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Sale or Return - which way does it work?

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  • Sale or Return - which way does it work?

    Hi there,
    I'm unsure about how sale or return works, and hope someone can help...

    I thought I would have to give the product to the retailer, and ask for my payment within 30 days of the item being sold?

    However, someone recently told me that was wrong, and that I should sell the products to the retailer, with the agreement that I will buy them back (at a cheaper rate) if they do not sell.


    Also, does anyone know of a decent contract template that will give me an idea of the sort of thing I need to include on it?

    I know sale or return is a bit frowned upon in this forum, but with the economic climate the way it is right now, I feel like this is the only way I can persuade retailers to take a chance on my products.
    Obviously if the retailer wants to buy the stock straightaway at a wholesale price this would be great - but I want a sale or return back up plan, just incase!

    I look forward to hearing your thoughts.
    Gemma.

  • #2
    I have always give the product to the retailer as you have said, never heard of doing it the other way so can't help there I'm afraid
    Nici

    Website: http://www.goblindreams.co.uk
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    • #3
      Hi Gemma

      I don't think it's frowned upon, it's more the case that selling stock at a wholesale price is a better option for a crafter. However it's tricky to clinch a deal like that and I'd bet about 90% of crafters here do sale or return. Often it's a way of introducing your items to a retailer in a way that's risk free for the retailer and if they sell they might then consider buying outright next time.

      When I had my little high street shop I sold a few items as sale or return and we did it the first way you described. I'd imagine the other way is more of a wholesale deal with guaranteed buy back option rather than sale or return but I've never really come across it before.

      I know BeadsbyDesign posted a really useful article about sale or return which would be absolutely invaluable to you, I'll see if I can find it and post a link as it covered contracts as well as other things to consider (such as who is responsible for damaged/stolen items).
      Last edited by nattynetty; 07-05-2011, 12:48 PM.
      Visit Natty Netty for a huge selection of Iris Folding supplies

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      • #4
        Here's the link to Karen's post http://www.craftsforum.co.uk/showthr...ht=sale+return and you'll find a link to the article in her post
        Visit Natty Netty for a huge selection of Iris Folding supplies

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        • #5
          I have a section on sale or return in my free guide. The crafter gives the goods to the trader to sell or return to you if they don't make a sale. You need to keep good records of who you are dealing with and check on them and your stock. There are advantages and disadvantages of course. Shops may be inclined to push the stock which they have already paid for rather than the sale or return stock. However, in times like this this, many shops are happy to take stock on a sale or return basis as ot frees up their cash.
          Allison
          www.cardtoppers4crafts.com
          www.epbeads.co.uk/freeguide

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          • #6
            Yeah I've never heard of doing it the second method you mentioned. Normally you'd give them items, if you ever want to request them back or swap items for newer pieces cause things aren't selling you can. Then if they sell an item they pay you the agreed percentage of the rrp.

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            • #7
              Originally posted by gemmajabowski View Post
              Hi there,
              I'm unsure about how sale or return works, and hope someone can help...

              I thought I would have to give the product to the retailer, and ask for my payment within 30 days of the item being sold?

              However, someone recently told me that was wrong, and that I should sell the products to the retailer, with the agreement that I will buy them back (at a cheaper rate) if they do not sell.


              Also, does anyone know of a decent contract template that will give me an idea of the sort of thing I need to include on it?

              I know sale or return is a bit frowned upon in this forum, but with the economic climate the way it is right now, I feel like this is the only way I can persuade retailers to take a chance on my products.
              Obviously if the retailer wants to buy the stock straightaway at a wholesale price this would be great - but I want a sale or return back up plan, just incase!

              I look forward to hearing your thoughts.
              Gemma.
              Hi Gemma.

              When I worked as a gift buyer I would do sale or return where I paid for the items but if they didnt sell withn say 6 months then they were returned for a refund at the same price.

              As a crafter I do sale or return with a shop and I keep track of the things I give them and what they sell. I also make them sign a form which keeps title of my items with me until the product has sold and money has been paid to me, that way if they go bust the receivers cant keep my items and I should get them back as they are clearly mine.

              Hope this helps.
              Handmade jewellery, to buy gifts or just to treat yourself visit my website, commissions welcome or join me on facebook for a chat

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              • #8
                Thanks so much everyone!
                Ok I've taken all the comments on board, and have put together a sample sale or return terms contract.
                Is there anyone 'in the know' who would be willing to take a look at it and give me any pointers/constructive criticism/point out anything important i've missed?
                I'll be asking the retailer for a 70/30% split, so that i leave myself room to negotiate upto a 60/40% split. Does this seem ok?
                I'm thinking of leaving maybe half a dozen or 7 bags with them to start, as i read somewhere that less than 6 of one product never seems to attract sales well (dont know if thats true or not!).
                Look forward to hearing from you,
                G x

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                • #9
                  That's interesting. I've never (in 40 years of dabbling with sale or return) met that second method.
                  You might find the shop tells you the percentage (muttering get lost if you don't like it).
                  They might dictate the terms of when they will pay you.
                  And do get it very clear who is insuring the stuff. I was appaled at one shop who said they couldn't afford any insurance!!!!!!!!!!! (I didn't go back.)

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                  • #10
                    I'm thinking of leaving maybe half a dozen or 7 bags with them to start, as i read somewhere that less than 6 of one product never seems to attract sales well (dont know if thats true or not!).
                    I think that's right. I don't know about set numbers of items, but you definitely need a good display to grab a customers attention. Also, an expensive item that you don't expect to sell can draw attention to the display and help to sell the smaller items.
                    Celia
                    I can't be creative and tidy too
                    www.jencel.co.uk for beads, findings and threads
                    The Occasional Sheffield Bead Shop
                    Jencel on Facebook

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                    • #11
                      yep all the times i have done it you give items to shop and trust them to sell them and yes you need to keep a good check what you supply them with and get to agree to the amounts and items. As for them sighning a contract i think you are being very hopeful lol Best of luck and if you have a good enough product they will normally buy off you if you are good at selling :-)
                      Pauline (Deceased) and Charlie (wishing he was)
                      www.crafty-bits.co.uk

                      www.geckocards.co.uk Ps this link is to old site ( not there now)
                      But it was Paulines so i cant delete it

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                      • #12
                        I have a few bits in a tea shop up north and designed a very basic contract if you would like to see it I will happily share it with you, drop me a PM with your e-mail and I will send you a copy
                        Beautiful Things by Claire Mackaness

                        My facebook page http://www.facebook.com/beautifulthi...lairemackaness

                        My Blog www.beautifulthingsbyclaire.blogspot.com

                        Class lists and courses can be found at www.clairemackaness.com
                        or follow me on Twitter @clairemackaness

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                        • #13
                          I prefer not to get involved with the retail price, instead I write out the price at sale or return. That way I know exactly how much I will receive if it sells, or I get my stock back.

                          (Obviously I check what they are retailing it at, incase it shows that a product is underpriced!)
                          www.pollypolkadot.co.uk

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