Interest from a major chain - erhm, what next?

[Pish_Pash]

Well after a couple of 'fails' (some to embarrasing to reflect on!), it looks like my dogged persistence may have paid off.....I've managed to get a major chain seriously interested in one of the products that I have UKI exclusivity on, but they want me to supply them with £10,000 of product initially on a 'sale or return' basis (I only carry about £1,500 of this particular line, so I'm going to have to show some skin here!)....this proposed £10k of product is a modest amount, because by my calculations, they could end up ordering £300k of product per annum. There's little risk in this for me...the product is a blockbuster (but yet to break in the UK)....if they don't sell them (unlikely), then I'll certainly be able to sell the product to others.

But what's the normal arrangement on 'sale or return'...ok, I get the bit if the products don't sell, they send them back to me ...but what would be the normal terms/conditions for a 'sale or return' deal?

For example, when should both parties deem the product to be a successful seller (i.e. the 'sale' part of the 'sale or return' phrase!). I'd not want to wait until they sell their last unit to get my dosh!

And another thing...assuming I agree to this sale or return...what next? In other words, what would be normal from a 'process' & 'formal conditions perspective? I'm assuming these things don't work on a handshake - I need some form of written word...what would be the next stage? At the minute, it goes like this...

"erhm, I will give you £10k of stock & if you don't sell 'em, you hand them back, Signed Me."

It needs a bit of work.

Sorry to sound so wet behind the ears, I'm used to selling into mom & pop type small retailers...but this deal could be huge so I don't want to come across as a complete bozo at the 'closing' stage.

 

[Bob]

Ask your accountant for advice?

 

[Pish_Pash]

Ask your accountant for advice?

Haha ...I seek someone who knows wheeling & dealing in the real world ...not someone who thinks a C79 certificate is a darned good read!

And hold on, if accountants are so good at giving advice such as this...why are they Accountants & not Dealmakers?

Anyway, where was I....

 

[Bob]

Haha ...I seek someone who knows wheeling & dealing in the real world ...not someone behind a calculator!

Try PPH. They're sure to have someone there
Having said that for other people reading the thread. A competent accountant retained by your business should always be one of the first ports of call as they will have knowledge of your business and will be frequently know people who have been through the same growth pattern.

 

[Pish_Pash]

But would they know about sale or return to a major retailer?

And & are you suggesting that because I hold the opinion that a very small/simple business doesn't always need the services of a full time accountant all year, that questions relating to business shouldn't be thrown into the mix on a business forum to get a consensus?

In my opinion, this isn't an accountant type question ...this is for someone who has 'walked the walk' in this area themselves.

 

[Bob]

I won't steal your thread, but the experience that many accountants have, was earned on the back of their clients. I can't comment currently as I have been retired too long but we certainly had clients in this position including for instance 1 who imported from Italy and sold to Asda. This was a startup which grew to a multi million pound business. Do you belong to any member groups such as a Chamber of Commerce? Do they offer any advice ?

 

[The Byre]

That's the trouble with large sheds, everything is sale-or-return and they will expect YOU to pay them a fee for the return, as well as you having to pick the stuff up by courier.

£10k is a VERY small order for a large retailer, but if you are convinced that this will fly, insist on a payment schedule and none of that 90-day nonsense.

I always advise people to stay away from big sheds (unless they are one of the ones that pay promptly and don't mess you around) until you are large enough to sleep with an elephant!

But if you can afford to blow 10k, its worth a punt!

 

[BusinessPlexus]

Well after a couple of 'fails' (some to embarrasing to reflect on!), it looks like my dogged persistence may have paid off.....I've managed to get a major chain seriously interested in one of the products that I have UKI exclusivity on, but they want me to supply them with £10,000 of product initially on a 'sale or return' basis (I only carry about £1,500 of this particular line, so I'm going to have to show some skin here!)....this proposed £10k of product is a modest amount, because by my calculations, they could end up ordering £300k of product per annum. There's little risk in this for me...the product is a blockbuster (but yet to break in the UK)....if they don't sell them (unlikely), then I'll certainly be able to sell the product to others.

But what's the normal arrangement on 'sale or return'...ok, I get the bit if the products don't sell, they send them back to me ...but what would be the normal terms/conditions for a 'sale or return' deal?

