Re: Hardware on the Accounts
I think I'd walk away too...
Been there, done that, when its small bits of kit - and you make a few extra crumbs along the way. Generally for the customer they are wanting to buy something but the actual supplier is not a preferred supplier, so they come to you, their friendly prefered supplier, on the basis that paying an extra $50 saves them the hassle of spending 2 weeks getting yet another preferred supplier agreement in place through purchasing, and they want the kit this week. That makes business sense.
When its a $500k order though, that needs multiple layers of signoff and will have the purchasing team involved. they are coming to you because they cannot buy direct. Perhaps they couldn't get the credit terms, perhaps they have maxed their credit limit with that supplier. Without knowing with 99% confidence why they cannot go direct, this ain't a runner.
Finally, theres the downside consequences of doing the deal. As the smaller business, you will inevitably need to pay the 500K to the supplier before you receive the 550K back from your customer. Is 500K a small enough sum that it wont affect your cash flow? What happens if your customer then doesn't pay your invoice? can you swallow the loss?
This kind of a deal only makes sense if it's small enough that it can go bad with you holding the loss, and you can shrug your shoulders and carry on. Perhaps $1K at a time.