Comments on: Establishing payment terms

By: Selling clothes to stores

Selling clothes to stores — Thu, 11 Feb 2010 19:14:07 +0000

[...] she didn’t like, considering them to be unfair. Likewise, you need to be concerned about establishing payment terms. Too often, DEs make concessions they shouldn’t or don’t need to make. Lastly, anyone [...]

By: chicadecanela

chicadecanela — Tue, 28 Jul 2009 15:26:37 +0000

This has been so enlightening. I´ve discovered your website today and i´m enjoying it so much. It is full of smart advices!

By: suzanna

suzanna — Thu, 19 Feb 2009 05:20:36 +0000

i may be slow…but, i’ve been reading the threads on wholesale pricing and keep coming across offering terms. could you explain to me what terms are? i’m assuming it means allowing retailers to pay after delivery is made versus paying before or on delivery, is that right? do manufacturers ever take full payment before the cut and sew? and if you are new to the biz. is that acceptable.
thanks in advance,
suzanna

By: Sarah M.

Sarah M. — Thu, 06 Sep 2007 22:03:08 +0000

I got burned by one of my first stores. I started on consignment with her, the handbags sold and she paid. Then she ordered more and paid. Then ordered a bunch more right away. Right after they were delivered, the previous check bounced! I was a brand new company, out thousands of dollars. Long story short, I did get paid. It was a huge hassle and it eats away at you. Beware of big orders.

Companies that do bad business like this, go out of business. But then they open up under a new name. Check out the department of state (that store is in) corporate filings, by company name and store owner name. Chances are if they don’t pay their taxes, they won’t pay you either!

By: Honey Matthews

Honey Matthews — Wed, 08 Aug 2007 17:34:30 +0000

Thank you so much for this post! For months now I have been searching for the right information to guide me, as I’m a rookie and about to attempt to get my clothing line into stores this summer.

I totally had the wrong idea on what to do, I was almost positive I should offer a 30, or 60 day NET, but after reading your blog I have changed my mind. I will not offer any terms until I have established a relationship with my retailers.

I have many more in dept questions, hopefully I can search your site for more answers, you would make a great Mentor! Thank you for the guidance, I am totally a fan.

Carolyn
Honey Matthews Designs

By: Christy Fisher

Christy Fisher — Tue, 22 Nov 2005 00:40:35 +0000

Your are a goddess , Miracle, for posting this!! So true..
And the DEs who DO extend terms to people because they are sooooo desperate for sales, make it THAT much harder for those of us who are saying “no” to terms.
I see a LOT of DEs who think they can start out and do a show like MAGIC right off the bat and “get a break” by having some MAJOR pick them up.. and THEN try to “figure out” how to hustle the production and collection end of it..WRONG MOVE!!
Again- THANK YOU..for posting this.

By: MikeC

MikeC — Tue, 22 Nov 2005 00:29:07 +0000

We offered terms once to a retailer we trusted. Of course, she stiffed us.

We’re credit card or COD only now.

By: DL

DL — Mon, 21 Nov 2005 21:45:36 +0000

In my experience, a retailer wants to pay the supplier as quickly as possible, so they can reorder. If the supplier is waiting for weeks for a payment, chances are their merchandise isn’t moving, so the retailer doesn’t intend to reorder anyway -ever. They pay for their fast movers first so they can reorder, then pay the other accounts as they free up the cash to do so.

There’s no law that says you have to offer any kind of terms; you can insist on cash up front. But a retailer will have to be convinced the items will sell, AND have the appropriate amount of cash available when he orders.

I would say that if you can’t offer terms, say so up front, and offer another incentive instead -particularly, a much smaller minimum order. It’s unrealistic to ask a retailer to gamble $500.00 ready cash on an unproven product. But $50.00 is much more palatable and more reasonable. If they won’t gamble $50., either they aren’t impressed with your product, aren’t convinced it will sell, are already overstocked or are simply in a sales slump. Better to try again at another time. Or, maybe you’re simply pitching to the wrong market.