For example, when should both parties deem the product to be a successful seller (i.e. the 'sale' part of the 'sale or return' phrase!). I'd not want to wait until they sell their last unit to get my dosh!

And another thing...assuming I agree to this sale or return...what next? In other words, what would be normal from a 'process' & 'formal conditions perspective? I'm assuming these things don't work on a handshake - I need some form of written word...what would be the next stage? At the minute, it goes like this...

"erhm, I will give you £10k of stock & if you don't sell 'em, you hand them back, Signed Me."

It needs a bit of work.

Sorry to sound so wet behind the ears, I'm used to selling into mom & pop type small retailers...but this deal could be huge so I don't want to come across as a complete bozo at the 'closing' stage.

Pish Pash! Well done! I know how daunting new prospects may be especially after a few early fails but you've done a good job getting this far. As a new business man on the scene dont be suprised with a 'sales or return' contract as usually this would be the case with a product that has no independent marketing... Its just a way that these retailers make a profit. If your confident about this product and you know it has strength behind the brand then do not hesitate in signing on this basis.

Write a letter along the lines of;

' Dear Sir/Madam,

I want to thank you for your interest in my product. I firmly believe this could be the beginning of a wonderful and profitable relationship between us.

I am able to provide xxxx units at a unit price of (xxxx or if not decided then open to negotiation- think about your margins but dont get too greedy as it is the step up that is the most valuable and not the bank balance at this point). Alternatively if you seek more or less then please do not hesitate to contact me with your full specification and timeframes. '

This is just some of it, ideally you do need to speak to a legal expert who you will require to overlook your legal paperwork because these big suppliers/retailers are like shark in the water who know the market better than you and know the legalities better than you... they will want to cover there own back at all times. So many times are retailers bringing new lines on to the shelves and then facing product withdrawals few months later due to a group of XXXX who have spotted a minor issue, this is just one of the issues.


I know its not much mate but hope it helps.

 

[BusinessPlexus]

Get a deposit as a gesture of commitment from the retailer. 10% 15% percent of the overall order value followed by period installments based on contractual terms

 

[Pish_Pash]

Thanks for the virtual hi-fives/support guys.

This is the 3rd large outlet I've negotiated with

The 1st outlet that I went into negotiations with (one of the biggest in the country), loved the product but wanted to buy for less than my supplier can make them! (too used to Chinese 'pricing' me thinks)...I couldn't make the numbers work....I was gutted. That said it was a great learning experience, such was my eagerness to get their business, that had the deal proceeded I was literally going to make zilch for a LOT of effort (but I see a lot of repeat rtrade, so I was expecting their buyers to like the brand & then seek out more ...all paths then lead back to me & that's when I'd make my money - sort of using the large supplier as a gateway)....only after the mist of 'success at any price' faded, did I realise I've got to be way harder on pricing. In my opinion, what this first outlet did was akin to the record label Decca turning down the Beatles! ("Nah, they've no future"!!) ...I look forward to the day when the first outlet buyer realises they screwed up!

The second company we dealt with was even worse ...from the outset they made it clear they work on stupid-o-clock pricing...those negotiations didn't last long!

this third outlet seems cool with the price....but very risk averse.

My £10k outlay is of no major worry...I'm already moving this product fairly well (& I'm small time) ...so in the very unlikely event they don't sell with this third outlet, then I know I'll not be left with a load of product on my hands forever (Can I interest anyone in a 'Free Nelson Mandela' T-Shirt?)

What I don't want though is to have the proverbial taken...hence pondering how I set the criteria so that when they are 'selling' (vs. 'returning' lol), that I get paid asap.

I doubt I can push it to getting a deposit from them ....indeed I'm reluctant to now ask in case the deal goes cold (defeat snatched from the jaws of success yadda yadda), there's little downside for either party here, so I will almost certainly roll with it...

 

[Breaking Good]

Haha ...I seek someone who knows wheeling & dealing in the real world ...not someone who thinks a C79 certificate is a darned good read!

And hold on, if accountants are so good at giving advice such as this...why are they Accountants & not Dealmakers?

Anyway, where was I....

