We talk about this every day here in the office. We question how our members get hooked on for so much money or find themselves in a complicated bind. The answer frequently follows the same pattern: our clients assume they know enough about their customers. With a DRC membership and a little due diligence, you can avoid putting your business at risk:
- First of all, is your customer or prospect a DRC member? If you don’t know the answer to this question, take notice of the red flag waving in the air. We recommend you visit our website to find out if they are a member. If you are unable to find them in our public member list, contact our office, and we can help.
- If you discover your customer or prospect is a DRC member, contact our Trading Assistance Staff to find out if they are a member in good standing. Our Trading Assistance Staff can also provide additional information and guidance that you will find valuable.
- Have you ever requested references and checked on who those references are? Many firms find themselves with nonexistent references or later find out they have a bad reputation. References are only good if they are reputable.
- When someone contacts you on behalf of a company, ensure that the person is an employee or an actual company representative. We have often seen people believing they are dealing with the company receiving the goods when they are actually dealing with an intermediary.
- If your customer or prospect is in the United States, check out “The Perishable Agricultural Commodities Act,” also known as PACA. Here, you can find out the status of their PACA license.
- Is your trading partner in the Blue Book Services? If not, why not? If a firm is not listed, they are either not dealing with significant volume or could be a new business.
- Take the time to learn about the Blue Book Services’ rating system and credit scores. Being listed only means they are either members of the credit agency or they are conducting enough business to show up on “the radar screen.” A company listed without a rating does not mean their business status is “OK”; it could mean they are not ratable or the information on file is insufficient to establish a rating!
- Do the phone numbers, addresses, personnel, and EXACT company name match up with DRC’s records? If they don’t, this could be another red flag.
- Are you doing business with companies that do not have a DRC membership? Or do they at least have a DRC arbitration agreement? If not, why not? You are exposing yourself to needless risk and expense should challenges arise.
Without fear of contradiction, many disputes could easily have been avoided by checking with the DRC and practicing some due diligence before the sale. Everybody “takes a chance” occasionally, but is it worth taking the risk? Consider a DRC membership as your risk mitigation tool.
Peruse the DRC website for more information. Should other questions arise, reach out to our Help Desk. We look forward to assisting you.