Exporting to Greece

am946745

I have a client who have have sold to for 12 years. He has always paid. However with banks in lock down he can't make payment and has asked for extended Credit. Should I put my business in the position of a possible financial exposure? its 43K at the moment of goods that we are going to ship. Either way if the sales are lost I will have to let 2 people go. What are other businesses doing in Ireland with Greek customers?

alias no.9

am946745 wrote: »

I have a client who have have sold to for 12 years. He has always paid. However with banks in lock down he can't make payment and has asked for extended Credit. Should I put my business in the position of a possible financial exposure? its 43K at the moment of goods that we are going to ship. Either way if the sales are lost I will have to let 2 people go. What are other businesses doing in Ireland with Greek customers?

Is it a bespoke order or can the goods be sold to another customer?

am946745

alias no.9 wrote: »

Is it a bespoke order or can the goods be sold to another customer?

Labeled in Greek and Serbian. Other customers won't take them. I am sure the customer would pay, but if the banks go belly up its out of the customers hands. I am screwed either way, not just on the order, but on the loss of the contract if they can't buy for the rest of the year.

Anyone else in this situation?

Atlantic Dawn

Can you wait for another 7 days before shipping the goods where he might be able to secure payment? The banks there should be open next week so if it's a simple money transfer he should be able to do it. What kind of term of extension is he looking for?

am946745

Atlantic Dawn wrote: »

Can you wait for another 7 days before shipping the goods where he might be able to secure payment? The banks there should be open next week so if it's a simple money transfer he should be able to do it. What kind of term of extension is he looking for?

I am really praying.. I am in two minds to ship the goods and keep the contract. The customer is desperate. Great relationship with them, I just don't know what the country will do.

alias no.9

am946745 wrote: »

Labeled in Greek and Serbian. Other customers won't take them. I am sure the customer would pay, but if the banks go belly up its out of the customers hands. I am screwed either way, not just on the order, but on the loss of the contract if they can't buy for the rest of the year.

Anyone else in this situation?

If the costs are sunk and there's little prospect of recovery by selling the goods to any other customers, there's very little more to be lost by by taking a chance on a loyal customer.

am946745

alias no.9 wrote: »

If the costs are sunk and there's little prospect of recovery by selling the goods to any other customers, there's very little more to be lost by by taking a chance on a loyal customer.

4 K in shipping costs.. Also the customer said there is little chance they will be able to send money out of greece this month, if the banks open they will be emptied.

Am I the only business in this situation?

Riverireland

am946745 wrote: »

4 K in shipping costs.. Also the customer said there is little chance they will be able to send money out of greece this month, if the banks open they will be emptied.

Am I the only business in this situation?

God that is a tough situation to be in. Another 4k is a lot to risk, can you get credit on this? Why don't you try the Greek embassy tomorrow or some business organisation. I wish you luck and hope it all works out.

alias no.9

am946745 wrote: »

4 K in shipping costs.. Also the customer said there is little chance they will be able to send money out of greece this month, if the banks open they will be emptied.

Am I the only business in this situation?

That needs to be balanced with the prospective payment you might receive even if it's one month or six months. Will the 4k push the business to the brink or is it less significant than the loss of the contract? Do the goods have a limited shelf life?

am946745

alias no.9 wrote: »

That needs to be balanced with the prospective payment you might receive even if it's one month or six months. Will the 4k push the business to the brink or is it less significant than the loss of the contract? Do the goods have a limited shelf life?

9 Months. Customer OOS. I will probably ship. If greece goes belly up I am literally f90ked.

I would love to know if any other people with sales to Greece. It would be good to know what they are doing. I know Ryanair are accepting cash for flights a the airport.

If the euro collapses, We are in for a long long depression

alias no.9

am946745 wrote: »

9 Months. Customer OOS. I will probably ship. If greece goes belly up I am literally f90ked.

I would love to know if any other people with sales to Greece. It would be good to know what they are doing. I know Ryanair are accepting cash for flights a the airport.

