So you've landed your first big retailer meeting and you can already see the dollar signs and the clout that comes with being featured in a store like theirs…
But, working with big retailers isn't always all it's cracked up to be. In today's BIZ BITE episode, we're talking about how you can prepare your mindset for this meeting and the boundaries you'll want to set for yourself and your business.
The other day in the Lounge a member shared that she was having her first buyer meeting with a big online retailer and asked if we had any tips for her or things she should look out for and I thought this would be a great place to share my answer.
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If it were you, and you landed your first meeting with a pretty big retailer you’d probably be really fucking excited at the chance to sell with them, right? You’d instantly start seeing dollar signs and the clout that comes with being featured in a store like that… it might even be your dream come true.
But here’s the thing… working with large retailers isn’t always all it’s cracked up to be… anyone remember when Paper Source claimed bankruptcy last year and screwed over a ton of small businesses?
Now that doesn’t mean you should never do it… it just means you should be prepared. And that while landing a big wholesale account could be a total game changer for your business… you shouldn’t do it at the mercy of your sanity or your bank account.
Before we hop into my answer, let me be clear…
What we’re not talking about in the episode is how to pitch yourself to retailers, what line sheets you need, etc. Listen to episode 51 with Katie Hunt of Proof to Product for that.
What we are talking about today is how you can prepare your mindset for this meeting and the boundaries you’ll want to set for yourself and your business.
The number one tip I can give you is to be willing to walk away if their “terms” aren't favorable for your business. It's really easy to get starry-eyed at the opportunity to be in a big retailer, but not if it means you have to take it in the “you know what”
Honestly… this is a go-to for any type of negotiation, even new floors for your home. In fact, me being willing to walk away from a deal saved me about $5 grand to replace the floors at the new place, just sayin’.
Also, if you're going to manage the wholesale directly vs. sending them through a platform like Faire, expect that they are going to want payment terms from you, somewhere between 30 and 90 days most likely. Depending on the size of their orders please consider getting factor or invoice financing so you do not have to put out all the cash to fulfill their POs because if they don't pay on time (and it’s rare that they do), you'll feel the pinch.
Aside from the PO funding piece, some other things to look out for with big retailers is that often they will expect markdown money, or to be able to return things if they don't sell.
They also might expect location protection, less likely if they're online only and will depend on the business, but something to be aware of. Essentially, they don't want their local competitors to also have access to sell your products.
And, last but certainly not least is there are at least 2 policies you’re going to want to have in place before you sell wholesale.
First is, MAP pricing so they don't undercut you, what is the Minimum Advertised Price they can sell your products for?
Second, are rules around bidding on your brand name in paid advertising, especially if you’ve built up a lot of brand recognition over the years. You don’t want them snagging your organic search traffic or bidding up your own paid search marketing.
And look, I don’t tell you this to scare you or deter you. But I do want you to feel confident and powerful going into these meetings. At the end of the day, you probably need them more than they need you, but that doesn’t mean you can’t stand your ground and do what you need to do to protect yourself.
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Links Mentioned
Resolve Pay: I have not worked with them, please do your own research and due diligence.