The only part of your story that shows you're wet behind the ears is this post! Before starting my business, I trained at a big 4 accounting firm where my clients included several FTSE 100 companies and gave me access to some of the most successful businessmen in the world. Why are they accountants and not deal makers? Because many of them make more money than you'd think! Not all accountants will help you (some aren't great at all) but a good accountant can do wonders if you build the right relationship.

Regarding your issue - it's clear this is a deal you can't really turn down. You should ask them to declare their terms of the "sale or return" arrangement and then you can decide what to do next. There's no point speculating until you obtain the terms and conditions they are offering

 

[Pish_Pash]

The only part of your story that shows you're wet behind the ears is this post! Before starting my business, I trained at a big 4 accounting firm where my clients included several FTSE 100 companies and gave me access to some of the most successful businessmen in the world. Why are they accountants and not deal makers? Because many of them make more money than you'd think! Not all accountants will help you (some aren't great at all) but a good accountant can do wonders if you build the right relationship.

perhaps you've missed the ongoing saga..... a lot of the posts on this forum are same old same old "every limited company needs an accountant" ...I disagree with this. Perhaps I should clarify, I don't need an accountant to hand hold me all year, I do need an accountant when it comes to the obtuse submission requirements of HMRC & companies house (therefore I hire one for that particular task). I've got by without a 'hired' accountant for two years now, i've not made any HUGE howlers, HMRC haven't raided my premises & shut me down....if you can read, then the info is out there (e.g. most efficient way to extract dosh out of your company as a director etc etc). Like I've said mine is the simplest of business models (I buy stuff, then sell it for more than I paid - job done), I'm not running Apple Inc. I've been quoted £1500 to 'be my accountant' (from what I can gather such quotes are based on the fact that I have a limited company turning over £150k+ ....believe me, when I know how simple my accounts are, I'll find another path!)

Some accountants have taken umbrage to my stance (can't say I blame them, I wouldn't like to read that my services aren't needed all year by some!),which has now spilled over to completely unrelated threads such as this. Sure there'll be many an accountant that could add input/value in this situation (but then again a lot who couldn't - that's life) ...but so can a forum of like minded people. In short, I do not need an accountant to address the issue posted here.

A forum is collective...if I can help others I will (check out my numerous other posts, helping others, adding input)...the notion that just because I've said "I don't need a formal full time accountant who I can call any time" disallows me from asking other questions on a general business forum without jibes being the result, shows how much the truth hurts to some.

 

[Faevilangel]

I don't need an accountant to hand hold me all year

Maybe you do as this thread shows, I pay my accountant to do my tax returns and that's it but he is there when I need advice e.g. setting up a new business.

An accountant will have a wealth of knowledge due their large number of clients, you will probably find your accountant has or had a client which went through the same process you are so can offer advice based on that, they will then be able to put you in touch with people (if you need) such as a lawyer or a trade expert so you get watertight contracts sorted.

You don't need one all year round but you do need one you can call on for help with stuff like this, will probably cost you a few hours of their time but you will get the best advice for your business. Anyone giving advice on the forums is only guessing as they don't know your business, your product or the buyer.

The old saying, an accountant isn't just for tax reasons.

 

[Breaking Good]

perhaps you've missed the ongoing saga..... a lot of the posts on this forum are same old same old "every limited company needs an accountant" ...I disagree with this. Perhaps I should clarify, I don't need an accountant to hand hold me all year, I do need an accountant when it comes to the obtuse submission requirements of HMRC & companies house (therefore I hire one for that particular task). I've got by without a 'hired' accountant for two years now, i've not made any HUGE howlers, HMRC haven't raided my premises & shut me down....if you can read, then the info is out there (e.g. most efficient way to extract dosh out of your company as a director etc etc). Like I've said mine is the simplest of business models (I buy stuff, then sell it for more than I paid - job done), I'm not running Apple Inc. I've been quoted £1500 to 'be my accountant' (from what I can gather such quotes are based on the fact that I have a limited company turning over £150k+ ....believe me, when I know how simple my accounts are, I'll find another path!)

Some accountants have taken umbrage to my stance (can't say I blame them, I wouldn't like to read that my services aren't needed all year by some!),which has now spilled over to completely unrelated threads such as this. Sure there'll be many an accountant that could add input/value in this situation (but then again a lot who couldn't - that's life) ...but so can a forum of like minded people. In short, I do not need an accountant to address the issue posted here.

