The company has been burned over the years, he said, and because the firm works on such a fine margin, it could not risk a customer’s bankruptcy.
The credit policy at Consolidated West always has been tough, Young said.
“We’re not obnoxious about our policy, but we’re pretty frank about it,” he said.
The company knows the status of the customers it deals with.
“No produce company can be a banker and produce company at the same time,” he said.
Steve Cantor, director of sales and produce and partner in Produce International on the Los Angeles Wholesale Produce Market, said his business partner, Steve Kiwano, does a good job minding the company’s finances.
“I’ve got a partner who’s very tough on issuing credit around the market,” he said. “We’re a lean and mean company. We run a tight ship.”
Paul Vogel, managing member of QSI LLC, Los Angeles, said the marketplace is transitioning from a traditional physical model to a digital one.
“The globalization of our economy combined with the explosion of technology has inverted the distribution model,” he said.
Smartphones have empowered consumers, and advances and expansion in the logistics industry provide direct access to the consumer from unlimited sources.
“The impact of these changes on the Los Angeles Wholesale Produce Market and our industry are significant,” Vogel said. “The role of the traditional middleman is outdated.”
Companies that don’t adapt to the fundamental shifts in the industry and the economy will find themselves “going the way of kerosene lanterns in the age of electricity,” he said.