Don’t Let The Hand That Feeds You Bite You

Jim Luff
Posted on July 2, 2014

I was recently contacted by a small operator in Boise regarding a potential story for LCT Magazine. Unfortunately, it will never make the magazine. It is an all-to-familiar tale of a big kingfish operator preying upon a little operator.


Here’s the story with a moral at the end. In the 1990s, big companies like Music Express, CLS (not Empire/CLS), Dav El, Carey and other large networks financially exploited little guys like me. I was so eager to get “in” with the networks, I would gladly take their last minute rush orders and invoice them hoping for more work and more invoices.
 
Music Express and the original version of CLS were not bashful at all about telling you their payment terms were Net 60. If you wanted to play ball with the big boys, that is how the game was played. It was not uncommon for payments to take 90-days. If you made a stink about it, they would simply give their work to someone else in your city and punish you for even asking about the money.

Well, at some point, after nearly reaching the point of bankruptcy and taking a few financials baths because companies such as CLS fell from grace and left me holding the bag, I said, enough is enough.
 

I am in the business of providing transportation services. There are companies such as Capital One and American Express that are in the business of financing. I figured I would let them do what they do best and I would do what I do best. If you want to use our service, you pay up-front. I don’t care who you are, how big you are, how long you have been around — it’s money up front before the garage door even opens.

That’s right!  We run the card for the estimated amount BEFORE the run. I don’t ever have to worry about seeing the dreaded “DECLINE” message after the run has been performed. If we owe them money at the end of the ride, we refund them promptly.  Some affiliates get mad, but if they knew the road I have been down in the past 24 years, they would understand.  
 
Now, back to my friend in Boise…..chances are there is no signed contract in place.  There was no client signature obtained.  There is no back-up credit card on file for delinquent accounts and the bottom line is, the $1,300 balance will be an end-of-year bad debt write-off.  That money will never, ever be paid. In a conversation with LCT Publisher, Sara Eastwood about this situation, she advises, “Today is a whole new world and you better have your bases covered.”

— Jim Luff, LCT contributing editor

Related Topics: affiliate networks, bill paying, credit, farm-in farm-out, Jim Luff, saving money, service pricing, small markets, small-fleet operators

Jim Luff Contributing Editor
Comments ( 4 )
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  • Christine Bennett

     | about 4 years ago

    I the Boise friend do have a signed contract but that can be used as toilet paper as they do not honor this ! I have collection agency on the collection process calling and notifying them of the invoices were due long ago . Next time yes get a credit card and yes we live in a whole new world but even with a authorization on a card they can cancel card and you are screwed if they plan on stealing your money they will do so at all cost , makes no difference it is like hiring a thief if they want to steal they do it and find a way to do so . You can have credit card authorizations, contracts , checks they can cancel until you have the cash in hand you are working for FREE and on a hand shake the thing that gets me is that these thief's get great media coverage, articles written about them and how great they are this is up setting so always let the truth be told the bigger they are the harder they fall ! I have studied and learned from the best we were in a lunch meeting with a big affiliate eating there food drinking there beverages and this was 13 years ago a man by the name of Jim Luff stood up and said in the middle of the meeting a big crowded room how come you guys are not paying your small operators like me that are doing the work for you ? good ? as every one else wanted to stand and say the same thing but was scared to do so ! as the affiliate had a very surprised look and red face they tried to smooth over the ? Jim did not back down he did not let them skirt the ? at hand and was paid shortly after funny thing my company was paid as well on the out standings one week later it takes a few big waves some times and squeaky wheels to chase down your money at the end of the day . I thank all the big . strong ,out spoken men with integrity that make this industry what it is !

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