If the euro collapses, We are in for a long long depression

Is the €43K your sunk costs or the value of the sale, less shipping?

Maybe map out some scenarios where you get paid

50% of the contract value in 1, 3 or 6 months
the full amount in 1, 3 or 6 months
where you get paid nothing in the next 6 months

Figure out your net financial position for each scenario. Then try and assign a loose probability of each of happening, maybe start with the probability of getting nothing at all. There's a lot of uncertainty but it may still give you a clearer view.

am946745

alias no.9 wrote: »

Is the €43K your sunk costs or the value of the sale, less shipping?

Maybe map out some scenarios where you get paid 50% of the contract value in 1, 3 or 6 months, where you get paid the full amount in 1, 3 or 6 months and where you get paid nothing in the next 6 months. Figure out your net financial position for each scenario. Then try and assign a loose probability of each of happening, maybe start with the probability of getting nothing at all. There's a lot of uncertainty but it may still give you a clearer view.

Its 20% of our business. My accountant says NOT to ship. Is not so much the 43K, is the next order they can't pay for as we ship every 2 weeks.. I have an 8 week lead-time on materials.. Do I buy? etc.. anyone with supply chain background knows the problem. Every day that passes I increase my exposure, I am buying materials, paying wages, producing goods. and I may never get paid if greece goes belly up.

alias no.9

am946745 wrote: »

Its 20% of our business. My accountant says NOT to ship. Is not so much the 43K, is the next order they can't pay for as we ship every 2 weeks.. I have an 8 week lead-time on materials.. Do I buy? etc.. anyone with supply chain background knows the problem. Every day that passes I increase my exposure, I am buying materials, paying wages, producing goods. and I may never get paid if greece goes belly up.

That's a lot more complex than just this order then, not an enviable position to be in.

am946745

alias no.9 wrote: »

That's a lot more complex than just this order then, not an enviable position to be in.

No its not. Am I the only Irish business in this position?

amber2

Prior to exportation do you currently rely on a Letter of Credit and if so is it issued by a Greek or non Greek bank?

am946745

amber2 wrote: »

Prior to exportation do you currently rely on a Letter of Credit and if so is it issued by a Greek or non Greek bank?

Never used LOC with any customers in EU. only with some non EU countries.

andrew

am946745 wrote: »

No its not. Am I the only Irish business in this position?

I don't think you'll get a great answer to this question here, but there's an entrepreneurial and business forum too url]http://www.boards.ie/vbulletin/forumdisplay.php?f=106[/url which might be able to help.

Good luck OP.

am946745

andrew wrote: »

I don't think you'll get a great answer to this question here, but there's an entrepreneurial and business forum too url]http://www.boards.ie/vbulletin/forumdisplay.php?f=106[/url which might be able to help.

Good luck OP.

I know. it was a Hail Mary post anyway. Maybe some other people that export will post in the coming days.

Every day that passes that business can't pay their foreign suppliers means a growing problem.

Frynge

Bit extreme but would a trip to Greece with a few employees to collect cash be an option. Could lead to many other issues but might be worth entertaining.

am946745

Frynge wrote: »

Bit extreme but would a trip to Greece with a few employees to collect cash be an option. Could lead to many other issues but might be worth entertaining.

Have already considered it. I suppose we are in the wait and see period.

uck51js9zml2yt

I'd wait 7 days to see how things pan out. Also hold off ordering materials for now.
You don't want to be caught with your pants down.I honestly can't see a deal being done between the EU and Greece soon. If that's the case it has major repercussions.
As for your staff. I don't envy you on that one but you need to protect the business and your other staff. Perhaps consider a short term lay off rather than permanent.

am946745

Jaylah Damaged Penmanship wrote: »

I'd wait 7 days to see how things pan out. Also hold off ordering materials for now.
You don't want to be caught with your pants down.I honestly can't see a deal being done between the EU and Greece soon. If that's the case it has major repercussions.
As for your staff. I don't envy you on that one but you need to protect the business and your other staff. Perhaps consider a short term lay off rather than permanent.

