One of the biggest issues or challenges indie and emerging designers tell me they encounter is getting payment when they ship out their goods to a retailer.  It can be quite challenging getting paid even from the largest retailer!   Here are some tips you might want to consider as you start selling your collection at wholesale.

1. Request payment by credit card only-  this is by far the easiest and fastest method of payment.    You don’t have to worry about checks not clearing,  and C.O.D (cash on delivery).  You can request the card information up front or request at time of shipment.   Remember the card can not be charged until the goods are shipped!  About a week before you ship out the merchandise send a courtesy email or give the store buyer a call to remind them that you will be shipping out their merchandise as promised and will be charging their card.  That way there are no surprises on your end and theirs!

2. Extending net 30, 60 or 90 days credit terms.  That means the retailer is asking you if they can pay 30, 60, or even 90 days after the original invoice date.   This is common when dealing with a department store or large online retailer since they often do not check your merchandise into their inventory at least two weeks you ship it.   This can be tricky for any emerging designer.   If you do decide to extend credit terms, check online services like Dun & Bradstreet to check a company’s credit status.  If you don’t feel comfortable extending credit terms -don’t do it!  Though it can be very difficult to do, sometimes it is best to turn down an order rather than worry about how you are going to get paid for it!

3.  Work with a factor- also known as bridge or asset financing -the factor will handle collecting payment from your retailers.  How does it work?  The factor will buy your invoices from you.  Think a loan but without it affecting your personal or business credit.  One advantage of using a factor is that you could take on larger orders that you didn’t have the opportunity to do so before.   It can also give you the financing or cash flow you may need to produce your collection or prepare for your next trade show.  However this comes at a cost that will take a substantial chunk out of your profit margin.  Factoring can cost you anywhere from 15-25% of each invoice/order so you want to do some substantial research before you decide on working with a factor.  It may be too large of a percentage once you account for all of your expenses.

** Sign up for our Emerging Designer Webinar on Tuesday, June 12th or Wednesday, June 13th before midnight and receive a private 30 minute consultation plus the webinar for only $79.00!!!  That’s a $200 value!

**Whether you are a DIY or Emerging designer you will learn how to showcase your line the right way the very instant your collection is completed. Today’s the day. It’s time. What are you waiting for?