Selling: Sale or Return, any tips?

[Future Freak]

I run an online t-shirt design company and I have my own retail outlet on Camden Market, London but I'm now planning to expand by selling my t-shirt designs to small retail outlets in the UK, via SOR.

What sort of major pitfalls I should be looking out for?

I have come up with 2 price structures - 2 times markup on the RRP for SOR and 2.5 times markup on outright buying. So to buy a SOR £15 t-shirt from me they would get it for £7.50 - if they bought it from me (not SOR) they would get it for £6.

I have a sample contract, that a shop gave me that they have with another SOR supplier that I will be modifying to my needs.

The only major problem that I could see is a trust issue - as the first order I give them will be a risk. Is it vital to visit each new outlet to check that they are legit before entering into an SOR contract with them? Or do you think that taking a couple of business references is ok?

Any help from anyone with this sort of experience would be appareciated.

[gary]

I would say the first order should always be pro-forma - they pay upfront for their first order (set a minimum quantity) and then they can go on account.

[Rob Holmes]

I would prefer to dropship for people rather than sell things on a SOR basis. Sale or return is dangerous as you are the one taking all the risk for someone elses business.

It may encourage them to take too much stock. I would certainly offer a guarantee of quality and a refund on poor quality (just check it all as it goes out the door so you know none is poor quality and you'll never have to give a legitimate refund)

Although a high returns handling fee would be a nice way of offering SOR if you believe it is necessary to be attractive in your market place.

Rob

[daveashton]

2 things

SOR is great if you now how many you are going to back. Do this on a small scale to evaluate the numbers involved and for new customers first order is COD.

You also provide 2 pricing structures. This means you are giving options before you have an order rather than value add. The key to sales is making people have no options and hence run test market sales campaign on which one runs best and do not offer both or you most common objection will be "I need to think about it"

Good luck