I won't panic the staff for now. I would prefer to pay their wages from savings until the accountant kills me. I pray that the greeks will see some common sense.

We could have been greece back in the day.. At least we knew how to play ball.

Frynge

It might be worth talking to the staff and getting their input on wether to send the stock or not.

andrew

thread moved to Entrepreneurial and Business management forum

pedroeibar1

What we are talking about here is your survival. You need to take the following into consideration and take action accordingly:-

The Greeks knew that a bank closure was coming, so most moved funds offshore. Your customer did / should have done this – unless he had no funds, thereby showing he already is in a weak position. He could have sent funds to you to PIF what was outstanding, thereby creating goodwill and showing willingness to work around the problem. (I'm assuming he is a SME and not the Greek subsid of a MNC.

The Greek govt. might do a “Cyprus” and levy a tax on bank deposits, so your customer might loose a third of the cash in his account. That could finish him off.

My view is that the Greek situation will get worse and the EU/IMF will let that happen to provoke an election and a change of Government.

Your loyalty is not to your customer, it is to the survival of your business, your family, your staff, (put in whatever order you prefer).

Do not increase your exposure or run down your cash reserves - your suppliers will know that you are selling to Greece and probably will enforce stricter terms on you henceforth. You will need your reserves for yourself, not to give to some Greek.

Letters of credit are rubbish in this situaion unless they are confirmed by a bank outside of Greece (and no bank would confirm a Greek LC IMO.)

Many exporters with export credit insurance have had their credit limits on Greek buyers reduced or cancelled during the last year - [EDIT] that means that greek customers are in a weakening situation because they cannot get product.

Call a staff meeting. Be honest, tell them that the Greek customer is a key account (they will know this anyway) and say that money owed is locked up in the Greek banking system and that they have not paid yet and cannot pay in the foreseeable future. Say that you want to help the Greek customer and are working towards a solution with them but until that solution happens product for Greece will not be manufactured. You must stop increasing your exposure. So stop buying materials, stop manufacturing Greek product and place staff on a reduced working week until the issue is resolved. Consider using holidays or unpaid leave of absence.

Insolvency rates are huge in Greece, the present debacle is going to drive them higher.

pedronomix

Early and decisive action as advised by pedroeibar above is sensible course. Your customer is in the same situation with all external suppliers. It is his responsibility to find a way to pay, your already outstanding balance is currently at grave risk. if you want to move the current shipment as you have no other market for the product, tell him to arrange the freight and associated costs. But no more after the floor stock until matters return to normal!

Yeah its time to be as ruthless as possible, no matter how you feel for the Greek partner. I would agree with Pedro number 1 as to why this client hasn't been smart and moved their money already with an impending crash. That does not make sense at all.

What kind of goods are we talking about? I might be able to help you out in Serbia. I know the owner of a chain of 32 department stores around Belgrade and the rest of the country as well as a variety of other businesses. He probably wouldn't be generous about it, but if there is a good deal to be had for him (that might save your bacon too), he might be interested

Mrs OBumble

All the above. And if you want your business to survive, get busy finding other markets for your goods that are not so politically volatile.

TheReaver

Is sending a smaller volume of the goods an option?
If you do decide to ship i'd suggest putting the shipment on Original bill's of lading for extra control

pedroeibar1

TheReaver wrote: »

Is sending a smaller volume of the goods an option?
If you do decide to ship i'd suggest putting the shipment on Original bill's of lading for extra control

Why would that be an option? How could it get the OP his payment?
In the OP's position I would be looking at re-labelling and also getting in contact with el Rifle above.

am946745

pedroeibar1 wrote: »

Why would that be an option? How could it get the OP his payment?
In the OP's position I would be looking at re-labelling and also getting in contact with el Rifle above.

The product was BTO for the customer who pre-paid and collected goods from Ireland. The Haulier they used won't collect now because they can't get paid, and the supplier can't pay. Never had issues with funds before.

Anyway I think we will be wait, we have stopped production for the customer, its a 90% given the greece will leave the Euro, the banks are not going to open anytime soon.

