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#1 of 25 Old 12-04-2005, 04:14 AM - Thread Starter
 
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I've been trying to get around to replying to a few posts recently regarding selling wholesale, but I've lost track of them. Anyway, my business has gone from about 10% wholesale to about 60% in the past 6 months and I think a lot of it has to do with getting my policies ironed out. Well, that and contracting with some product reps, but I wasn't able to do that until I had all my ducks in a row. I went to SCORE and had an advisor there work with me tirelessly on my price list and terms. I feel a little weird about just sending it out to anyone--it is a confidential price list after all ;-) I will, however, share with you what it contains. I hope that if you are considering wholesaling this will help you.

WHOLESALE PRICES AND SRP
This is for each item I wholesale. I "hear" people on this board leaving the retail price up to the stores, but I think (ok, I was convinced) that it is up to you to determine the selling price.

MINIMUMS
How many of each do they have to buy? How much $$ total? Is it different for opening orders and reorders?

PAYMENT
Do you offer terms? Payment up front only? Who pays shipping? What forms or payment do you accept?

DELIVERY
How soon do you ship? Which carrier? Who is responsible if there is damage to the product during shipping?

RETURNS
Do you accept them? What about trade-backs or restocking fees? How long after the order ships do they have to make a claim/make a return?

ALLOWANCES
Do you consign, drop-ship, or exchange? What about advertising allowances or shrinkage allowances?
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#2 of 25 Old 12-04-2005, 02:00 PM
 
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That's great info! Thanks for posting!!
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#3 of 25 Old 12-04-2005, 03:04 PM
 
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Yes - this is very good information. It might even be good to sticky - ?
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#4 of 25 Old 12-04-2005, 03:54 PM
 
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what are advertising and shrinkage allowences?
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#5 of 25 Old 12-05-2005, 06:39 AM
 
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shrinkage = shoplifting. I don't know what advertising allowances are.
I am assuming that you mean that you want to make sure that you put in your contract that they are responsible for any shoplifting that may occur.
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#6 of 25 Old 12-05-2005, 01:52 PM - Thread Starter
 
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Regarding shipping and advertising allowances--These are something that my SCORE advisor encouraged me to put into my terms, just in case I get that big call from the Macy's buyer or the Nordstrom buyer (snort.) An advertising allowance is when the manufacturer kicks in to a store's advertising campaign. Like Carter's pays for a chunk of our local store's Baby Sale every year. This might be something a small boutique might ask you to do, but probably not. A shrinkage allowance is a small percentage that these big stores might ask for to help them offset shoplifting and employee theft. Again, probably not something a small store will ask for, but I was encouraged to put "we do not offer a shrinkage allowance" in my terms just in case....
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#7 of 25 Old 12-05-2005, 02:31 PM
 
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Quote:
Originally Posted by klink2
just in case I get that big call from the Macy's buyer or the Nordstrom buyer (snort.)


These are good things to know, indeed. So, do you have a contract that you send them a hard copy of to sign and return?
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#8 of 25 Old 12-05-2005, 03:04 PM - Thread Starter
 
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Originally Posted by art4babies


These are good things to know, indeed. So, do you have a contract that you send them a hard copy of to sign and return?
No, I just send it when I'm asked for wholesale prices and I assume that by ordering they are accepting the terms. I also put a copy in the box when I ship the products, with the return policy highlighted, as a "reminder".
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#9 of 25 Old 12-05-2005, 04:55 PM
 
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Quote:
Originally Posted by klink2
I just send it when I'm asked for wholesale prices and I assume that by ordering they are accepting the terms. I also put a copy in the box when I ship the products, with the return policy highlighted, as a "reminder".
Ah - that sounds reasonable.
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#10 of 25 Old 12-07-2005, 07:45 PM
 
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klink2 - let me first say, that I am so glad you have found this forum. You have been a generous wealth of information and resources.