A forum is collective...if I can help others I will (check out my numerous other posts, helping others, adding input)...the notion that just because I've said "I don't need a formal full time accountant who I can call any time" disallows me from asking other questions on a general business forum without jibes being the result, shows how much the truth hurts to some.

I actually do agree with you in some parts. I agree not everyone needs an accountant. There are some accountants who do charge a lot of money for things you could do yourself. For e.g, my brother doesn't have an accountant (and I don't help him because I've never worked in tax and never had an accountancy business). However I remember he got charged a ridiculous amount of money for his accountant to do his annual return and I was livid. It only takes 2mins to do and costs considerably less doing it yourself!

My point was that accounting is like anything else - you need to find the right one. There's plenty of accountants who have previously worked as FD's at massive companies and would offer excellent advice on things like this. (I'm not recommending you go out and get an accountant of course) If you're filing your accounts etc and HMRC are happy then you don't need one. But I'm just making the point that I wouldn't dismiss the expertise some accountants could bring to the table. Afterall 84% of FTSE 100 companies have an ACA on their board and 58% of them have one as their chairman, CEO or CFO.

I also agree you should be able to ask these questions on a forum without being bombarded but my response was just in response to your comments.

Regarding the topic, I'm assuming they will send you a letter with their terms and ask you to sign it before an order is placed. No harm in proposing changes, such as earlier payment terms etc. If they're a big retailer, they probably won't be flexible but just ask them. If you don't ask, you don't get and all that! Good luck

 

[Pish_Pash]

Maybe you do as this thread shows

Sigh. [looks for nearest wall to bang head against]

No, this thread simply shows I seek others' input on this one particular business topic (you know, like how forums operate?) ...it doesn't mean it's a bombshell moment "Damn, if only I had an accountant who I could call"

if you are saying that no business related questions should be posed (as all roads lead back to accountants), then the forum may as well close its doors!

 

[The Byre]

You should ask them to declare their terms of the "sale or return" arrangement and then you can decide what to do next.

This!

Never mind who does and does not need an accountant! That's a silly and circular argument!

At this stage, it is important that you get clarity over what they mean exactly with sale-or-return. Return at whose costs? And just what are those costs? And who decides if goods have sold or not? And just when (if ever) are you going to pay us?

Many of these multiple sheds just take your goods and say thank you. If they don't sell, they charge you for them not selling AND they send them back at your cost. If they do sell, they will either tell you that they had to discount them, so they will pay you little or nothing, or they pay you after you have badgered them for months and months.

I always tell people to approach Aldi and Lidl first. They pay on time, they take what they have ordered and if it doesn't sell, that's their hard luck - they don't come back at you demanding money. But they are sticklers for quality and push hard on price.

 

[Raw Rob]

What a strange place this forum is sometimes. Even if Pish_Pash had an accountant, what are the chances that they would be able to answer this question? Sure, some would, but also a lot wouldn't. You only have to read the accounts forum on here to see that a lot of "accountants" can't even get the basics right.

 

[Faevilangel]

Sigh. [looks for nearest wall to bang head against]

No, this thread simply shows I seek others' input on this one particular business topic (you know, like how forums operate?) ...it doesn't mean it's a bombshell moment "Damn, if only I had an accountant who I could call"

if you are saying that no business related questions should be posed (as all roads lead back to accountants), then the forum may as well close its doors!

That's not what I said at all, read my last paragraph, the accountant will know your business so can offer the best advice, someone on the forum can say do x or y, but your accountant knows your figures so will be able to say if x or y is the best route.

Asking advice on the forums is fine but sometimes it's better to get that advice from someone know knows a little more about you and your business.

There are too many variables in regards to this e.g.

- what if they return all the stock, could you store £10k of stock
- what happens if the stock is faulty, what would you do to fix it
- can you afford (business wise) to give £10k of stock away

I am a huge advocate of forums but sometimes it's much easier to get the advice closer to home.

 

[MOIC]

1. As Breaking Good has suggested, get their terms and conditions first and use that as a base to start negotiating. Given you have the exclusive rights to this product, you (should) be holding all the aces as long as the supplier sees good sales within their stores.

