Today’s article is a little different in format. I was asked this same question by 4 clients in the last week. So I’m sure you have struggled with this too. I am including a series of emails between a client and myself about how she negotiated with her vendors. Have you had this same conversation with a vendor? Tell me about your experiences at www.facebook.com/retailmavens
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Hi Cathy,
Another thing that I am struggling with inventory-wise….Seems like most of these vendors want payment at the time of shipment and won’t do net 30. What should I do with them? Should I still be expecting net 30 from time of shipping?
Thanks!
Amy
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Amy,
What should you do with them? YELL AT THEM. No, I don’t mean that – and you just have to really push them as hard as you can and sometimes even walk away if your cash flow requires it. Because COD really screws up cash flow.
Do not make that mistake. It must be planned for in your cash flow if you are going to do it.?YES you should still be expecting net 30 from time of shipping.
You’re welcome!
Cathy
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Cathy,
Ok, it’s good for me to know that I should be able to have the same expectation of them as of everyone else :). One thing that I get from them often is, “You can charge it to your credit card and it’s basically net 30.” It really isn’t from my point of view. Do you have any good arguments for that one?
Also, I have this pretty big clothing order for fall here that I’m struggling to pay for. It’s from a vendor that wants payment up front and won’t do any terms. This was an order that was placed last spring. I feel like if I don’t get the clothes in soon, it’s too late in the season. If I cancel the order now, they want 20% of the cost of it anyway to cancel. What should I do? I love the clothing line and would love to be able to carry them in the future, although again, the possibility for terms is very slight. So I don’t know what to do with them. Ugh!
Advise? Thanks so much! Great to have these questions answered.
Amy
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Amy,
About the vendor, I’m concerned that it might be too late for them already?! What kind of vendor are they who is it and what size clothing is it?
Regards to the credit card is the same as the 30 days argument but you have to tell them this specifically, “I don’t finance my business with credit cards. And I find I have much more flexibility with vendors that give me terms because it doesn’t have to fit into the limits on my credit cards. I am able to order more from them.”
The other problem with credit card terms is dealing with shipping mistakes or damages.
About the other question….so then it’s merch that would carry forward in terms of season?
The peak clothing selling season is past though. And at this point most vendors are offering discounts on in season goods.
Have they contacted you?
Are you sure that they have your goods still?
Have you tried speaking with the owner about your situation?
That 20% restocking fee is COMPLETELY negotiable.
Cathy
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Cathy,
Yeah, we’ve talked. I had set up a payment arrangement with them, but I’m still having a really hard time coming up with the funds to prepay. It’s about $10,000, all said and done… I totally over ordered in the spring. Everything was in such flux with the new store at that time, so I really didn’t know what to order :(. I don’t want to burn a bridge, but I really don’t know what to do at this point… It has me totally stressed out!
Also, I have another clothing vendor that is willing to do net 15 for spring then net 30 after. She’s just been burned before and wants to ease into it. Is this acceptable?
Amy
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Amy,
I would ask her to do 50% in 15 days and the rest net 30.
You know that I am always going to stretch you!!!! And her.
In all these cases vendors are just people who have gotten screwed before.
So they develop policies to protect themselves.
That’s why the thing to do is understand the situation and talk to them and see what you can work out.
Let them know that you understand their position and then make them understand yours. ?It would be impossible for you to come up with $10,000 before you get the merchandise. That does not work for you.
So how about if you give them $2000 before and then send them two thousand dollars every week?
You could even send them all checks at once. Tell them that you trust them to deposit them on the date that was on the check. That is a BIG leap of faith for you. But sometimes you have to give in order to get.
Let me know how it goes,
Cathy
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Cathy,
Emails sent! And I actually heard from the one for spring already. She took the deal:). I’m pretty sure the other vendor will say no deal on the sending product without payment. But I just made it clear that it was the best I could do. So we’ll see what they say. They’re about to go to a trade show, so they may just decide to try to sell it as immediates to someone else…
Thanks,
Amy
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You are welcome Amy!
Xo
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Cathy,
The other vendor took the deal too! Yes! Thanks for all your help. Now I just have to make your sales goals…:)
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Yahoo, Amy!
I am proud of you for asking your vendors for help!
It is an honor to be part of your success.
Cathy