The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

NOTABLE! You’re not selling wholesale?

Remove ads while supporting the Unscripted philosophy...become an INSIDER.

Raoul Duke

You wouldn't get it.
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Feb 26, 2016
1,548
5,472
1,285
Check posts 14 and 16.
I wanted - "Please tell me the EXACT steps. Don't leave anything out."
 

Don't like ads? Remove them while supporting the forum. Subscribe.

MoreVolume

Bronze Contributor
Read Millionaire Fastlane
Speedway Pass
Oct 6, 2016
283
438
221
NC
The only reason I see distributors still being around is because of two factors. Good distributors have sales reps, so they sell for you.

Also, shipping and delivery is difficult when you’re sending 15 lb cases of glass bottles. So, I honestly prefer to pay the distributor to handle that nightmare.
What forms of payment do you accept?

I currently accept check our paypal, but I feel as if there are methods that I should add....
 
OP
OP
Scot

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,749
2,796
Florida
What forms of payment do you accept?

I currently accept check our paypal, but I feel as if there are methods that I should add....
I accept credit card via Stripe api in my invoicing software.. but no one will ever use it.

Retail is antiquated and works 100% on checks.
 

Longinus

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 28, 2014
1,138
4,798
1,146
Poland / Belgium
Retail is antiquated and works 100% on checks.
I'm still awaiting payment from that company, but I have no clue how long this usually takes. Last week they said "it's getting processed". I asked to pay with wire transfer or ACH (whatever that may be). I just hope they don't send a check to Belgium.
 
OP
OP
Scot

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,749
2,796
Florida
I'm still awaiting payment from that company, but I have no clue how long this usually takes. Last week they said "it's getting processed". I asked to pay with wire transfer or ACH (whatever that may be). I just hope they don't send a check to Belgium.
Honestly, they’re probably sending a check to Belgium...

You should consider finding a service that has a US address they can mail a check to and have it deposited. Bake whatever fee that service charges into the wholesale cost.

It’s also very important to make your Net teens very clear from the beginning.

A couple tricks are 2%/30 Net31 aka pay me before 30 days, I give you a 2% discount. If you pay ok day 31, it’s full price. Or what my LTL company does, Net15 with a 15% fee added onto late payment. I wouldn’t try that one just yet, it’s lisble to piss off your customers.
 

Longinus

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 28, 2014
1,138
4,798
1,146
Poland / Belgium
Thanks @Scot this is valuable info.

I'm gonna just ask them how they made the payment. Told them the delivery will follow AFTER the money is on my account. Is this common too?

Also, when you give a price per piece, does that include shipping costs to that company or do you quote this separately?
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
...

Also, when you give a price per piece, does that include shipping costs to that company or do you quote this separately?
When you give your distributor a wholesale price, offer them two prices. FOB and shipped. FOB means they arrange to pick it up and is typically a lower price. Or, figure out what LTL will cost you and add that in. For example, I gave my distributor FOB price of $39 and shipped $41.50. My freight cost $190.
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
Retail is antiquated and works 100% on checks.
Part of this is habit, and part is convenience.

The way traditional Accounts Payable departments work is as follows:
- The buyer creates a Purchase Order, this is entered into the accounting system and mailed/emailed to the vendor
- The invoice arrives from the vendor, this is received by the AP department and entered into the system.
- The AP department checks with the warehouse to make sure the items arrived. This is either a physical slip of paper, or is entered into the accounting system by the warehouse.
- Once all three parts of this match up, only then the invoice is scheduled for payment. Most companies are not going to pre-pay you for items. Too much risk, and too much cash tied up.
- Most AP departments run checks once a week, once every two weeks, or once a month. You'll probably start to notice a pattern as to when they arrive. The reason is, they can just take the list of all the invoices that have been approved and matched in the previous steps, and click "print."
- Most large businesses won't pay you by credit card. The amount of time it would take them to go in an enter credit card information for any real number of vendors would be ridiculous. Printing and mailing checks is substantially faster.

In the US, we haven't really caught on to ACH payments en-masse yet. A lot of times, you have to go into your bank account to schedule them. It's substantially faster to just pay by check.
 

IGP

Gold Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Speedway Pass
Aug 24, 2015
506
1,359
426
47
Part of this is habit, and part is convenience.

