Richard Gottlieb

Checking back in with reps on late payments from manufacturers

It looks like the cash flow for non-publicly held toy manufacturers has not deteriorated since I last checked in with reps in August. I base this on my latest rep feedback.

If you will recall, back in August, in a blog entry entitled “Are Toy Manufacturers Feeling Some Financial Pain?” I noted that it is difficult to know how economically healthy most toy manufacturers are because there are so few publicly held companies. I proposed that that asking reps if their commission payments from manufacturers were lagging would give us a feel for how toy manufacturers were doing. Why, because “independent sales reps are the canary in the coal mine*. They tend to be the ones that are first affected when a manufacturer struggles with its cash flow. 

So, at that time I contacted reps and asked them to answer the following choice:

[  ]  I have had an increase in the number of companies paying late.
[  ]  I have not had an increase in the number of companies paying late

Two-thirds responded by checking off A, that they had had an increase in companies paying late.  

I went back to the same reps and this time found that things have not worsened since August.  This time, 2/3 of reps responding said that they had not had an increase in the number of companies paying late. 

As I said back in August, this is a small sampling and too much should not be made of it. It is, however, one small indication of how things are going. I will check in again after Hong Kong and get some more feedback. 

I think this is an interesting indicator so would like to involve more reps in providing information. If you are a toy rep and would like to provide me with your feedback, please feel free to do so by emailing me. I will keep your name and feedback confidential.

Posted by Richard Gottlieb on December 21, 2008 | Comments (0)