I doubt I am the only business exporting to Greece. I see people saying the greek businesses should have prepared and moved funds offshore. Yes I suppose. But you can't cycle funds offshore now from sales you are making now. the Cash flow has stopped. If you were on a 2-3 weeks cash cycle (as my client was a distributor in greece). Ce la vie. with the Chinese stock market about to crash (we also export over there) and the Euro area in Jitters, its not a great time at the moment. the only good thing for us is the US market as they paid in dollars.. so we have a boost there with exchange rates.

IDA and TD's are beginning to help.. But I think they themselves are in a wait a see mode.

The problem I think is, if Greece goes.. Then the focus goes to Italy which has a Third of Euro Zone debt. If the dominos start to fall it will set a lot of businesses back 15 years. It could be the mother of all recessions.

pedroeibar1

am946745 wrote: »

The product was BTO for the customer who pre-paid and collected goods from Ireland. The Haulier they used won't collect now because they can't get paid, and the supplier can't pay. Never had issues with funds before.

Anyway I think we will be wait, we have stopped production for the customer, its a 90% given the greece will leave the Euro, the banks are not going to open anytime soon.

I doubt I am the only business exporting to Greece. I see people saying the greek businesses should have prepared and moved funds offshore. Yes I suppose. But you can't cycle funds offshore now from sales you are making now. the Cash flow has stopped. If you were on a 2-3 weeks cash cycle (as my client was a distributor in greece). Ce la vie. with the Chinese stock market about to crash (we also export over there) and the Euro area in Jitters, its not a great time at the moment. the only good thing for us is the US market as they paid in dollars.. so we have a boost there with exchange rates.

IDA and TD's are beginning to help.. But I think they themselves are in a wait a see mode.

The problem I think is, if Greece goes.. Then the focus goes to Italy which has a Third of Euro Zone debt. If the dominos start to fall it will set a lot of businesses back 15 years. It could be the mother of all recessions.

Look, AM12345, don’t think I’m rude, but really, your focus should be on your business, and F the rest of the world’s economic issues over which you have no control. Greece is a basket case and will be off th eradar for yonks. Look elsewhere for growth.

Firstly, why the contradiction? Earlier you said you were out €40k- odd (I recall) and now you say the buyer pays in advance? What’s the position? If it is just shipping costs that are a problem and the buyer cannot pay the haulier for stock already PIF, then it is even more serious, - in his position I would be gone to Macedonia/Italy/wherever with a briefcase of cash. If you have not yet been paid, and the haulier cannot get paid to deliver, how the heck do you think you will be paid later?

Suggestions in an earlier post on original Bills of lading is waffle – at an unlikely best you would have product on a quay incurring demurrage; even if you had sold on an ILC your buyer could have met its conditions, got the product and you would still be unpaid because the Greek Central Bank would not / could not remit funds – that is what political risk insurance is for (or an ILC confirmation by an external bank).

Forget the BS time-wasting distraction of TDs and the IDA, the latter can do sweet FA for exporters in a situation like this (outside its ambit) and the former will waffle and talk cr@p because they know nothing. Believe me, I’ve been there.

As for your comments on the strength of the USD and depending on currency differentials to build your business profitability, forget it, you need to build your business on your product – don’t try to outsmart people in banks, you will not succeed.

You have got to take damage limitation measures now. The longer you delay the worse the result will be for you.

On a lighter note, Sinn Fein are over and back to Greece all the time giving advice to Syriza, with whom they share a bed in Bruxelles and if you believe them Greece is going to be fine, Gerry and Pierce are best buddies with Mr Tsipras and are putting him on the inside track!!! (I would not hold my breath, though!)

am946745

pedroeibar1 wrote: »

Look, AM12345, don’t think I’m rude, but really, your focus should be on your business, and F the rest of the world’s economic issues over which you have no control. Greece is a basket case and will be off th eradar for yonks. Look elsewhere for growth.