The way traditional Accounts Payable departments work is as follows:
- The buyer creates a Purchase Order, this is entered into the accounting system and mailed/emailed to the vendor
- The invoice arrives from the vendor, this is received by the AP department and entered into the system.
- The AP department checks with the warehouse to make sure the items arrived. This is either a physical slip of paper, or is entered into the accounting system by the warehouse.
- Once all three parts of this match up, only then the invoice is scheduled for payment. Most companies are not going to pre-pay you for items. Too much risk, and too much cash tied up.
- Most AP departments run checks once a week, once every two weeks, or once a month. You'll probably start to notice a pattern as to when they arrive. The reason is, they can just take the list of all the invoices that have been approved and matched in the previous steps, and click "print."
- Most large businesses won't pay you by credit card. The amount of time it would take them to go in an enter credit card information for any real number of vendors would be ridiculous. Printing and mailing checks is substantially faster.

In the US, we haven't really caught on to ACH payments en-masse yet. A lot of times, you have to go into your bank account to schedule them. It's substantially faster to just pay by check.
ACH is only available in the US. And it has widespread usage every day.

Direct deposit is ACH. Online bill pay is ACH. Anytime you can scan a check or take a picture of a check to deposit, that's ACH.

ACH is WAY faster than paying by check. You can have funds typically within 48 hours. Paying with a check can take 7-10 days to get funds.

Source: I was part owner in an ACH processing company before we sold it in 2006.
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
ACH is only available in the US. And it has widespread usage every day.

Direct deposit is ACH. Online bill pay is ACH. Anytime you can scan a check or take a picture of a check to deposit, that's ACH.

ACH is WAY faster than paying by check. You can have funds typically within 48 hours. Paying with a check can take 7-10 days to get funds.

Source: I was part owner in an ACH processing company before we sold it in 2006.
Ah, I may have been unclear in my description.

ACH, in my experience, is not used as much in the US as it could be, because many companies find it faster to print checks. This is due to a combination of old/clunky software, old/clunky AP processors (yes, the people), and just habit.

I'm not saying it isn't faster to receive money, I'm saying the systems I've seen that people used took more time thank clicking "print" in the AP software.

If ACH is just as fast as checks to create from the AP side, then there is a lack of education in the industry.
 

Longinus

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 28, 2014
1,138
4,798
1,146
Poland / Belgium
- Once all three parts of this match up, only then the invoice is scheduled for payment. Most companies are not going to pre-pay you for items. Too much risk, and too much cash tied up.
I stated in my price offer that my payment terms are 100% to be paid up front. Nobody ever mentioned this, even though I told them several times I will deliver as soon as I have the money on my account.

Am I just being ignored here or do you think they might make an exception? I already got the PO and sent the invoice btw.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
I stated in my price offer that my payment terms are 100% to be paid up front. Nobody ever mentioned this, even though I told them several times I will deliver as soon as I have the money on my account.

Am I just being ignored here or do you think they might make an exception?
That description is standard AP procedures.
It all depends on what size organization you are selling to, and what their internal policies are. It's completely possible they will pay you 100% up front, it's just rare.
 

smithsta

Bronze Contributor
Speedway Pass
May 4, 2014
124
221
161
Beauty - Sell to stores/dealers at half of retail. Make em pay credit card up front. If it's a large store or chain, offer them 30-day payment terms. Define a minimum order, like $150 worth of product, for example. If $150 is the minimum, then offer free shipping (or free product) on orders of $300.
I've just had a somewhat small distributor/vendor enquire about my beauty product. I offered them 35% off RRP but they have suggested that they require 50% off RRP to make it work for them. Do you think it's worth accepting their offer or perhaps meeting them half way?

I'm somewhat hesitant to offer 50% off RRP as this leaves little profit margin for me (18% profit margin after VAT) but at the same time it's very little work for me (as they reached out to me) and it would be nice to get my first distributor in the bag.

What do you think?
 
OP
OP
Scot

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,749
2,796
Florida
I've just had a somewhat small distributor/vendor enquire about my beauty product. I offered them 35% off RRP but they have suggested that they require 50% off RRP to make it work for them. Do you think it's worth accepting their offer or perhaps meeting them half way?

I'm somewhat hesitant to offer 50% off RRP as this leaves little profit margin for me (18% profit margin after VAT) but at the same time it's very little work for me (as they reached out to me) and it would be nice to get my first distributor in the bag.

What do you think?
First, do you have to pay VAT on wholesale? In the US, the end user is responsible for collecting sales tax, ie the store actually selling to the customer. Find out if this is the case in the EU, because it should be tax exempt.

35% is no where near enough for a distributor, they still need to have margin to sell to stores. 50% isn’t unreasonable.

I guess answer the question this way.

Are these new customers, new business you never would have had before?

Are you still making a profit?

If you answer yes to both, I’d say go for it. Find out the VAT thing and potentially add more margin in there.
 

