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payment terms on your wholesale accounts?


JI

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Hello,

I have very little experience with wholesale. Only a couple of accounts. One account was a spa. They told me they only did net 30 days. I delivered product with bill. After 30 days still no payment. Long story short, it took nearly 60 days and multiple phonecalls/unanswered emails. Oh, and this was a well-established and busy spa in town.

Second account: Accupuncturist ordering 50 or so candles. I asked for (and received) full payment up front, with her order form. I promised delivery (in writing) within two weeks of receiving payment. (Do-able for me because of large batch runs and she ordered limited fragrances).

Third account: Going tomorrow to finalize order for this family-owned garden centre. She has indicated to me that she will be ordering in the range of 400-500. She never asked about account due dates. I am meeting her Wed.

Should I specify 100% payment due upon her sending me order? Or is this unreasonable? 50% now upon submitting order and 50% due at delivery? I just was so mad with my first wholesale account, chasing them down etc. $300 is not a lot to a big company but it is certainly a lot to me. Please advise.

Thanks!

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Guest OldGlory

The way I usually handle new accounts is this:

I limit the size of the orders for the first 4-6 months to very small orders, no more than 4 dozen. They pay at delivery. You could easily ask them to pay up front. For small orders it should not be an issue for them. If it's an issue, consider it a RED FLAG.

After the break in period, if I have had no trouble getting payment, they love the candles, seem intent on growing their orders with me, I will up the amount the can order, again with payment at delivery.

The exception for me is a large, established company. One of my wholesale accounts has 8 stores, and a busy website. They spelled out their terms and it was up to me to agree to do business or not. Their terms are NET 30. There's no chance of me not finding them within 30 days, and I was a long time customer of theirs before I considered selling to them, so I felt secure about doing business with them.

This is your chance to find your feet in your business. Establish your guidelines, make a few mistakes and learn from them. You have to do what feels right for you. If that's requiring money up front, do it. You're the only person in a business deal that's watching out for you.

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I normally break up payments into two if the situation calls for it. First half before I start their order and have them pay the second half before I ship. Too risky to send product without payment to people I've never even met before. Locally may be different, but it's up to you if you want to chase people for money. I'm sure you have better things to do! :)

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Alright, I met with client. They placed a wholesale order for $550. Yeah!! Before I even got a chance to ask for payment, they flipped out a credit card and asked if that was alright! Luckily I had my square!

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