Episode 53: Ordered $30K Worth of Materials…Customer Canceled

You got the customer purchase order. You ordered THIRTY THOUSAND DOLLARS worth of material. Now, the customer wants to cancel? What now?!

Today, Ian Sandusky from Lakewood Machine is back to dive into the Practical Machinist forums – and today, we’re tackling some advice for a machine shop owner dealing with exactly this predicament.

What do you do when a customer cancels an order, especially when you have already paid up front for the material? Ian breaks down both the forum’s advice, along with some of his own.
First, the best offense is a good defense – and this is especially true when it comes to negotiating terms. When dealing with a new customer, it’s always best to put in the work up front to protect your company’s best interests – typically with some form of a deposit against the work / material, with the remainder due upon completion.

As this shop owner has already unfortunately found himself at a point beyond where this strategy would help, a good secondary option is to negotiate a buyout of the material with the customer. Failing that, we move into the less glamorous world of chasing up money owed, and how to best protect against falling into this trap a second time moving forward.
What’s YOUR best advice for handling customer cancellations?

Grab the discussed forum thread here.