Firstly, why the contradiction? Earlier you said you were out €40k- odd (I recall) and now you say the buyer pays in advance? What’s the position? If it is just shipping costs that are a problem and the buyer cannot pay the haulier for stock already PIF, then it is even more serious, - in his position I would be gone to Macedonia/Italy/wherever with a briefcase of cash. If you have not yet been paid, and the haulier cannot get paid to deliver, how the heck do you think you will be paid later?

Suggestions in an earlier post on original Bills of lading is waffle – at an unlikely best you would have product on a quay incurring demurrage; even if you had sold on an ILC your buyer could have met its conditions, got the product and you would still be unpaid because the Greek Central Bank would not / could not remit funds – that is what political risk insurance is for (or an ILC confirmation by an external bank).

Forget the BS time-wasting distraction of TDs and the IDA, the latter can do sweet FA for exporters in a situation like this (outside its ambit) and the former will waffle and talk cr@p because they know nothing. Believe me, I’ve been there.

As for your comments on the strength of the USD and depending on currency differentials to build your business profitability, forget it, you need to build your business on your product – don’t try to outsmart people in banks, you will not succeed.

You have got to take damage limitation measures now. The longer you delay the worse the result will be for you.

On a lighter note, Sinn Fein are over and back to Greece all the time giving advice to Syriza, with whom they share a bed in Bruxelles and if you believe them Greece is going to be fine, Gerry and Pierce are best buddies with Mr Tsipras and are putting him on the inside track!!! (I would not hold my breath, though!)

We can't use Bills of Lading for road shipments in the EU, anyway its pointless. Greece is going to leave the EURO.

As for Sinn Fein don't get me started, the single highest threat to business in the republic.

As for IDA and TD's well... Well I would not have been in business to the extent I am without state support. They have been pivotal to my business.. For example I needed to bring in a client from turkey, their visa was denied. One call from my TD to department of foreign affairs got the clients visa sorted for them to fly next day. (The person had already visited many times before... )

The government (past and present) have / has a great ethic for helping business, at least that is my view when jobs are involved.

pedronomix

TDs, EI and IDA have no role in the basics of commerce, however useful they may be in supports for investment and sorting the odd red tape issue. They are a red herring in this scenario.
You really need to forget about Greece until it is safe to do business there again, concentrate on options to turn the current order into some level of cash, if at all possible. Managing your costs while the business is being re-focussed on new markets and these two tasks will take all your available time. You need to look out for your own business, staff etc, cause sure as hell nobody is going to be looking out for you!

kupus

As above regarding the advice about Ida and Tds they haven't a clue. As far as I'm concerned theyre just jobs for the boys

Now you say you have labels in Serbian. I was going to post about how I could help you develope contacts there. But El rifle has much better contacts there from his post.
So take his advice and try and sell into the Serb market and get some cash for your goods instead of sending them to Greece.
Just be warned Serbia is everybit of a basket case as Greece.

kupus

one more thing....
Serbian language is same as Bosnian and Croatian and similar to Slovenia. They just use Cyrillic alphabet. It's spoken same way
Have you thought about exports to those countries. Croatia and Slovenia are in EU so may be easier in dealing with rather than Serbia and Bosnia.

antoinolachtnai

Just an observation: there is cash in Greece, it just isn't in the banks.

Maybe you could ship goods directly to his customers and get the payment directly from them? You would pay him a commission equal to his original margin.

If this guy is supplying into neighbouring countries, then he has a cashflow from outside the country. If he is dealing in cash, he has cash from there. He can always get his customers there to send you some money (instead of having them pay the money directly to his effectively dead bank account).

If he really wants to pay you and free up the stock, there is almost certainly some sort of way for him to pay you the money that is due, or failing that demonstrate how he is going to furnish you with cash in short order. If you are his major supplier maybe there is some other collateral he could provide (but you would still need to borrow or otherwise raise investment to meet your shortfall and you would need to be paid for this and his business may not be profitable enough.)

I would seriously consider making a visit to see if there is any way of sorting this out. It requires imagination, but that's business.

