Tales Of A Fourth Generation Textile Executive: Factoring Revisited
Dear Valued Jaftex Customers,
I want to revisit the factoring discussion because we have officially begun the factoring process. 
Here are a few reasons why we have moved to a factor:
- Since buying FreeSpirit Fabrics, our receivables have dramatically grown. It is no longer easy for our in-house credit team to manage the magnitude of collections. It was the proper time to move this to a professional company that specializes in collections. Welcome Milberg Factors, Inc.!
- Recently, our in house credit team has spent an inordinate amount of time chasing down customers for payments. Sometimes it could take over a dozen phone calls, stretching over a very long period of time, and result in very late payments for which we should charge an extra fee, but don’t. It isn’t fair for some customers to make it so difficult for us to collect monies owed when they have had the fabric for months.
- It was a major challenge to get customers on the phone to get permission to charge their cards. Again, this consumes way too much of our credit teams’ time and is very unproductive. As you know, we addressed this earlier in the year by informing customers that we would charge their cards when invoices were due WITHOUT calling for permission. Ironically, it was interesting to see how quickly people called to complain about their card being charged, but when we called for permission to charge, there were crickets. Funny how that works.
- Our credit team was too lenient and worked out various ineffective, but very customer friendly payment plans. In other words, we were way too nice. In some cases, customers were allowed to pay $50 a month until they paid a $700 bill. That is just not a good business move or policy. Moreover, it is a lot of extra work to have to call and collect the $50 every month.
- We knew that other companies in the industry used factors too and therefore presumed this wouldn’t be such a shock for most customers.
In general, you should know that the only customers that will be factored are those that purchase over $10,000 in fabric amongst all the Jaftex Companies in a year. Accounts that buy under $10,000/year will continue to deal with our in house team. Any customer purchasing over $10,000/year from all the Jaftex Companies combined, will be factored. This is important, so please listen carefully: if you buy over $10,000 in fabric from us on an annual basis, you MUST move over to the factor. It is not optional, nor negotiable. We can’t make exceptions for people otherwise it defeats the entire purpose and makes the entire factoring proposition a waste and it will backfire on us.
With that, I want to kindly ask that you cooperate with the factor and try not to rock the boat for us. We aren’t trying to be difficult, but rather, we are just trying to run a better business. When the factor contacts you, please provide sufficient information, at a minimum, for them to be able to set your account up with them. Moreover, don’t cut off your nose in spite of your face and decide not to do business with us anymore over the implementation of the factor. Realize that if you choose not to go with the factor that you will no longer be able to buy from ANY of our companies. We really don’t want this and hope that you value the partnership enough to keep it going strong. Know that we are moving to the factor so that our business can run more smoothly and we can ship your orders quicker.
As you already know, my family has been in the business for nearly 90 years. We have no plans on going anywhere soon. We could potentially grow even more in the future through acquisitions and want you to be there with us the whole way through. Again, please help us by moving forward in a positive direction with the factor. On behalf of my family and I, we thank you in advance for your cooperation and patience as we make this transition. Feel free to email me at scott@jaftex.com or call me at 800-294-9495 x218 if you need to discuss anything related to factoring.
Have a great week.
Factoring Fortunoff
P.S.S….. This week is a great week to see what’s going on by following my Facebook live videos as I tour two top quilt shops in the US.
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9 Comments
Scott Fortunoff
You are too funny barb, but I appreciate that you comment on just about every blog post. Thanks for your kind words always!
xxoo
Scott Fortunoff
Wow, moving up to FabShop..good for you Abby. Funny how we seem to be talking about the same stuff of late. I guess great minds think a like….lol. I tried not to get too granular in my blog b/c I don’t want everyone to be like, “what the heck Scott.” Maybe you delve in to more detail which would be great. Looking forward to reading your article as I always read FabShop cover to cover.
Regards,
Scott
Sylvi Sealy
Thanks for explaining about factoring and why it is needed. Although factoring is completely new to me, I have absolutely no problems with it as I’ve always paid my invoices on time and often way before due date. I owe nothing to Westminster Fibers! Yay!! However, I do need more information about exactly how payments to Milford works. I’ve had a phone call from Milford Factoring and answered the questions, but was left feeling I was “applying for an account” with them. But I know better now thanks to your explanation. I haven’t received any information about HOW to pay Milford by wireless transfer i.e. account number/bank details etc. I would like that information soon so I can set up an online system with my bank. The only other option Milford gave was to send an old fashioned check in the snail mail and I won’t be doing that. Too risky it getting lost and be charged interest.
Thanks you for continuing FreeSpiritFabrics. We will all be better off with this new system.
Sylvi
Scott Fortunoff
Hi Sylvi,
Thanks for your comments. I think when you get your invoice that it will all be self-explanatory. It will advise where to send the money. If you are an account that will be factored, they will keep your abreast of your balance and such. I think you can just sit tight and it will all become clear. Have a great day! Thanks for being a customer.
Regards,
Scott
Dawn Boehmer
Well said!
Linda Chase
The only reason I prefer a phone call before shipping is not knowing when the fabric will charge and ship. I can plan for one month and it be earlier or not ship until the next. Can we set up a “do not ship until (date)” and still receive it? Thanks, Scott.
Scott Fortunoff
Hi Linda,
You should be set up in our system whereby you would get an invoice when you were charged if you pay by credit card. So that is really the clear sign for you.
When you place orders, please write when you want the orders to ship. I think that should cover it. Give it a shot and see how it works out.
Thanks Linda!
Regards,
Scott
Leah Kabaker
As an end user, ie. the customer who buys fabric to make quilts, I really enjoy this look behind the scenes at the industry. 25 years ago I worked in the garment distict in LA, as an in house textile designer, so yeah, I can do repeats and change colorways by hand… It’s a tough business, good luck to you. I love watching you grow and thrive.
Scott Fortunoff
Hi Leah,
I am glad that you are enjoying all that is the fabric industry. Thanks for following along. I am hopeful that we grow and thrive, but thanks for the support and kind words.
Regards,
Scott