Longinus

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Aug 28, 2014
1,138
4,798
1,146
Poland / Belgium
35% is no where near enough for a distributor, they still need to have margin to sell to stores. 50% isn’t unreasonable.
I'm struggling with the margin for the distributor as well. Isn't that different for every type of product and distributor? I quoted some prices for a distributor, but I think I asked too much because I don't hear him back.
 
OP
OP
Scot

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,749
2,796
Florida
I'm struggling with the margin for the distributor as well. Isn't that different for every type of product and distributor? I quoted some prices for a distributor, but I think I asked too much because I don't hear him back.
Have you asked the distributor what kind of margins they need? For example, while speaking to a potential distributor, I flat out asked, “what margin would you need to make this deal work?” To which he replied, 30%.

I got into detail on this earlier in the thread while talking about margins. But it’s important you ask these questions. You need to know what margin the store wants to make first, then work backwards to what margin the distributor wants.

These numbers are flexible for every deal. I would never put these in your first email or contact. Agree on the merits of the deal and close the sale before you start throwing out numbers.
 
OP
OP
Scot

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,749
2,796
Florida
New strategy Im going to try.

I applied to Wegmans through RangeMe. They denied my application after only looking at my profile for 6 seconds. And the buyer won’t answer my emails. Well, I’m going to get into that store.

How?

Most stores have preferred distributors they work with. I happen to know that Wegmans requires their natural and specialty foods brands to use a specific distributor. Distributors have buyers too.

I’m going to start reaching out to this distributor, confirm they are in fact carrying my competitors brand, and pitch my brand alongside it.

I’ll report back at the end of the week to see how this goes.
 

Yussef

Knowledge Recycler
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Jan 30, 2012
641
453
184
Great thread!

Currently awaiting payment for a near $8000 deal from a very big American company. I must say this happened quite coincidental.

I setup a website for my ecom brand and all of the sudden got their inquiry. They found my brand on Amazon and contacted me directly for +500 pcs of one of my products.

I could give them a much better price than the products I sell on Amazon and with still about 50% margin.

Now I'll add a "wholesale form" on my website and will definitely focus on more deals like that.

Have you registered for B2B sales on Amazon? Businesses that want to test you out on a trusted platform like Amazon before going to your private channel can quickly do that there and then build a relationship with you afterward.
 

Yussef

Knowledge Recycler
FASTLANE INSIDER
Read Millionaire Fastlane
Speedway Pass
Jan 30, 2012
641
453
184
Great Thread. For what it's worth, while I was in China this past October at the Canton fair, I was talking with anyone that I ran into that spoke English.

I just so happened to be in line behind a lady that told me an incredible story, but I will spare you the details.

Long story short, she wound up being the owner of a company named Finchberry Soap (See SITE Here). She shared how she had almost been homeless and struggling to start her business when someone suggested she go to the trade show in Atlanta called Americasmart.

She told me she barley had enough gas to get there but made it. The rest is history. She was able to get about 200k in orders (mind you she had no inventory...I don't recommend doing this but it worked for her) her customers were a little pissed that it took her 30 days to get their order to them but today she is doing 5-7 million in revenue per year and has been featured on some major TV networks. She said going to a trade show like that changed her life by exposing her to bigger businesses looking for new products. I believe she said the December session is better because buyers need to spend money before year end or something like that, don't quote me on that. Just something to consider.
 
Last edited:
OP
OP
Scot

Scot

Salad Dressing Empire
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,975
13,749
2,796
Florida
How did I not see this???
I thought you already commented on this ha ha
 

Don't like ads? Remove them while supporting the forum. Subscribe.

ZCP

Legendary Contributor
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 22, 2010
2,782
9,463
2,206
Woodstock, GA
most of our larger customers have moved or are in the middle of moving to ACH. The stragglers of our bigger clients are moving to CC. Smaller companies will probably never give up sending checks.

Though we have managed to move a lot of clients to our online payment processing. They like the cc rewards. We get our money upfront instead of 90 days after completion.
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
most of our larger customers have moved or are in the middle of moving to ACH. The stragglers of our bigger clients are moving to CC. Smaller companies will probably never give up sending checks.

Though we have managed to move a lot of clients to our online payment processing. They like the cc rewards. We get our money upfront instead of 90 days after completion.
I'm not a lawyer, so I'd be interested in the legality of the following:
1. Sign a new customer
2. Get an agreement up front with bank draft details/credit card details
3. Sign an agreement that states when they submit a PO, you will ship the items, and then invoice them. After a certain number of days (agreed upon by both parties), you will automatically draft their account/charge their credit card.

