Learn to collect money with confidence and grace
When you are wholesaling your products, you will most likely use two different types of
wholesaling:
One: the consignment. Two: wholesale purchase.
Consignment means people will allow you to display your product in their store, without
the storekeeper investing any cash. They pay you, when (if) the product sells. Stores
keep say 50% and you keep 50%. (I would always bargain with them to begin with a 70-
30 split, favoring you. You are just starting and they are risking NOTHING, so the
percentages can reflect the risk.)
Consignment is a good way to get your product in front of people, if the merchant does
display the product in front of people. You need to oversee to be sure that you have
your art showing in ways that inspire people to buy. Otherwise, you and the merchant
lose.
When your product is on consignment, it needs to be recorded and remembered. Don.t
let hundreds of dollars of inventory stay in a store if it is not selling. Also, you need to
receive monthly checks for pieces that did sell, and you need to know which pieces they
were. So be sure to number your pieces and provide some way for the retailer to keep a
record. If their POS system is sophisticated enough, that won.t be a problem, as each
piece of inventory is monitored at the time of purchase.
Obviously, you would rather the retailer purchase the product. If they do, they have a
vested interested in the sale, and work harder to promote the product. But often they
won.t purchase until they have tested the new designer, so pay your dues where you
must.
How to ask for money
For those of you Godfather fans you will know what I mean when I refer to the horse.s
head – You don.t need to send such a strong message when asking for your money, but
you do need to ask.
If you had an employee named Jennifer, and she went to the retailers to deliver some
product, but you noticed she forgot a box – would you be shy to call her at the retailer to
inform her? No? Let me assume that is because – you have a relationship with
Jennifer, you are on talking terms, and she would want to know.
The same can be said for money. When you call one of your distributors (retailers) to
ask for either 30-day account payments or consignment payments, you could just as
easily be asking them about their next order. It is ONLY MONEY. You are not asking
for their first-born. You are telephoning to ask them to put the check in the mail ASAP.
You are a small business and you require cash flow. Simple.
When we get into trouble with collections is when we get emotional about the process.
Money and emotion are not the combination for even distant cousins. Money is owed
due to usage of some kind. Someone “used” your talent to create jewelry, and now they
need to offer you money in return. Strangely enough, if you are uptight about the idea of
needing to remind them, the retailer will “smell” it, and responses can range from mild
agitation to outright rude behavior or avoidance.
Ask the tough questions:
Hi Bob – It’s Mary Moneymaker from Money Matters Designs. How are you folks
doing? Listen Bob, I am doing my monthly accounting and noticed I don’t have
the check from you yet for last month’s payment. Was it overlooked somehow?
Hey, no problem, I understand that can happen easily. Would you be able to
drop it in the mail today? Oh, I see. When is your accountant back in the office?
Is that Wednesday the 23rd?
Okay great. Now, let me confirm the amount – yes, I see it is $341.00. I will look
for the check by the 28th. Thanks Bob, and thank you again for your business.
(Be sure to send Bob a quick thank you note when the check is received)
Note that Mary asked for the date and reminded Bob on the amount. Mary asked for
confirmation. If this was the second call, she would be asking what day she should call
the accountant and for their name. There would be no anger or hostility. This is about
cash. Period. No biggie. But not going to be ignored either.
What if they don.t order from me again?
If they have a problem with you asking for money that is due you, or a problem with
paying within a reasonable time, you don.t want your product with them anyway. There
are, literally, thousands of places that will distribute good product like yours, why waste
time or energy on those who don.t offer a win-win solution.
Short of hiring a goon (just kidding!), you can be quite effective with your consignment
business records when using Bead Manager Pro. The software not only calculates your
inventory and tracks your designs etc, but also creates an invoice for consignment users
based on what they report either sold or did not sell within the 30-day time frame.
You enter a few details into the software and the rest is done automatically for you. The
software does not make the actual phone call for you, but if it did, you would miss a
chance to create another good impression on your distributor!
You many want to consider other forms of marketing your jewelry. A home or online
party can be a low-cost and highly rewarding type of direct sale. In your upcoming
chapter we will take it step by step – the first being: how do I sign up hosts to host the
party?