Why is it important to have clear Terms and Conditions when you sell wholesale

Updated: Jul 30

The type of Terms and Conditions I want to focus on is not your full legal ones but the most common asked for pieces of information buyers want to know when they are interested in stocking your products. Having clear T & C's will help you come across professional and you can use them as a sales tool too and in this post we will talk a little bit more about this. For even more information you can also sign up to my monthly newsletter to receive a 15% discount on my my ebook.



Minimum order

Your minimum order is the least amount of money a retailer would need to spend with you each time they place an order. The minimum order value should reflect your prices and the size of your range, if you have a very small range start of with a lower minimum order then increase if you wish it as your range grows but make sure to give your stockists plenty of notice.


Average for the home and gift industry which includes greeting cards is between £80-300.


Carriage Paid

Carriage paid means free shipping. I don't know about you but I often spend a little bit extra if it means not having to pay for shipping? Retailers are exactly the same, many absolutely hate paying for carriage as it feels like paying for nothing so by setting a carriage paid limit you are encouraging retailers to increase their order value with you.


If a stockist place an order that is slightly under carriage paid, get in touch and ask them if they would like to add to their order before sending it as most of the time they will and you then make more sales.


The amount is usually around twice as much as your minimum order which means the average is somewhere between £150-£500 depending on how bulky your products is. It's important to point out that this is for UK mainland only. It cost a lot more to ship to the channel island and northern and southern Ireland.


You will also have to set your carriage, average in the industry is between £5-15 I would say.


Both minimum order and carriage paid are usually quoted ex VAT.



Pack Sizes

This is not strictly speaking part of your terms and conditions, although many do mention them in theirs. They are a great way to increase the order value and encourage stockists to buy more of a single type of product/design. A pack size is traditionally set per sku, meaning it's per product so if you have a red candle, a blue candle and a green candle your pack size would be for x quantity of the red candle. Some do mixed packs, particularly for lower priced items or if sold as a set.


The average is somewhere between 3-24 units although some go as low as 2 or much higher. As a general rule of thumb small and more affordable products come in a higher pack than bulkier and more premium items. Very bulky items or high-value items usually come in single units.


Cushions and homeware often come in 3's

Notebooks in 6 or 12

Greeting cards might be 6,12 or 24


When setting your pack sizes consider how you will be shipping your products, if you make mugs and you buy in the blanks in packs of 6 so you already have suitable boxes for this it would make sense to sell them in a pack size of 6. This would both save you time and money when packing your wholesale orders.


Payment Terms

As you start out you might want to encourage your stockists to pay proforma (payment upfront) for as long as possible but not all retailers will accept this and at one stage most of your stockist will expect to get a credit account with you. Industry-standard is 30 days credit.


Larger retailers will most definitely want a credit account and you need to consider this carefully to make sure that it's something you can afford to do as they also often want longer payment terms than 30 days.


Summary

Your payment terms should be clear and simple, in the ebook there's an example for you if you're not quite sure how to write yours.


I work one-on-one with my clients and help them with all aspects of their wholesale. If you are feeling a bit overwhelmed or want some reassurance that you are doing the right thing, then get in touch (therese@smallbusinesscollaborative.co.uk).


  • Twitter
  • Instagram
  • Facebook
  • LinkedIn
  • Pinterest

© 2019 Small Business Collaborative