Problems arise if the shop is then unable to pay its debts, or worse, goes under having sold the products without having paid the supplier. Without proper protection the supplier may be just another unsecured creditor – unable to get the product back and unable to be paid.
Properly drafted Terms of Trade help protect your position as supplier. They can ensure you retain a security interest in, and ownership of your product until it has been paid for.
A vitally important, and often overlooked step, is to then register your security interest with the Personal Property Securities Register (PPSR), prior to dealing with each shop. This elevates your security interest meaning you are more likely to recover your stock or funds owed to you if a shop goes under.
For more information about the PPSR see our article How to secure your debts.