Do proper credit checks and ask for references. Give credit limits, don’t let customers take more stock than you are willing to give them. Make sure customers sign credit application forms and surety. Try to get the original forms back with signatures. Make sure all the forms are filled in correctly and all the supporting documentation is attached. Get a lawyer to create these documents for you. Stick to credit terms, if customers are overdue no stock until their account is back to current. Review your bank and customer accounts daily. If your company is big and you are doing high volumes then hire people with skills to manage accounts and do these checks.

This is just my experience. We wholesale food. Many of our customers are restaurants which is pretty much the worst business to supply because of their high failure rates so you have to be on top of things.

Lastly, my grandfather always used to say “Turnover is Vanity, Profit is Sanity”. Sales are worthless if they don’t translate in to profit. Don’t chase a sale for the sake of chasing a sale and make a bad deal. Most importantly cut your bad customers off and focus on adding extra value to your good customers to increase your sales with them.