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The Produce Credit Rating System is a FAILURE

Updated: Mar 4



Over the past years, our industry has evolved more than ever. Our world revolves around ratings of everything. Whether it is a Google rating, Facebook Rating, Yelp Rating, or a Bluebook Credit rating, it's all a bunch of extra nonsense we have to deal with. For the life of me, I do not understand, and I speak for many in the fact that our industry credit rating system is flawed. No one asked you if you wanted one. No one told you when you got one. Even then, they don’t tell you what yours is or means. No, you have to ask—and pay—to look at your industry score because others read it. Yet that number plays a severe role in your company finances, your brand, and your future if you ignore how it's determined. It is being monitored by one particular company with no ground experience or skin in the game. They still use fax machines, I believe, no wonder no one sends back info. It bothers me deeply that no one will ever stand up for what is right in this industry to benefit the industry as a whole. Have any of you asked for your name removed from the service, I have.



Did they listen no, will they if more as yes. If you ignore a rating review problem when it appears, it tends to grow in power every day from people who do not know you or your brand. Soon, you’ll get emails, calls, or various unjustified industry grumblings. That’s especially true if your brand is always in the limelight and catches the industry's attention. My favorite is when someone who dislikes you can make a false because the current system says they can. When that happens, the story tends to spread all over the place like wildfire. The question is, how do we, as an industry, bring reform, integrity, and credibility to an industry in desperate need of it. Let us first take a look at a few questions revolved around our industry and see just how these things can affect the overall picture.



1. Do you have as much COD (cash on delivery) business as you used to?


2. What is your average customer paying their terms in? (7,14,21,28,35 or more)


3. Do you maintain the highest required level of food safety requested by your customer base?


4. What is your average cost of each package sold today vs ten years ago? My guess would be at least $8.00 higher.


5. How much has the price of the trucks in your fleet gone up over the last ten to fifteen years?


6. Have you ever seen commodities fluctuate the way they do now? What does this do to your incoming and outgoing cashflow?


7. How much has your insurance costs risen over the years? Varibles include things as food safety, natural disasters, workman's comp, etc. How much did this affect your overhead?


8. Has the price of your technology costs risen?


9. Has the price of labor within your company gone up?




Things the credit company's do not understand:


1. What is the definition of the following question: Does asking the question if someone is paying in terms have a real definition? Case and point what if a distributor has an agreement to pay someone in 90 days and someone else in 21 days, and they are paying both within the agreement? Does the answer to this question become yes on both? I thought so. Could a wrong person fill out a survey for a company and see someone is on 30 days, and the underlining agreement was 90 days, thus answering no? Yes, this can happen, and once again, the system is flawed.


2. What is the cost of growing a business 5-10x over a few years, and what will that do to a company's cash flow without borrowing operating capital? In a business built on partnerships and agreements, why would any distributor bring in banks, investors, or partners when they have several they grow with every day.


3. How many times have the companies who have gone out of business saved potential creditors from losing money? I would go out on a limb and say most likely never because once again, the information is flawed, delayed, and not reported correctly.


4. How many times do we by human error skip invoices? How many times do we out a price after sell invoice to the side? How many times is the agency reaching out to the wrong party?


5. How many times are we too busy to update a list of creditors that are really none of someone else's business to see?


6. Why is anyone outside of our bank or potential partner privy to our financials?


While I could write all day about this, the point I am making is I want to see change. My brand was given a black eye, which inspired me to write this. I always try though to turn a negative into a positive for our industry.


The moral of the story is these companies do not care about special circumstances or the industry as a whole. Everything is either black or white. There is no consideration of a company or person's essential character or allowance for the fact that industry can change, especially over 118 years. These companies often look at data and assign a number to it. These negatives stay on your rating report in the same fashion that guilty murderers have been known to walk out of prison on appeal or probation. The best part is often those criminals can get through the system in less time than it takes to clear one’s false rating history.



Where do we go now?


We may not be able to eliminate industry rating as a system, but we can demand change. First there needs to be an appeal process that is transparent run by a company that knows the state of the industry. Customers should be able to speak with a company who has the industry knowledge, skills, and expertise to assess both the assets and the character of the customer.


1. We need a new system, and someone to do it right.


2. The world is revolving around #metoo movements, so I suggest if you were affected by false reporting, speak up, share it, and report it.


3. Request to be removed from reporting as I did. I will say they are not listening, but petitions are very powerful, so that will be the next step.


Lastly, its all simple communication that makes the world work. If someone is paying you slow or you have an issue, then pick up the persona and call the person. Do not be a bully hiding behind an agency out of touch, which will not help you get your money. The truth always comes out anyway, and I like to believe that most people are good, and they will pay you what they owe you.



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