Interesting business practices.

I have my own business. Part of this involves, naturally, both sending and receiving invoices. A fairly standard format includes a 'payment within 30 days of the date of the invoice' statement. In practice this can be slightly flexible because most businesses deal with payments at the end of the month, so if I sent out an invoice now I wouldn't get tense about payment until the end of June. Most of those I deal with will clear that date easily anyway.

I am, or was, a member of a book club specialising in historical books. It used to matter, in the days before places like Amazon which either stock or can get almost any book you can think of, but now it's just a matter of convenience. They send a little catalogue, I browse it and sometimes impulse-buy a few books I hadn't heard of.

They send the book a week or so later, followed by an invoice, I send a cheque and all is well. That's how it's worked for years.

Their business model has now changed. They no longer bother with the invoice-reminder-threatening letter sequence. Instead they skip straight to the threats, the 'late payment of an invoice we haven't bothered sending' additional charge and a warning that they will progress to bailiffs unless they receive the contents of your wallet by return. So that's three dead flies and a chewing-gum wrapper by recorded delivery.

This makes doing business with them far more trouble than it's worth. Oh, I am sure they scare the average customer into paying up at once but I have to wonder how many of those customers come back. This one won't.

Here is my response to the letter I received today. Keep in mind that the total order value involved here is less than £20.
___________________________

Dear Sir.

Thank you for your final notice dated 10th May, which arrived today (18th May), a copy of which is enclosed.

I ordered three books from you on the 8th April, just over a month ago. Two arrived followed by an invoice for those two. This invoice was dated 26th April and arrived on the 6th May. I posted a cheque to cover the amount the same day.

The third book subsequently arrived. I have received neither invoice nor reminder for this book, instead I now have a final notice demanding the cost of the third book plus the cost of the books I have already paid for, plus a £2.50 late payment charge and a threat to involve a collection agency. All this in, you will note, just over a month from the date of ordering - not the date of receiving - the books.

I enclose a cheque to cover the cost of the third book and your late payment charge. You have already received payment for the first two books.

Your rapid transition from book supplier to litiginous creditor makes it evident that my custom is an inconvenience to you, so now that my account is clear you may close it permanently. I will not trouble you with further orders.

Yours sincerely,


_____________________________


I suppose they want to force doddery old cheque-writers like me to use their 'tell us your credit card details on the phone' payment method but I'm not going to do that. Instead I will take the alternative option of buying books elsewhere in future. Independent booksellers like this are rapidly going out of business and they blame the likes of Amazon and the big chain bookstores while driving more and more customers to them.

If they used the 'pay when you order' model, that would be fine. Most places use that now. Instead they like to make a big thing of letting you see your purchases before they invoice for them, which sounds like a good method. However, following that up with extra charges and threats without bothering with the intervening invoice at all is not a good business model if you want to encourage repeat custom.

I also wonder why it takes over a week for any letter they send to arrive. Nothing else seems subject to such delays. It means that any 'pay within' period is a week shorter than it should be.

In my own business we agree a price, I do the work and send an invoice along with the report. If I were to then send a threatening letter straight away, those customers would soon tire of me and look elsewhere for the next job. Like that book club, you see the finished article before you pay. There is an element of trust involved. If I were to make clear that I didn't trust the customer to pay, then they're not going to commission me for more work.

Yes, there has been one who didn't pay. The trust element works both ways, in that I have turned down further offers from that customer. Claims of 'We'll add it to the next one' don't wash. Since it would have cost more to chase it than I'd have recovered, I put it down to beginner's naievety and moved on.

Times are hard, people are cutting back, and things like books, especially books of interest to a narrow audience, are hard to sell now. The electronic book gadgetry means people can get the same book for half the price and with instant delivery, and this club deals only in print. It's a tough time to be selling narrow-interest non-fiction historical books. So I can see they'd be keen to keep the cashflow going, we are all in that particular boat, but I don't think threatening their customers is the best way to stay in business.

It's not a business model I'll be adopting.