2 It is wise to get a professional on board at this stage (one that understands your business, specific deal with this potential customer, as well as the best way to proceed as, if, as you say they can buy £300,000 worth of this product, which is not a huge amount over a one year period)

3. Any large retailer will need to ensure the following criteria before signing a contract with you:

a. You can supply the product (and all future orders)
b. You have the licencing rights
c. You do not supply their competitors (somewhere along the line)
d. They can squeeze the best price (allowing you to make a small profit)

The "Sale or Return" is a red herring and just there to give them protection, but as you are so confident in your product as well as the 10k outlay, this will not be a problem for you to agree to their (reasonable) demands.

You should take on board that they will try any trick in the book to get to your supplier or to have a copy made, if there are no patents covering the product.

As some posters have pointed out, having a major retailer as a customer does not guarantee success, in fact, can be the exact opposite, as from a financial point of view you may need to put all your eggs in one basket (finances to support their orders) and they can pull the plug at any time for whatever reason.

However, being positive, as well as the faith you have in your product, it's best to agree terms that is fair to both sides and ticks ALL the boxes on your side, that can safeguard your interests and in this regard you must have professional advice (a solicitor is better than an accountant...................rephrase................a competent solicitor in this field)

Best of luck.

 

[Pish_Pash]

Thanks MOIC ...whilst I think once they've trialled this product on 'sale or return', I can see them easily moving 100,000 units per annum (based on their number of nationwide branches and just 3-4 sales per week of the product I supply them with).

From that amount of volume, I'd see approximately £100k profit (which, may not be life changing, but it will certainly help keep my kids in Nike Trainers!), more importantly, past customers love what they've bought to the point of evangelizing about it to others ...I have a lot of repeat customers who bought product A, but then came back & bought Product B & C etc.

therefore this isn't so much a 'make lots of money' from the nationwide retailer directly, but more an indirect way of moving a lot of related product in the same brand (in effect in much the same way that they say marijuana is a 'gateway drug' leading onto other stuff, I'd be using this big retailer as a pseudo-street corner pusher of my wares!)

 

[MOIC]

If the orders get large, can you supply them?

How easily can the product be copied, or a variation of the product?

Can they get to your supplier? (big fish have power)

3 big questions. . . .that need watertight answers.

 

[Pish_Pash]

If the orders get large, can you supply them?

How easily can the product be copied, or a variation of the product?

Can they get to your supplier? (big fish have power)

3 big questions. . . .that need watertight answers.

Yes...I can supply them in large volume (I've worked with my supplier for over two years, they are solid - we are in touch every day...I'm hip to their groove (as they are to mine) ...I know they're extremely well stocked for this product....and I have the capital.

The product is patented....of course that means jack if a Chinese company really wants to have a pop...cos then it's a fight to death in the legal system, but having a patent gets rid of a high number of speculative forfeiters.

Yes, any end retailer can certainly get to my supplier....but each time anyone has tried, he bats them straight back my way (forwarding their email to me!). I think they view me as an integral partner (vs. someone who buys stuff from them from afar)...I add value for them, they aren't big enough to have an office in every country, I represented them when nobody else did ...and have grown sales in the UK from zilch to a point where I now matter. (hope that doesn't come across the wrong way)

I know this might sound naive (believe me I'm the least naive person you could meet ... 'cycnic' is my middle name!), but this supplier has stood behind me from my first £100 order with them(!)...they've watched me grow quick, if they lost me...it'd impact them financially (& from an overseas help perspective - I bat their corner in Europe) ...I estimate my orders make up about 6-8% of their annual turnover ....it wouldn't take their legs out, but there'd be a hole (I import about 130 products from them...this one that's of interest to the major retailer is just one product ...they'd not want to lose the business I also generate from them in the other 129 products)

 

[sirearl]

.

The old saying, an accountant isn't just for tax reasons.

To true.

Various types of cooking,tax avoidance/evasion e.t.c.

Not surprised 58% of top companies have accountants in control.

 

[BusinessPlexus]

Oh the wonders of Accountants... I cant speak for all Accountants but what i can tell you is the one i have is a legend and without him the bank balance would be crying.