Secondly, I thought I would post this to see if it seemed reasonable. I am certainly open to critique (as always) and would love some feedback. Does it seem to strict? Not strict enough? Did I leave something out? Is something here better left out? Etc.

Wholesale Contract

Acceptance of our merchandise acknowledges compliance with the below agreement / guidelines.


WHOLESALE PRICES AND SRP

-Retail prices, including sale prices, shall not be set below the non-sale prices listed on babyfairies.com (A current SRP listing is attached).
-Retailers will be notified via email two weeks prior to any price changes made by babyfairies.com to allow for retail price adjustments

MINIMUMS

-There are no minimum order requirements.

PAYMENT

-All payments must be received in full prior to merchandise shipment.
-Form of accepted payment:Paypal
Money Orders / Cashier’s Checks

U.S. Retailers Only:
Business / Personal Checks
***One-week allowance prior to shipping for checks to clear***
DELIVERY

-All shipping costs will be paid by the retailer.
-All in-stock items will be shipped within three business days of purchase via USPS with delivery confirmation.
-Babyfairies is not responsible for damage that occurs during shipping.
***in our three years of business, we have not a single item damaged in shipment***

RETURNS

-Return claims accepted within three months of original purchase.
-Returned items must be received no later than one week from date of claim.
-Returned items must be in new condition with original hang-tags attached.
-A $5 re-stocking fee will apply to all return orders (not per item).
-All return shipping costs will be paid by the retailer.


Exchanges

-The retailer will pay all shipping costs.
-A $5 re-stocking fee will apply to all exchanged orders (not per item).
-The retailer will pay the shipping costs of new item(s).

ALLOWANCES

-We do not offer consignment or drop-ship, nor do we allow for shrinkage or advertising.
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#11 of 25 Old 12-08-2005, 10:11 AM
 
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Quote:
- Returned items must be received no later than one week from date of claim.
Not that you are asking ME, but one week is a little short, especially around this time of year. I had a priority package take 7 days from PA to MI
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#12 of 25 Old 12-08-2005, 12:49 PM
 
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Quote:
Originally Posted by klink2
Regarding shipping and advertising allowances--These are something that my SCORE advisor encouraged me to put into my terms, just in case I get that big call from the Macy's buyer or the Nordstrom buyer (snort.) An advertising allowance is when the manufacturer kicks in to a store's advertising campaign. Like Carter's pays for a chunk of our local store's Baby Sale every year. This might be something a small boutique might ask you to do, but probably not. A shrinkage allowance is a small percentage that these big stores might ask for to help them offset shoplifting and employee theft. Again, probably not something a small store will ask for, but I was encouraged to put "we do not offer a shrinkage allowance" in my terms just in case....

Hmmm, this is an interesting concept. I wouldn't mind kicking in some money so that my distributers could advertise. What % would I offer? And would it be if they advertised my product the most vrs the others?
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#13 of 25 Old 12-08-2005, 03:08 PM
 
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Quote:
Originally Posted by Izzybee
Not that you are asking ME, but one week is a little short, especially around this time of year. I had a priority package take 7 days from PA to MI
yeah, but she can always check a postmark to see that someone intended for it to get to her in time, and hten make allowances if needed...

Robin~ single, work-at-home momma to my WonderBoys
YoungMan (6/00) & LittleBoy (6/04)
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#14 of 25 Old 12-08-2005, 03:29 PM
 
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Quote:
Originally Posted by Izzybee
Not that you are asking ME, but one week is a little short, especially around this time of year. I had a priority package take 7 days from PA to MI
Precisely why I laid it out there. It was a lot to type up and think about, not having ever done it, so your thoughts are greatly appreciated. Thanks!
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#15 of 25 Old 12-08-2005, 03:31 PM
 
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Quote:
Originally Posted by rubelin
yeah, but she can always check a postmark to see that someone intended for it to get to her in time, and hten make allowances if needed...
Right, I could say something like "posted within a week of notice." That seems fair and covers more bases. I find this dialogue very valuable.
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#16 of 25 Old 12-08-2005, 03:35 PM
 
