These bankruptcies are a disaster for the owners, employees and sometimes the owners of the shop premises. An often forgotten group are the suppliers of these retail chains. In the period leading up to their customer's bankruptcy, they have actually seen the risk increase. This was because invoices kept getting paid later and later, while they, as suppliers, continued to deliver as usual. The question we try to answer in this article is: what can you do as a supplier to reduce the risk if your buyer slowly gets into trouble and eventually fails.
Retention of title and insurance
It starts very simply. As a supplier, make sure your own delivery and payment terms apply to the relationship with your buyer. Make sure they are clearly stated on all correspondence: offers, orders and invoices. Set a copy aside and have it confirmed for approval. It is important that the conditions contain the extended retention of title (Art. 3:92 of the Dutch Civil Code). In short, this means that the delivered goods remain your property until the buyer has paid all debts. Is your buyer in default? Then you can declare him in default and take back the goods. The retention of title also remains in force in the event of a buyer's bankruptcy.
Right of advertising
If you have not agreed a retention of title because, for example, the buyer's purchasing conditions are in force, there is another - much lesser-known - remedy. This concerns the right of complaint (article 7:39 BW). The right of complaint does not have to be explicitly agreed, any supplier can make use of this legal possibility. It basically comes down to dissolving the purchase agreement because your buyer has defaulted on payment. His title to the delivered goods then reverts to you, allowing you to reclaim the goods. This right also stands in the event of bankruptcy.
Note that you need to act quickly, as this right is not valid indefinitely. The right to recover the goods expires when six weeks have passed since the purchase price became due and more than 60 days have passed since the day the goods were actually delivered.
Collection
If you have delivered goods but they are no longer with the buyer or he has processed them into another product (for example: you delivered some bags of flour and your buyer has turned them into loaves of bread) then the 2 measures mentioned above are no longer of any use to you. In this case, it is advisable to hand the claim over to a legal collection agency. This will give your buyer notice of default, recover interest and costs from him and in extreme cases, file for bankruptcy (often as a means of exerting pressure).
Limit losses with credit insurance
If this too does not work then only credit insurance can still help you. This can ensure that if your buyer cannot pay or goes bankrupt, the damage is limited. Insurers pay out up to 90% of your claim. The premiums are often only a few tenths of percent.
