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Pres

Retail offer, need a contract?

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Hi folks, 

I thought I would ask, as I have not ever done anything quite like what has happened lately. Through a family member, contact was made with a retailer looking for hand made ware to sell in their store. They are presently asking for honey jars and mugs. their terms seem to be generous:

50 Assorted Honeypots @ $18.00  each (we would retail them in the stores at $36.00)

50 Assorted Mugs @ $12.00 each (we would retail them in the stores at $22.00)

The lead time for this delivery is April, which I believe I can meet with a little hustling and some warm days. 

Do I need to have a signed contract with these, or is the email enough?

best,

Pres

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My 2 cents is e-mail is fine-this is a small order in the big picture really. I would e-mail them back and start throwing. The mugs will go away no matter what -the honey pots well thats a lot of them.

In my wholesale connections of late I have had face to face meeting's  but no signed contracts. I emailed them after the meetings and its all been smooth(this is with a few stores).

If the order was 500 pieces I would think about the contract more but 100? seem small enough not to worry. Also good will goes a long ways on both parties. After all it a two way street.

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Have you worked with them before? If so, then email is fine. If not, then definitely sign a contract for the first order. The family connection makes it even more important to have a signed contract. 

The prices and turnaround time look fair to me. I would get the payment terms in writing. For a first order, I always asked for payment upon delivery. If this first transaction goes smoothly, and you don’t sense anything hinky, then you can extend Net 30 credit to them after that. This is totally normal in the world of selling handmade craft. 

I think it can be handled casually, like “would you mind signing a boilerplate contract?”

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Maybe I miss stated a bit. The retailer is a manufacturer/retailer for honey, they have stores in the east coast. the family member has worked for them for several years, and was a contact to their buyer. I sent sample pieces to them, and their response was very enthusiastic.

 

best,

Pres

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45 minutes ago, oldlady said:

my bank does not accept enthusiasm when i try to deposit it.    business is a business so do it that way.

Bingo. I would only do it without a deposit if you'll be able to sell those pots elsewhere, and in a reasonable time frame.

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 (For a first order, I always asked for payment upon delivery)

This is pretty standard  as Gep said.

Just e-mail them this fact in terms of their 1st order with you.

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If you are shipping the order I would also add to your email how you want that paid for. I add shipping cost onto the invoice but I don't charge for packing materials or my time to pack it all up. I find it less stressful getting this all nailed down at the beginning rather than messing around with it after the order is delivered. If they didn't pay shipping on the samples they might be under the same assumption for the order.

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Looks like  I will have to pick up the game a bit, get some clarifications of the shipping and payment ready on delivery. Thanks for the help folks.

 

best,

Pres

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I think 100 pieces is an excellent order, especially if you're just getting into retail situations like this, or if its not something you usually do. For $1500 for an order of reasonably straightforward pots, I'd go for it!

I agree with everyone about the 50% deposit on the first order,  payment on delivery, and the retailer pays shipping parts. Professionalism at all times protects both your client and you from any misunderstandings.

The only thing I'd like to add is in regards to offering credit terms, or Net 30.  Years ago I used to work at a giftware and candle wholesaler (don't ask).  The company policy there was to ask for 3 credit references (that had to check out) before granting net 30 terms, and the first order was always paid for after it was packed up and before it shipped.  These references should be someone in charge of the accounts receivable at your new client's suppliers. To follow up, simply send a short email to these good folks introducing yourself and asking if they 1) do, in fact, sell to your new client, and 2) if their account is in good standing with them. They can't really give you more information than that. If the references all have accounts in good standing, then go ahead and offer net 30. Net 30 should be revoked if the client abuses it, but that might be a topic for another thread.

Don't feel squeamish about doing something like this:  it's part of the usual communications that pass through businesses that resell things. No one even bats an eye when you ask for the references, and any gift reseller should have a short list to hand. 

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First time buyers pay 50% down, remainder COD. Orders over $2k are 50% down always, remainder COD or NET 30. This serves as a unspoken contract; no payment, no product. The uncommitted will back out when they see that.

For an order with a retailer (that isnt a craft/art gallery), especially a very big one(thinking thousands of units) I might consider putting together a contract regarding liability; as in, the retailer has taken over ownership of the product and when it left my hands was in perfect working order. If a customer of their's were to come back claiming a suit then its no longer your issue. Contracts mean little without attorneys to write them, and a notary to sign them. Still could be broken in a court case, but better than nothing. Insurance only goes so far, and Im maybe a little paranoid, but worry about the what-ifs.

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