Net 30 credit?

[smokeybarnable]

I can move my product but don't have the cashflow to keep all products in stock...or I should say I could offer more products and have a deeper inventory if I had credit. Should I ask for Net 30 credit from my supplier? What are the pros and cons of net 30 credit?

Thanks.

[ispy]

A con would be that it's like a credit card and the manufacturer would probably charge interest to you if your balance was not paid off every 30 days. Since you need the credit this would probably be the case here. It becomes very difficult to determine how costly this really is with money going every which way with things like advertising, whether you would have made the sale otherwise if the item had not been in stock at that particular time when a customer wanted it, etc., unless you have a good accountant. If things go arwy at any point and you get over your head it's possible that this may cause bad blood with your relationship with the manufacturer knowing that you are paying so much interest to a company you are trying hard to sell for.

A pro would be that if you are missing many sales due to not having items immediately in stock you could stock more items. I dont know if you are in a situation where customers have the option of waiting longer for a product if its not in stock. If its not in stock and this means there is no sale whatsoever, like its not on the shelf, I would jump at the chance for the net 30. If you have a sample product and its the kind of thing a customer would wait for, then I would do some research on how many sales go bad with customers cancelling before receiving the item or refusing the purchase when they find out its not immediately available. This would help determine whether it was worth it to stock so many items.