2001, Pat was working on a project that eventually became an order for 90,000 magnetic clip note holders. The order sold for 69 cents each or $62,100 plus freight. So far, so good! The order was placed with the factory, a proof was sent, approved and the job produced. While the finished job was in transit, the customer (in a complicated “domino” effect from other events) went out of business!
The factory was demanding $49,680 plus freight – and there was no hope of ever getting a dime from the now nonexistent customer. The next line in the dealer’s letter said “I wish I had sent this order to K&B.” Pat admitted that orders were occasionally placed directly with factories “to make a little bit more” money. The note holder order was one of them. Pat said that every “extra” dollar that was earned over the past 8 years was wiped out and that it would require a loan to pay off the factory.
Pat said that in 1994 at the K&B 100th Anniversary convention, in a conversation with Dick Kaeser, Dick said that by putting all your business through K&B you will be protected from loss. That once K&B approves the customer’s credit, a dealer never has anything at risk except the advanced commission on the order.
Similar (although I think this is the largest order) situations have caused many people to make the connection with K&B in the first place. We know of a few instances where dealers have gotten “burned” in a much smaller way and swore never to take the risk again. But Pat’s letter was the first to ask us to “spread the word” and tell every K&B dealer how important it is to be protected from the risks of direct business.
When the many hours of administration and the lost business that those hours could have produced are figured in, Pat’s loss is staggering. You may think that this will never happen to you and this entire column is simply a commercial for K&B. Well, we guarantee that Pat doesn’t think so!