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Quote:
Originally Posted by rubelin
yeah, but she can always check a postmark to see that someone intended for it to get to her in time, and hten make allowances if needed...
I know what you are saying, but it said MUST BE RECEIVED
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#17 of 25 Old 12-08-2005, 03:45 PM
 
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Quote:
Originally Posted by Izzybee
I know what you are saying, but it said MUST BE RECEIVED
Right, the wording definately needs to be changed.
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#18 of 25 Old 12-08-2005, 04:03 PM - Thread Starter
 
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Quote:
Originally Posted by art4babies
klink2 - let me first say, that I am so glad you have found this forum. You have been a generous wealth of information and resources.
Thank you. I'm glad I can help!

Quote:
Wholesale Contract

Acceptance of our merchandise acknowledges compliance with the below agreement / guidelines.

WHOLESALE PRICES AND SRP

-Retail prices, including sale prices, shall not be set below the non-sale prices listed on babyfairies.com (A current SRP listing is attached).
-Retailers will be notified via email two weeks prior to any price changes made by babyfairies.com to allow for retail price adjustments
Personally, I think it seems a little complicated and restrictive. I think most retailers want to sell at the msrp, because that is how they'll make the most $. I've had several online stores buy my things, and I've never seen them listed below what I sell them for--especially if msrp is twice your wholesale price. So I'd say, as an example: Kimono $16--SRP $32

Quote:
MINIMUMS

-There are no minimum order requirements
Really? The only way to make money selling at wholesale prices is by selling larger quantities. I have a minimum $ and a minimum quantity for each item.

Quote:
PAYMENT

-All payments must be received in full prior to merchandise shipment.
-Form of accepted payment:Paypal
Money Orders / Cashier’s Checks

U.S. Retailers Only:
Business / Personal Checks
***One-week allowance prior to shipping for checks to clear***
Seems reasonable, although you might want to eventually consider taking credit cards. This is how over half of my wholesale customers pay.

Quote:
DELIVERY

-All shipping costs will be paid by the retailer.
-All in-stock items will be shipped within three business days of purchase via USPS with delivery confirmation.
-Babyfairies is not responsible for damage that occurs during shipping.
***in our three years of business, we have not a single item damaged in shipment***
Let's say someone places an order and they want 2 each of 7 different skirts. How long will it take you to complete?

Also, I'd leave out the stuff about damage. Everyone has a story to tell about shipping nightmares. You might offer insurance as an option when you ship.

Quote:

RETURNS

-Return claims accepted within three months of original purchase.
Yikes! This is a whole new season! What if someone returns 5 summer dresses in October. What will you do with them?

Quote:
Exchanges

-The retailer will pay all shipping costs.
-A $5 re-stocking fee will apply to all exchanged orders (not per item).
-The retailer will pay the shipping costs of new item(s).
I think it is standard to have a restocking fee that is a % of the total order. $5 isn't much if they're sending back $500 worth of products. As I mentioned in a previous post, you might want to consider a trade-back program instead of an exchange or return policy. Otherwise, you might as well be consigning everything.
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#19 of 25 Old 12-08-2005, 05:17 PM
 
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Okay, first let me say, that my wholesale discount isn't nearly 50% of my RP. That may make a lot of these points on my contract a little clearer. There is just no way I could make a mimono for $16 and make more than a couple dollars profit. I know I need to raise my prices, but since I raised them the last time I haven't had a single sale, so... I will just have to wait for a bit (get more stock) and then advertise.

[QUOTE=klink2]
Personally, I think it seems a little complicated and restrictive. I think most retailers want to sell at the msrp, because that is how they'll make the most $. I've had several online stores buy my things, and I've never seen them listed below what I sell them for--especially if msrp is twice your wholesale price. So I'd say, as an example: Kimono $16--SRP $32
[/QUOTE=klink2]

The only reason I did this was so that they couldn't undercut me, if they at all wanted to. Do you suggest having a top limit on their retail price rather than a bottom one? Or no restrictions at all?

