How Can I Protect My Product From Theft or Loss in a Retail Chain?
In this short video training, we will discuss the payment terms typically offered by retail chains. If you have a great consumer product and you’re trying to sell to retailers, it’s important to understand the payment terms involved. Let’s dive into today’s training and explore this topic further.
Understanding Payment Terms
Recently, I had a client who asked me about payment terms during one of our Q&A calls. She was excited about a deal offered by a retail chain, but then they mentioned that they wanted to give her 60-day terms. This meant that she would have to wait 60 days to get paid after delivering the goods to their warehouse. She wasn’t thrilled about this and wanted to know if it was a typical term and what she could do about it.
When dealing with big chain stores and multi-million dollar deals, you often don’t have much say in the payment terms. These established brands know they have the upper hand. They have millions of customers who can buy products from them, both in their physical stores and on their websites. They invest a lot of money to stock products in their stores, so they have the mindset of “deal with it” when it comes to payment terms.
Typical Payment Terms
Typically, big retail chains will offer payment terms of 30 days or 60 days. In rare cases, they may even go up to 90 days if they’re particularly strict. The specific terms can vary depending on the retailer, so there’s no one-size-fits-all approach. When negotiating a deal with a retailer, they will usually inform you of their payment terms before finalizing the agreement.
Negotiating Payment Terms
If a buyer presents you with payment terms that you’re not comfortable with, you can have a further discussion with them. Politely express your preference for shorter payment terms, such as 30 days, and see if they are willing to accommodate your request. However, it’s important to remember that as a business owner, you need to weigh the pros and cons of holding out for shorter payment terms. If the retailer is unwilling to budge, you have to decide whether you’re willing to accept their terms or walk away from the deal.
Appreciating the Opportunity
It’s important to remember that being able to sell your products in big retail stores is a valuable opportunity. These retailers have their own costs associated with running their businesses, and they are doing you a favor by allowing you to be in their stores. While it may be frustrating to wait for payment, it’s essential to approach the situation with understanding and professionalism.
Different from Online Marketplaces
Selling your products through big retail chains is different from selling on online marketplaces like Walmart Marketplace. When you receive an order from a retail chain, they are making a significant investment by buying a specific quantity of units from you. This is different from selling one product at a time with the hope of a return. It’s important to recognize that the payment terms reflect the fact that the retailer is committing to purchasing a large quantity of your products.
Exploring Further Options
If you’re concerned about the delays in payment for larger quantity orders, there are third-party services available that can help you with this. These services can provide financing and handle the payment delays on your behalf. This is a topic that is covered in more detail in my Retail MBA program.
In conclusion, when working with retail chains, it’s important to understand and accept the payment terms they offer. While it may be frustrating to wait for payment, it’s essential to approach the situation with professionalism and appreciation for the opportunity to sell your products in their stores. Remember that negotiation is possible, but ultimately, you need to decide whether the terms are acceptable for your business. If you’re interested in learning more about retail terms and strategies for success, I encourage you to check out my Retail MBA program at retailmba.com.
Thank you for reading, and I hope this article has provided you with valuable insights into payment terms in the retail industry. Stay tuned for more informative content from Retail MBA!
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In this training, I will discuss some of the things to think about when approaching a retailer to sell your products and become a vendor. Hope it helps! 🙂
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