Why we protect our vendors’ rights?

As the owner of a small advertising outfit, Write Solutions, I have to often work on both sides.

There is work that sometimes needs to be outsourced to specialist agencies, generally smaller than us in scale, and there are times when work is outsourced to us by graphic houses bigger than us. Because of the scale difference, there is little room for negotiation in the latter scenario. But in the former, early on in my business, I decided to play fair by my vendors. 

I decided that for the mark-up that Write Solutions would keep over the vendors’ fee, we would assume all the risk inherent in a project. So, whether a client pays or not pays us on time, our vendor must be paid as soon as the work is delivered. 

I am glad to observe that in the past 15 years of our business journey, this policy has paid us rich dividends. Undoubtedly, at times it has caused some cash flow issues, and the bigger risk of facing a defaulting buyer, but we should remain protected and risk-free in this deal.

Indeed, with a disciplined adherence to this policy, we have never lost a vendor and each one of our vendors now feel more like an extended family of co-workers than vendors, upon whom we can bank upon at any time of need, whether I am undergoing a surgery, or out on a vacation. 

On the flip side, we have not been so lucky with our buyers. On a few, sad occasions, we have been denied the second half of our payment by a defaulting client on the excuse that we have never used with our vendors- that they have yet not been paid by their clients for whatever reason. And I’ve always wondered how can we be held responsible for a mishandled, misjudged contract – when we got no direct brief from the client and delivered on time as dictated by the middleman? 

This happened recently in the case of one Shreenath Builders in Mumbai. The graphic design agency, Shroff Graphics, owned by one Bhavin Shroff that won the contract from the builder, outsourced the work to us, and it's been four months since the delivery but the agency is refusing to settle the balance saying they have not received the payment from the builder.

A week became a month, a month rolled into four months but no luck. I looked up Shreenath Group's CEO’s email and wrote to him but till date there has been no response from the agency or the builder.