[QUOTE=klink2]
The only way to make money selling at wholesale prices is by selling larger quantities. I have a minimum $ and a minimum quantity for each item.
[/QUOTE=klink2]

Well, if I did this, it would change my whole business plan. I do mostly limited edition or one of a kind items and if I had a minimum order then they could essentially wipe out my stock with one purchase. If I did a lot of wholesale, this would be the way to go, indeed, but I am pretty sure this is the only way I can do wholesale right now - outright purchases of limited stock. I just wanted to offer wholesale as an option for now. I just don't want to (or am not ready to) become mostly wholesale right now.

[QUOTE=klink2]
{...}you might want to eventually consider taking credit cards. This is how over half of my wholesale customers pay.[/QUOTE=klink2]

I am not ready for the setup fees, and frankly this scares me. What does this cost, and how do you do this? I take credit cards through Paypal right now - most people seem to have this access, especially if they are buying from an online only store.

[QUOTE=klink2]
Let's say someone places an order and they want 2 each of 7 different skirts. How long will it take you to complete?
[/QUOTE=klink2]

Yeah - just not doing it like that. I guess because I mostly am trying to avoid the assembly-line thing, producing mass quantities of the same thing.

[QUOTE=klink2]
Also, I'd leave out the stuff about damage. Everyone has a story to tell about shipping nightmares. You might offer insurance as an option when you ship.
[/QUOTE=klink2]

I believe I would have to switch to UPS for insurance. I know the USPS offers it, but I hear it is impossible to make a claim.

[QUOTE=klink2]
Yikes! This is a whole new season! What if someone returns 5 summer dresses in October. What will you do with them?
[/QUOTE=klink2]

Well, I was being generous here. I guess I don't mind getting some of my stuff back, even if it is out of season, because a lot of people do buy my stuff out of season. I will rethink this for wholesaling.

Quote:
Originally Posted by klink2
I think it is standard to have a restocking fee that is a % of the total order. [/QUOTE=klink2]

As I mentioned in a previous post, you might want to consider a trade-back program instead of an exchange or return policy. Otherwise, you might as well be consigning everything.
Good point. A lot of good points! Thanks!
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#20 of 25 Old 12-08-2005, 05:37 PM - Thread Starter
 
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Everything you say does make a lot more sense when viewed as limited-edition hand-crafted items.
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#21 of 25 Old 12-08-2005, 05:49 PM
 
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Sorry
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#22 of 25 Old 12-11-2005, 12:19 AM
 
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Just updated my wholesale contract and used a little of your info. Is that okay with you? Thanks,
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#23 of 25 Old 12-11-2005, 03:48 PM
 
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Just updated my wholesale contract and used a little of your info. Is that okay with you? Thanks,
You mean the stuff I just wrote up? I don't mind airing my stuff here in the hopes that it will help others, and also in the hopes that others will do the same. This forum has been an excellent source of help for me in finding my way through developing my business. I am sure plenty of others feel the same way.
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#24 of 25 Old 12-12-2005, 12:28 AM
 
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this is kind of a OT but your prices deserve to be raised, Amy! Your stuff is so cute and could sit alongside any of the much more expensive clothing I see in the boutiques in Chicago. If you raise your prices, you are not going to get the same customer you are getting now probably, but with some advertising, pr, and marketing, I think you'll find your niche. And you'll enable yourself to wholesale which will help you grow.
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#25 of 25 Old 12-12-2005, 01:12 AM
 
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I have been working on my contract, too, with the help of this thread. I am planning on saying no returns unless merchandise is defective. I urge them to order swatches is they are unsure of fabrics and I plan on sending samples of new products and/or showing them in person when possible to make sure as much as I can that they have seen and felt what they are ordering so they can know for sure they want it. So, in this case, I wouldn't have a restocking fee, right? If they can't return anything unless it's broken?
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