# what kind of deposit can I ask from a retailer?



## Gitana Bohemia (Jul 8, 2009)

Here is the scenario...
Since I'm just starting, and have no inventory, I feel orders as the come in. The companies that supply me are pretty quick, so my turn around is one to two weeks. 
But here is the thing... the pricing for retail isn't the same as wholesale. For retail orders, I can cover the purchasing of the materials by asking for 50% in advanced. I haven't approached retailers since half of the wholesale price won't cover the initial cost, so how can I fulfill the order?

See my dilemma?
Any ideas?
Suggestions?

Thanks!


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## Chap Ambrose (Oct 21, 2008)

As far as taxes, I beleive you only have to collect them when selling to people inside your state. 

See this previous discussion for more info.

I'm not sure I fully understand your pricing dilemma.


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## Gitana Bohemia (Jul 8, 2009)

let's see if can simplify this... let's say it costs me $14 to make a shirt, when I sell that shirt to an individual, I sell it for $28. To sell that same style shirt to a retailer, I can't ask for $28, since they too have to make a profit and the shirt's price has to remain affordable. So let's say the retail price is $20, half of that will be $10, which leaves me $4 short of the money I need to buy the materials.
Did I do a better job explaining it this time?

Oh, here in FL the taxes are collected from the "final" buyer.

Thanks!


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## Dennis Graves (Apr 27, 2009)

I hope your numbers are just an example, because they are really screwed up.

Even if the retailer paid your wholesale price ($10) before they got the order you are still going to lose $4 per shirt if your cost is $14. I'm sure you realize this, it just adds another problem to your situation. I also might have misunderstood your "retail" price. You said your retail price was $20, I think you meant your wholesale price is $20.

You need to lower your cost of producing a shirt, or raise the perceived value and final selling price. Most of the posts in the forum say that retailers will mark up the shirt 2X - 2.4X their wholesale cost from you.

I would be SHOCKED if you find a retailer that will pay you 1 to 2 weeks before they even receive the shirts. You'll be lucky to find someone that will pay 30 days after, most pay 60 to 90 days after receipt of shirts.

But, who knows, you might have the next most popular clothing line and you can set your own terms with retailers. But it will take A LOT of marketing beforehand to make them come to you and ask to sell them.

Good Luck and Stay Positive,

Dennis Graves


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## donsignguy (Apr 5, 2008)

for my 2 cents i would still get a 50% deposit, dig in to your pocket for the balance, as for me since i manufacturer ( not really but i create not just buy and sell) i get more than bubble my money on the things i make and sell retail, my normal mark-up is not less than 3 times my cost not including labor and that is the absolute minimum. i usually get 5 times the cost and let that handle the cost of labor so if a sign cost me 5 dollars in materials i get 25 retail and 15 wholesale with min. purchase of the same item. so 50% covers me on whole sale. Since i create the product i feel justified on the retail price of 500%mark-up and to be honest I GET IT and sales are good, when i sell retail i get payment up fount on the whole thing if a customer bulks i say i guarantee they will be happy or i will refund the money but this way i am sure they will come back for the product. in 10 years i have had only 2 customers not buy and only one customer not come back and only one partial refund as the customer changed there mind on what they wanted so we came to an agreement every body happy.


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## Gitana Bohemia (Jul 8, 2009)

Thanks Don! I get what you are saying, and the most I get from it is that I can't be fearful to ask for what I think is fair for my product.

Thank you again for taking the time to reply.
Linda


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