 

[Talay]

The one thing which stands out from this thread is that the OP needs to bring in someone who knows what they are doing and fast.

You only get one chance to make a first impression and only one chance to make the first deal.

I have seen sale or return seem ideal and turn into a nightmare what with missing but not sold stock, damages, all manner of issues which meant losses for the supplier and no means of opening up the larger market they thought they were competing for.

 

[Pish_Pash]

The one thing which stands out from this thread is that the OP needs to bring in someone who knows what they are doing and fast.

??

So which part of getting 1 out of the 3 major nationwide retailers that I've negotiated with in the past couple of months, to this near closing stage am i not getting right? (a lot of folks haven't even managed to get one major retailer to talk or acknowledge them ....like I say, I've been in negotiations with 3, so please, a bit less of the "bring in someone who knows what they're doing", I asked for input ...it doesn't mean it's 'open season' to patronise)

I'm less worried about the logistics/losses (delivery costs there & back, stock missing when handed back ...this is all small beer in the great scheme of things...we're talking £10k, I'll get something back, so it's not a life changing loss), & more interested in the typical 'terms' of such an agreement. in the absence of getting such detail, I'll move on regardless ...I asked because often there's good input to be had by posing the question, but if not, I'll be ok....

 

[MOIC]

I find it strange when an OP criticises posts that have bothered to reply. It is often the case that readers view the thread from different angles and this should contribute to the overall thread, whether the OP agrees with the views or not.

Having said that I can understand some frustration if the OP feels that some posts are going off in a different tangent.

It's probably best for the OP to take any positives from posts and ignore the ones that are not relevant.

Moving on, this is a step up for the OP's normal customers and the fact there have been 2 "unsuccessful" attempts to secure orders from previous national chains should point to a different approach and in this regard must have professional guidance in dealing with these types of companies.

It is a completely different ball game to supplying individual retailers which the OP is currently doing.

The contract needs to be watertight and must include all aspects of supplying, costs, discounts, refunds, returns, deliveries, payment terms, liability, packaging, loss of profits, IP protection, competitors, retail price guarantees, as well as other legal aspects.

This is NOT something to be done by an individual without experience in contract negotiations or consequences of being in breach of any aspect of the contract.

The OP is taking a potentially huge step up and must look at the management, including contracts to ensure this is professional and is on the same level as his negotiations with the large retailer.

I have seen many "small" suppliers being tied up in knots for not having a contract professionally negotiated and agreed to fully protect them as well as being able to supply these groups.

In short, they are sharks and will do anything in the book to ensure they have the best deal for them that protects them and only them.

This post should not be viewed as negative, it should be viewed that getting into bed with big retailers is never the holy grail it is thought to be.

The OP must have a watertight contract with the supplier, as this is something that the retailer will need to have information on to ensure compliance.

Whilst I understand the OP's personal relationship with the supplier, this can often change when a large multi national group comes knocking on the door.

It might be better to let the business deal go forward with the supplier and receive a commission on sales, again with a watertight contract. This will leave the legalities, problems and liabilities with the customer and supplier only.

Contracts are often 50 to 100 pages long and detail all aspects of the process.

Step 1, get professional advice (An accountant is not your best option. A person experienced in dealing with these groups, hopefully one that is already dealing with this specific group is your best way forward. Often there are political issues within a contract that need to be understood and overcome.

Good luck.

 

[Banksbroo]

Professional input - how about contract lawyer, you know, the kind of firm who wrote your customers contract? I can't see a large retailer accepting your contract, but you could have a lawyer check over their contract and make amendments so you are not left high and dry because of an apparent minor clause.

I recently turned down a large order because of a tiny clause that the buyer could return the goods at any time and for any reason and supplier (me!) was responsible for buyer sourcing and paying for goods from elsewhere! I seem to recall this stunner was on page 2 or 3 set in dense 7pt type.

There are definate benefits to swimming with sharks, but they are still sharks!

 

[Paul Kelly ICHYB]

As someone who has been a major retail buyer and supplier to retail, here is my ha'penth!

