Of course, every buyer in the world wants to buy enough product from their vendor so they can hit their "free freight" threshold. It is always wise to attain this goal if you can. However, you would be suprised how many vendors are continuing to ship collect to its customers who are hitting these FREE levels.
A customer recently brought to my attention that they found out that they were being billed for freight on a shipment that happened to have met the vendor's free freight policy. I emediately got involved. We wanted to contact the vendor on this apparent mistake. But before we did, we went back to see if there happened to be any more that might have slipped through the cracks.
Much to our suprise, there were more than a few from this particular vendor. Then we started to look at other vendors and we found even more. In just a few minutes of digging, we discovered over $1,000 in freight charges that should not have been billed. Of course, my customer was more than agitated.
So we decided to call all of the vendors right there. They all seemed generally concerned and upset as my customer was. Every one of them was quick to credit their customer and a few of them even lowered their free freight threshold on the next order.
But my customer was still pissed that if they didn't happen to stumble on these mistakes, they would have been unjustly billed.
After talking to the vendors, we pretty much determined the problem was basically laziness on the vendors end. The culprit was that the one hand didn't know what the other hand was doing. In other words, the order would come through sales at the FREE Freight level. But the shipping clerk was not looking at the pick ticket close enough. Then, they were shipping the way they normally do for that particular customer.
At the end of this day, I couldn't help to wonder how common this is. So the following day, I called a bunch of my customers and told them this story. I asked them when they had time to review their receivables to see if they are getting billed on orders where they are hitting the FREE Freight Levels.
Sure enough, there were instances where they were getting nailed.
I thought this was epidemic enough that people should be made aware of this. I highly recommend taking some time and dig through some recent vendor invoices.
If you find more than a couple of these, it might be neccesary to make the effort help stop this. One suggestion is to establish a matching process to confirm every thing is billed the way it is supposed to be.
Another is to implement a rule in your purchasing terms that if you are charged for freight on free freight orders than you will charge back your customers for the freight plus a $150.00 fee for making you go through this hassle. Nothing cures laziness better than a chargeback.
There is another thing that one of my customers brought to my attention. They confronted one of their vendors on why they were billed freight when they hit the free freight level. The vendor explained that even though they hit the free freight levels, they shipped it out on two separate bill of ladings. They basically explained that they were penalizing their customer because they didn't have the inventory. Don't buy into that balongna! It is not your fault they don't have the inventory.
All in all, I beleive good vendors try to do the right thing by their customers. However, their are some slimy people and their are some lazy people. A rule of thumb if you decide to thumb through your files, start with the vendors which already raise question marks. That will be the likeliest spot you will find the biggest nuggets of gold first.
ADVERTISEMENT: For a FREE Freight Cost Savings Analysis to determine the savings to your company contact George Muha at (908) 879-2978 or gmuha@lmiservices.com.
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