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Such excitement! But PLEASE HELP!!!
www.JournalJunky.com has exploded!!! When I began to make the earth-friendly journals in August, I never expected the business to boom so fast. I have now landed an account with a small chain of General Stores. The chain includes seven stores in the mid to southwest east region of the U.S.
The buyer asked me to fill out a vendor`s application which asked questions like what is my "required minimum order amount and reorder amount?" I really have no idea on what to set as minimums. I am afraid to set it too high or too low. I was thinking about 30 per store as an opening order and 20 as reorder minimums. Is there some kind of formula to come to this answer or do I just make up a number?
Also the buyer would like me to make custom journals for the company. She stated that her marketing department has to initiate the images, but if they came up with something, could they send the images to me for paper production or would they need to find a producer to supply the paper to me? This is an exciting opportunity, but what are the legal ramifications? That`s my largest concern. (I am thinking that they need to supply me with the paper with their logo on it. This keeps down my costs, or I would have to charge them more...)
The last thing I am wondering about is payment terms. The buyer told me that the terms were up to me. This is how she explained it:
"We typically are asked to set up net/30 day terms by the majority of our vendors. We pay your invoice 30 days after receiving the goods. However, we have also gotten 2%/15 day terms which gives us a 2% discount if we pay in 15 days, etc., etc."
How far can I go with this? "50% off if you pay me tomorrow?"-Good Grief!!
(I use the net/30 day terms with another account (a bookstore) that I have. A third account (a clothing store) paid upfront.)
How do I set up payment terms, and does this sort of agreement need a legal contract to draw up these terms?
I`m asking because you all (StartUpNation Entrepreneurs) have really been a great encouragement to me since I first started. Please share any advice. I appreciate it.
Enjoy your day!
Nicole Annette
Earth-Friendly Paper Fun
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Nicole Annette
Hi Nicole,
Congratulations. Sounds like things are going very well. These type of accounts don`t usually pay up front. The buyer gave you a very good idea of how terms work. I think it might be best if you call someone like, (gosh I`ve just blanked) I think it`s score. You need someone to help you with the whole plan of how to expand your business in the right way. Have you also considered the ramifications if you are the only one making all these journals yourself, and you grow too quickly. Get an experienced advisor or mentor. Good luck with your success!
Janie