• SoR is not an unusual or unreasonable deal
• They need to send you a purchase order with the terms you agreed shown or specifically referred to
• You need to make sure that you have good T&C's for general trading, but specific clarification on what the S0R deal entails
• You both will agree how long the SoR agreement for that order lasts - ensure that you specify it relates to this product and order only
• Agree that you will be paid on a regular basis, based on sales in a period e.g. they will tell you, by the 5th, previous months sales and you will raise an invoice for the goods
• Agree what happens after 'x' - if you sell x, they will give you a standard listing
  
• Agree replenishment terms - try to get this as a standard deal
• Agree what happens if the R is invoked - who pays for collection, do you accept damaged returns or complete outers etc

there could be more, but this would be based on the specific deal.

Please ensure that you are not personally affected by the investment in stock - this could be the stepping stone to something big - well done.

 

[Pish_Pash]

^^^^

Now that's what I call input ...exactly the concise type of detail I sought - I hearty thanks 'Consultant' , you've restored my faith & belief in information/support sharing via forums!

Thanks to all others who were constructive with their input too...a special mention to 'My Office in China' ...who went above & beyond (& put forward a lot of points ...many that I'd considered previously, but also some that I hadn't & really ought to consider - clearly someone who can 'walk the walk' when it comes to dealmaking... great stuff)

 

[Countrymun]

Hi Pish Pash,
Well done on getting such a major retailer interested! The last response was clearly from someone who knows how it all works and hopefully will be of great help.

My input might not be of use because the scale is totally different but some years ago we owned a shop and had some goods on sale or return because we couldn't afford to hold such a wide range of stock otherwise.
We sold books on behalf of a supplier on SorR basis. He covered the cost of delivering to us - usually brought them himself because books are heavy and courier costs were very high.
He would call or ring us once a month to check on sales and we would then pay him for all units sold during the previous month.
Some books just didn't sell and he was happy to swap out those titles without any extra paperwork but if you have a product without size/colour variations etc then that wouldn't apply.
We had some shoplifting and once when he called to replenish stock we had around 18 units less than we should have had on the shelves. I didn't have a lot of time to check stock so we always went by till sales to tell him the monthly sales total.
He was very good and agreed to allow us to pay for 50% of the missing items and he took the loss on the other 50% - I felt that was pretty good of him because clearly they were in our possession so really it was our problem.
However, he also then added a condition into the paperwork to clarify that in future we were responsible for losses but he still always simply replaced any books that were damaged (kids picking them up with sticky fingers/tearing covers etc).
No doubt the situation will be totally different for a major retailer - good luck - hopefully it will work well for you. Make sure you keep us updated

 

[Pish_Pash]

Thanks for the input CountryMum ...I do sell to small retailers, so I understand his sentiment. As a supplier, you want to get your product 'out there', but for many retailers cashflow is hard to manage, so 'sale or return' does have its place (personally I think big retailers wanting the same is stretching it - they want zero risk, but IMHO part of being a buyer is you've been hired for your skills in assessing what you think will sell & then having the courage of your convictions - I guess that buyer's covering their backsides)

the scale of this proposed deal is up a level, everyone seems to be coming in from the 'things going sour' perspective (which I understand), but on this occasion that's the least of my worries, my main cut & thrust of starting this thread was more 'what's the norm when dealing with a big retailer wrt Sale or return'?' & thankfully 'Consultant' concisely covered the main points.

the sheer potential here is mind boggling...to put this into context, I'm still a bloke running a company whose global HQ is his dining room (billy bookcases - aka my storing system - everywhere!) ......if this goes throught & this nationwide retailer sells just 2 or three units per branch per week, I'll trouser over £100k ...if they sell 10+ per week (which is easily do-able) ...it's beginning to move into the life changing category!

Anyway, mustn't count chickens blah blah...lot of of water to flow under the bridge etc etc.

 

[Pish_Pash]

Ok, so this has dragged on, but I got an update a day or two ago saying "Let's proceed but we now actually want to increase the sale or return quantity almost three times our original estimate" (I always thought their original estimate was low, but their revised upp'ed quantity is starting to move into 'chunky amount of dosh tied up & exposed' zone)

Now, my sensible side shouts "hmm....easy there fella" & is wrestling with with my gut entrepreneurial instinct side (which says - "Pah, are you a man or a mouse - go for it!!!") ...but that's not what this is about.