Would customers go for this? I imagine most wouldn't due to lack of control over cashflow, and concerns over not receiving the goods, but I'm curious to hear thoughts on either side.
I would think it would need to entail a mechanism for ensuring the proper number of items arrived at the proper place before drafting the account.
 

ZCP

Legendary Contributor
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 22, 2010
2,782
9,463
2,206
Woodstock, GA
@CareCPA isnt that just like a cc on file type of account?
Try it with a few clients. We got initial resistance when we began changing our payment terms. Now some clients let us know we have a new project by making their deposit online before sending us info.
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
@CareCPA isnt that just like a cc on file type of account?
Try it with a few clients. We got initial resistance when we began changing our payment terms. Now some clients let us know we have a new project by making their deposit online before sending us info.
I have my clients setup on recurring billing for the most part, so it's almost the same thing. I assumed it would be a little different here since the amount getting charged to them would be variable.
 

Hyrum

Silver Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 5, 2016
188
652
269
Nebraska
I'm not a lawyer, so I'd be interested in the legality of the following:
1. Sign a new customer
2. Get an agreement up front with bank draft details/credit card details
3. Sign an agreement that states when they submit a PO, you will ship the items, and then invoice them. After a certain number of days (agreed upon by both parties), you will automatically draft their account/charge their credit card.

Would customers go for this? I imagine most wouldn't due to lack of control over cashflow, and concerns over not receiving the goods, but I'm curious to hear thoughts on either side.
I would think it would need to entail a mechanism for ensuring the proper number of items arrived at the proper place before drafting the account.
My main suppliers all do this. I order products, they send them to me. They then bill my payment preference (ACH x2, CC x1) at a set time. One I have set up to pay every Friday, one on the 5th and 20th of the month, and the last one on the 10th of every month. I've never worried about not receiving product (they're all pretty good about replacing anything that doesn't make it in my order), and while it does remove some control over my cashflow, it just means I have to pay a little closer attention to make sure I don't overspend.
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
My main suppliers all do this. I order products, they send them to me. They then bill my payment preference (ACH x2, CC x1) at a set time. One I have set up to pay every Friday, one on the 5th and 20th of the month, and the last one on the 10th of every month. I've never worried about not receiving product (they're all pretty good about replacing anything that doesn't make it in my order), and while it does remove some control over my cashflow, it just means I have to pay a little closer attention to make sure I don't overspend.
Awesome. Glad to know this exists and is utilized.
I've been out of the physical goods arena for a couple years. Back when I did AP, it was all paper checks.
 

Greg R

Act, Assess, Adjust
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 28, 2015
1,046
4,705
1,136
Chicago, IL
Awesome. Glad to know this exists and is utilized.
I've been out of the physical goods arena for a couple years. Back when I did AP, it was all paper checks.
Just got paid by CC from a vendor for a huge order before i even shipped! Those are terms I like!
 

CareCPA

Platinum Contributor
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 2, 2017
832
2,978
655
31
Pennsylvania
Just got paid by CC from a vendor for a huge order before i even shipped! Those are terms I like!
Awesome!
I have a client who gets it the other way. His stuff arrives at Amazon, and he starts selling it before he even gets an invoice from the supplier. Who knew you could get terms for e-commerce?
I'm sure it's more prevalent when you have US manufacturers and suppliers. All those guys importing from China often pay the full amount before it even ships. Then they wait two months for it to get here.

Sorry to clutter your thread @Scot, just thought it was an interesting side discussion.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.

Sponsored Offers

  • Sticky
FEATURED! Introducing... WEALTH EXPO$ED, A Short Story By MJ DeMarco
Ah, I should've checked here to find out that it was free! Although, Amazon only charged $2 for...
  • Sticky
MARKETPLACE Fox's Web Design Guide: Earn $100K this year (Yes, 2020!) and Go Fastlane
Is it still available to send the application, your story is impressive, time to act. Ya this...
  • Sticky
MARKETPLACE Lex DeVille's - Advanced Freelance Udemy Courses!
Pick the one you need most. Some just buy them all. :D Loving your email sequence.
  • Sticky
MARKETPLACE You Are One Call Away From Living Your Dream Life - LightHouse’s Accountability Program ⚡
Dropping a quick note in here to say... if you are on TFL, you are part of an elite group of...
  • Sticky
MARKETPLACE Kill Bigger Incubator
I joined @Kak's business incubator in the first week of May. During our daily chats we uncovered...


Visit A Forum Sponsor
sponsor

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom
AdBlock Detected - Please Disable

Yes, ads can be annoying. But please...

...to support the Unscripted/Fastlane mission (and to respect the immense amount of time needed to manage this forum) please DISABLE your ad-block. Thank you.

I've Disabled AdBlock