SpartanRoute

Cork company @SpartanRoute are solving the import/export problem through Bitcoin. Currently 3 staff on the Ground in Athens.

am946745

pedronomix wrote: »

TDs, EI and IDA have no role in the basics of commerce, however useful they may be in supports for investment and sorting the odd red tape issue. They are a red herring in this scenario.
You really need to forget about Greece until it is safe to do business there again, concentrate on options to turn the current order into some level of cash, if at all possible. Managing your costs while the business is being re-focussed on new markets and these two tasks will take all your available time. You need to look out for your own business, staff etc, cause sure as hell nobody is going to be looking out for you!

I beg to differ. TD's and IDA have their limits,, but they know that jobs in the private sector are their bread and butter. FG/FF have been pretty good in supporting the environment for my business. When I go to the TD and say I will have to fire 20 people because X can't happen fast enough then usually things move. We (in the private Sector) give them direction. It does not always work, but I have to say that Irish Government does actually listen to my business. (and I have worked all over the world...)

Ireland does not have a bad Government when I compare with others. They have Jobs as a focus. Apart from Sinn Fein, which has never engaged with us or has a pro-business focus. (my view having tried to deal with them in the north)

pedroeibar1

am946745 wrote: »

I beg to differ. TD's and IDA have their limits,, but they know that jobs in the private sector are their bread and butter. FG/FF have been pretty good in supporting the environment for my business. When I go to the TD and say I will have to fire 20 people because X can't happen fast enough then usually things move. We (in the private Sector) give them direction. It does not always work, but I have to say that Irish Government does actually listen to my business. (and I have worked all over the world...)

Ireland does not have a bad Government when I compare with others. They have Jobs as a focus. Apart from Sinn Fein, which has never engaged with us or has a pro-business focus. (my view having tried to deal with them in the north)

You can differ all you like, but you are wrong and Pedronomix is correct.
Your anecdote about telling a TD you will fire 20 people unless..... is BS. Not the way it works. Been there, seen that tried and the (bloody) result.

Earlier you said you were owed an amount of debt that was enough to close you down, yet later you said you were paid in advance for your product. I asked about that, yet was ignored. Why? You came here with a problem, you got various views and advice, from solid to stupid. Now you are lecturing us on politics, while, supposedly, your business is going down the tubes. Go figure ...why people might believe you just like the sound of your own voice!

pedronomix

Only 640+ posts in two months!
Will be interested to see how they help in getting OPs payments from Greece back on track

kupus

Editing due to been very harsh. And I don't know all the circumstances. But I can only say what i see here. And he has been given wonderful advice here.
All the while giving the Tds credit. Imo dealing with governments is a nightmare, civil servants haven't a clue about anything outside their own comfortable little bubble and they could care less.

pedronomix

well it smells shill to me!

kupus

pedronomix wrote: »

well it smells shill to me!

I know pedro, and that's what I stated. But you never know. I'm the type that if it looks like a duck and quacks like a duck it's a duck. Maybe I'm mellowing out in my old age.

pedronomix

kupus wrote: »

I know pedro, and that's what I stated. But you never know. I'm the type that if it looks like a duck and quacks like a duck it's a duck. Maybe I'm mellowing out in my old age.

you posted it first... I liked it.. you deleted it.. I deleted my "like" .....I posted it again ..deal done!!

micosoft

kupus wrote: »

As above regarding the advice about Ida and Tds they haven't a clue. As far as I'm concerned theyre just jobs for the boys

Not sure why the hating on the IDA here.

First of all the IDA is there to attract inward investment. Why on earth would they be have anything to do with exports

Unless of course you mean Enterprise Ireland. In which case, again, not their job.

It's not the Governments job to get involved in a private businesses exports. We saw what happened with the Beef scandal.

But more to the point, it would be great if people actually thought for a second before spewing invective at organisations for something they have nothing to do with....:rolleyes:

pedronomix

I see OP has closed his acoount! Hmmmm

andrew

pedronomix wrote: »

I see OP has closed his acoount! Hmmmm

Hopefully it's just the account he's had to close :eek: