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Hello,
I am looking into information on the logistics of selling apparel to wholesalers. What i find when i look it up is high level what you have to do and how you need to conduct yourself to land the deal. I understand that. The piece that i don't get (probably a very easy part) is setting up distribution agreements and getting paid.

So my question: what are common terms of payment? I would prefer to be payed before i ship products. What do i need in my distribution agreement to cover me and offer a good contract? I understand pricing for wholesaling and selling shirts so i am covered there. Next is receiving payment. How does receiving payments work? Do i send an invoice to the customer after they have sent in an order form and then wait for the money? this seems a little obnoxious.

Any help would be greatly appreciated and it is just this small logistical stuff that i cant really conceptualize right no but im sure I am just over thinking it. thanks!
 

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Your question involves both legal and accounting expertise. Unless someone here is one of those, things can go seriously awry for everyone.


The reality is, the right answer could be anything. What we do not know is if the distributor is placing an order for the product yet to be created or if you currently have 10,000 shirts ready to be sold.
You may want to consider a down-payment on order receipt to cover the cost of the garments.
In some cases, payment is incremental based on passing performance gates with final "in full' payment when the last garment is received.


The best environment is to have them order and pay on line! Now that would be cause for a happy dance and you get paid before doing anything. Well, we can all dream.

I suggest an attorney should create the contracts based on the above considerations.
Your accountant will be able to advise on managing the income channel and setting up the system to track the PO, tax and non-taxed accounts, and incremental payment situations.


I've always used deposit and incremental payment.
 

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There is no one-answer-fits-all.
If you were Nike, you could ask for whatever you want, and you'd probably get it... Obviously this is not the case.


I would suggest you to be nice to wholesalers, but not "too nice". Start by selling only to those who want to buy with full payment on delivery. This is also a good test for your product. A good product will sell easy.

You can accept CC payments if you like, but for large orders I suggest using the invoice number as a reference for a bank transfer.
If you sell as a brand, you may want to set a minimum retail price requirement. You don't really want thousands of your products ending up in a discounter, while you are still in your startup stage. It will upset your other customers, trying to sell the same product for a profit, and may create a snowball effect. You could offer to buy the products back, for a per-arranged price.
 
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