I have been in similiar situations before… The first was with Nordstrom and they wanted a discount, I had to pay my sales rep her commission, everything would have to be rushed which would require me to pay a premium on the raw goods, I had to pay for all the labels/hangtags, have special hangers made…and that was just the beginning! I went ahead and did the order because, well…it was Nordstrom and I was convinced that they would be a good fit for me. I was wrong! All it did was create havoc on my cash flow and prevent me from sleeping for 6 weeks straight. In hindsight, I should have turned down the order or tried to negotiate better terms. I think that experience helped me have the courage to tell this one No. My first experince was a valuable lesson-and I don’t plan on repeating it anytime soon!

I wish you the best of luck with your decision…I know it’s a hard one!

All the Best,

Heather

Sure thing! Just email me and let me know when…talk soon!

Heather

it’s time for a podcast! let’s do one about this experience and what’s happening in your business more broadly! You in?

Rich

I hear ya! Over the past couple of years, I’ve worked with a couple of large buyers including Nordstrom’s, Barney’s, and a large national casino retail group. I think that experience helped prime me for all the little “gotchas”. I’ve learned to read the fine print! Also, I been pleasantly surprised to find a lot of their “policies” can be negotiated. The order process takes a little longer, but it’s worth the effort. As far as the payment for this one went, they used a third party to deposit the money into my account established at the third party. The only problem with that was the $695 set-up fee to get established with the other company.

Re: Factoring…Factoring is definitely tricky and I’m finding that your experience (good or bad) really depends on who you work with. To a certain extent it’s a necessary evil if you don’t have the money on hand to front a full production run.

Thanks for the tips and I’m familiar with your blog and book-they’ve been a big help over the years!

Vendor compliance is a whole other animal and frankly, in most cases if big box retailers are interested in carrying your line, it’s time to sell your brand and start another. I’m just being honest. Either that or it’s to ratchet things up and move up to a whole other level; can the line draw it?

What you didn’t discuss with the buyer altho you probably thought you did, was payment terms. I don’t care what they said, they’re not going to pay for 6-9 months and that’s assuming you haven’t been assessed any chargebacks and in fact, owe them money rather than vice versa. The person who approached you cannot make binding agreements with you in this matter. Or about anything really. Big box buyers are really more like agents who put interested parties together but it’s up to the two to negotiate the deal. And there won’t be much negotiating either unless your line is really hot and they MUST have it. You think I’m kidding? And also they want to return any of your product that hasn’t sold at the end of the selling season and charge you for processing and shipping it, -or even for destroying it- meaning you’re paying them to take your products on consignment and just hope you get paid. There are very many reasons why independent designers don’t sell to department stores.

To handle this kind of customer, you need to be factored which in the apparel industry means 20% of your invoices -period. That means you’ll have to produce offshore to make your margins. What’s worse, factors contract with you to buy ALL of your receivables meaning they get your steady 30-day pays and your house COD/PAD customers that you don’t need factored. That’s how the factor makes money. It’s crazy.

Maybe I know too much but there isn’t enough money to convince me to take on this kind of client -altho, it would be really good for you to adopt some standardized compliance measures they require that are “standard” (yeah, whatever *that* means) in the industry. Really, it’s a matter of adopting standard or best practices typical of quality firms. If any of this interests you, there’s a lot more on my blog.