Reports that Canadian subscription box supplier Nerd Block has gone to the wall is bad news for an army of suppliers waiting on months of unpaid invoices.
Subscription boxes are big business, and the market is growing by the day. With the success of major brands such as Loot Crate charging £20 or more for a monthly box of goodies delivered to your door, similar companies have sprung up around the world.
They come in all shapes and sizes, and for all sorts of markets, from supplying beauty and fashion products to healthy snacks.
What they all have in common is they need products to fill their boxes with. Subscription box companies procure a selection of items from a wide variety of suppliers, and package them up into a single box for customers to enjoy. Many of the items will be one-off exclusives, meaning suppliers may only get short-term contracts.
What happens if you're a supplier to one of these subscription businesses and they get into financial trouble? What about if you are based in a different country to the subscription box service? That's precisely the situation with now-insolvent company Nerd Block and their suppliers, many of which are based outside Canada.
A Company in Distress
Nerd Block branded itself as specialising in ‘nerdy/geeky’ items such as toys, memorabilia, and clothing connected to cult films, TV shows and so on. Its boxes contained a weird and wonderful range of items, including custom-made comic books and branded clothing.
Over the past year or so, Nerd Block subscriptions plummeted dramatically, reportedly amidst complaints from customers over the overall quality and value of the product they were receiving. It soon became apparent Nerd Block was in difficulty and suppliers started to have difficulties securing payment.
Some, such as book publisher UDON Entertainment and clothing company Zen Monkey Studios, have taken to social media platforms such as Reddit to inform Nerd Block customers and the world that many suppliers have not been paid for months. Although they received a great deal of sympathy from the general public, the chances they will ever recover the money due to them for their months of work is now slim.
How Suppliers Can Protect Themselves
Once a company is declared insolvent, as Nerd Block appears to have been, the chances of suppliers recovering overdue payments become remote. The key in situations like this is to act fast. For many of Nerd Block’s suppliers, the writing was on the wall for six months or more before they finally realised they wouldn't be receiving payment for all of their work.
If you suspect a debtor is in financial difficulties, you cannot afford to wait until they go under. Swift action to recover debts while the company is still solvent is essential.
Of course, in the case of Nerd Block, the company was based in Canada and many of its suppliers were based elsewhere. The complexities of different legal jurisdictions, time and distance can put many small independent suppliers off taking decisive action when it comes to debt recovery.
If you find yourself in this situation with an overseas client, a good debt collection company can make all the difference. Safe Collections works with affiliated partner agencies all around the world to offer the same services and costs for international debt recovery as you would expect for domestic recovery services. The important thing about professional debt collection services is that they take action in good time and specialise in swift resolutions - even when dealing with international debt.
Had Nerd Block’s suppliers contacted a debt specialist as soon as it was clear there was a problem getting paid, they may have been able to recover the monies owed to them before the company folded.
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Our modest but highly skilled team has a combined total of over 150 years of experience in commercial credit management and B2B debt collection. From independent IT contractors to major film and TV publishers, Safe Collections has the knowledge and experience you need to get paid quickly and cost effectively.