If you've operated your stores for more than a month or so, it's inevitable that you'll be approached by fledgling manufacturers, vendors and suppliers. There are good ones and bad ones out there. Small and new can reveal an organization that is honest and passionate about what they sell, or a group of real fly-by-night operators. All suppliers had to start somewhere and many of today's large ones started out in their garage or even in the trunk of their car.You'll need to do your homework and check out these suppliers thoroughly. Google their names on the internet and ask for three references that they already supply and call them, even if they are your competitors. You need to determine how reliable they are. You'll also need to contact any appropriate government agencies if they are supplying foreign products that may have issues with safety, lead paint or may have other tainted features. Always investigate any foreign products from any supplier to make sure they comply with our standards.If you've determined that this fledgling supplier is on the level, why not suggest for a test period of a few months, that you take the goods on consignment into your stores? This gives both of you an opportunity to evaluate one another with low risk to your stores. While large and established suppliers may balk at consignment shipments, a new and smaller supplier may jump at the opportunity to prove themselves. Over this test period you can evaluate consistency of product, reliability of the supplier and if the new products appeal to your customers. If they don't the consigned goods can be returned to he supplier without you getting stuck with them.If the goods are selling well, you'll also want to see quickly your new supplier can replenish stock as well. A consignment agreement can be a win-win situation for both parties and create the foundation for a long term relationship. The fledgling supplier can grow as you do!You'll need a Consignment Agreement to document your relationship. If you do not have one, please email me at and we'll send you our free agreement form. This is a simple one page document that covers all the issues of consignment relationships, including regional exclusivity.
Take Action Today:Always do your homework and research new suppliers. Call current retailers and get their opinions on how these suppliers operate. Ask about their honesty, reliability and track record for replenishment.Are you their potential first client? You'll have no one to contact for references. Consider visiting their premises, even if it's just a garage to see how they operate and ask about their expansion plans for the future. Consider their stability and honesty over the scope of their existing facility. We all have to start somewhere. Then go with your intuition and gut feeling. It's all part of being an entrepreneur.Evaluate the relationship for at least 30 days and determine how the new merchandise appeals to your customers.Always have a written consignment agreement signed by both parties before you accept any merchandise.Determine how suppliers will handle warranties if applicable. Will they reliably repair or replace goods purchased by your customers? You should include an Over The Counter (OTC) warranty in your consignment agreement. Suppliers can pick up merchandise at your store for warranty work and customers can simply drop of the merchandise at your in need of service or repair during the warranty period.retailers, suppliers, vendors, merchandise, relationships, consignments, agreements, warranties, operations
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