Indiana hay grower Dennis Heaton screens customers as part of a process to better obtain payments for hay delivered out of state.
“A few years back, I got stuck for close to $10,000 by a buyer who didn’t pay up,” he says. “It’s something I don’t want to happen again.”
At Agri Venture Hay Farms, Heaton, and his wife, Jean Ann, put up 50-lb, small square bales of alfalfa-grass hay on 250 acres near Russiaville. Horse owners and feed stores in Georgia, South Carolina and North Carolina make up their primary market. The Heatons’ full-time truck driver, Tony Perez, delivers the hay using a semi owned by the farm.
Potential new buyers are screened by phone or email. “ ‘How are you going to pay?’ is one of the first questions I’ll ask a new customer,” Heaton says. “If they balk or show any uneasiness, I take it as a sign they don’t have the money and that I should be very careful about shipping any hay to them.”
Once he’s satisfied about the customer’s ability to pay, Heaton sends a two-flake hay sample via UPS. “I guarantee that the sample is from the same lot as the hay I’ll eventually be shipping. I make it clear that, once we have an agreement, the hay can’t be returned.”
It typically costs $20 to ship the sample and he also pays for and sends along a lab forage analysis. “It’s a little money out of pocket, but this way people know what they’re going to be getting when they order from me,” he says. “It gives them more confidence about what kind of hay they’re likely to be getting.”
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Any buyer who wants the hay is required to sign and return an agreement form also sent with the sample. “It basically says they have room for the semi to get in and out, that they’ll trim any tree limbs along the driveway which might rub against the truck and that they’ll have the labor and equipment on hand to get the truck unloaded in a reasonable period of time. They also agree to take the hay at the agreed-upon price and to pay the driver with a certified check or cashier’s check before he unstraps the load.”
While a few customers return forms by mail, most either fax or email them to Heaton.
With new customers, he asks that a 10% deposit be sent before the hay leaves the farm. “I tell people that it will be a minimum of two weeks from the time we agree on the sale until the hay leaves the farm. That gives the check time to clear the bank before the hay goes out on the road.”
The new protocols have been in place for about three years. “It’s worked out pretty well for us. We just haven’t had any problems getting paid since we started doing business this way,” Heaton says.
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