What this is about is that I now need to be registered on their system as a supplier....their supplied forms have all manner of toe curling questions relating to ISO certification (whilst the overseas manufacturer that I source from are certified, I'm a bloke operating out of his dining room! My warehouses is Billy bookcases rammed with product!)....they want trade references ...but this is my first proper B2B deal (talk about a baptism of fire!)...up until now, I've been mainly B2C .....all my other B2B deals have been for a £1k max....I don't actually have anyone I feel comfortable asking ("Hey, remember me, I sold you £500 worth of widgets a couple of months ago ....will you be my referee?"!!!)

Has anyone else who is small time, managed to get through a similar toe curling exercise of being taken on as a supplier for a BIG operation?

 

[Twinkle Toes]

This is why the sensible people go on Dragon's Den, not for the cash but for the contacts and credibility.

Maybe it's time to find a partner with a track record, experience and contacts. Shouldn't be to difficult if the product is the sure fire hit you say it is.

 

[Pish_Pash]

This is why the sensible people go on Dragon's Den, not for the cash but for the contacts and credibility.

Hey Dick, that's all too say to say after the event! But I'd imagine there aren't too many people touting to large UK operations that either...

a) Have a product worth touting.
b) even get a response!

...also, there aren't too many people actually make it onto the Dragon's den (for every fat bloke from Wigan that you see pitching a new type of deep fat fryer, there are 100s that didn't get to expose their sweat patches on national TV). I take your point though, if I were to go on Dragon's Den, it wouldn't be for their ripoff offers, it would be for 8 minutes of TV exposure.

Ok, so I got through sonic the hedgehog levels I & II (& I'd imagined it probably would end up here, but I'd rather be faced with this problem, than not be faced with this problem.....are you hip to my groove Daddio?) ......alas, I don't have time on my side to go on Dragons Den (because I'm going to have to fess up some time this week) ...this might be a case of defeat snatched from the jaws of success..... stay tuned.

 

[MOIC]

Firstly, well done on getting in with the retailer and them having confidence in your product as well as you as a supplier.

Secondly, don't be put off regarding all their questions, this is standard procedure and most of the details is to ensure your company us sound, are able to supply, have liability and the supply line is compliant.

Thirdly, look at each question individually and answer in a manner that will give them confidence and also what you think they want to hear, ensuring that you commit to their requirements.

Lastly, any questions you feel you need help and advice from, ask either of the following: Bank manager, solicitor, accountant and UKBF.

Offer each question individually.

You will eventually get through it, albeit nervously.

Good luck.

 

[RedOnion]

What this is about is that I now need to be registered on their system as a supplier....their supplied forms have all manner of toe curling questions relating to ISO certification (whilst the overseas manufacturer that I source from are certified, I'm a bloke operating out of his dining room! My warehouses is Billy bookcases rammed with product!).

Well done on how well you have done so far.

Presuming that it's ISO 9001 they are wanting you to have, I have worked with that ISO for nearly five years and have helped other small companies who work from a room in their house to gain ISO 9001 - you don't have to be a large organisation to have an ISO! Happy to help with any ISO 9001 questions you may have (if I can!) either on here or by PM.

 

[Paul Kelly ICHYB]

Well done on getting the positive response.

Whether you jump through their hoops is your call and should be based on the potential returns (of course, baring in mind the risks)

There is now a lot more to look at and this could be more that bouncing around the forum can deliver (you will get good responses, as you have, but you need to act now), as I guess timeingsmight be getting a little more sensitive.

If you want to talk about your options or, if based in London, grab a coffee, let me know - no strings or costs!

 

[Pish_Pash]

I really appreciate the offer, but I hope you'll understand that I much prefer to remain in the style of a string of ASCII characters tucked away on a server in some remote Datacentre! (in other words, I'm particularly keen to maintain privacy).

your last post (i.e. a few weeks ago on this same thread), clearly shows you can 'walk the walk' so to speak, so thanks for the kind offer...

 

[Paul Kelly ICHYB]

Well, the offer there.

Remember, you can get a lot more done quicker, face to face (or voice to voice), but at least here everyone is in the loop and you have been good enough to come back to the community to keep up informed.