Comparing payment options of greenhouse business models

Added on 01 June 2022

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A greenhouse grower and a customer can transact business in many ways. When a grower is selling to larger regional or national retail chains, there are two dominant models: purchase order (or PO business) and Pay By Scan, which is also known as vendor managed inventory.

Each of these models has its own processes, data needs, timing, and pros and cons from both the grower's perspective and the retailer's perspective.

Purchase Orders

A purchase order is a document (electronic or paper) that indicates the specific items, prices, delivery, and other terms for a purchase of goods between a supplier and a customer.

Purchase orders are the way a customer indicates to a supplier what they want to purchase, prices, and delivery terms. In the grower industry, purchase orders are used for a wide variety of business interactions between growers and their customers.

A grower who uses purchase orders with a customer will typically deliver products in whole or part and invoice their customer based on those deliveries made. The invoices are paid by the customer within the terms of the agreement, say due upon receipt or net 30, etc.

In the purchase order transaction model, the customer usually orders exactly what they want and in the quantities they need.