When to Say NO to a Sale

 

NO SALE

 

Would you ever turn down a sale? Initially you might not think so. Here are some circumstances that may have you reconsidering:

 

Under minimum. Buyers who cannot come up with a minimum wholesale order for your work rarely turn into good, repeat customers. Sometimes this purchase is clearly for personal use, which takes advantage of you as the artist when you are seeking actual wholesale business. Even if they plan to sell your line at retail, they must create a large enough display to make visual impact. Your minimums should be set at a size to give your work a good chance to sell in the store.

Buyer wants terms and cannot produce a credit sheet. A majority of opening orders these days will be written with payment made (via credit card) at the time of shipping, but sometimes buyers are looking for Net 30 terms. They should be able to produce a credit sheet with several references. If not, ask them for the names of other artists at the show whom they do business with, and talk to those artists. If you can’t get good references, don’t extend credit, or decline the sale.

Buyer wants consignment. Do you want to tie up your inventory by shipping to a store that has no investment in your work, and where you take all the risk? There are certain times when consignment can be used as a strategy  – i.e., for specific items with an ongoing wholesale account. Be very careful and make sure you understand the pros and cons.

Buyer wants extended dating on the opening order. This term refers to allowing longer than 30 days for payment of the invoice, and is a red flag. It is used in particular industries for certain types of products, but for a small business like yours, it most likely means that they buyer has financial problems and you can count on never getting paid.

Other artists have a cautionary tale about the customer. The artist community is one of the most generous and helpful out there. Gossip can be untrue, so take reports with a grain of salt. Yet, certain retailers have earned a bad reputation for a good reason. If you want to sell to the customer anyway, get a credit card number and charge it just before you ship. Don’t ship before payment goes through.

Exclusivity issues. Turn down the order if the buyer’s gallery is located too close to another established account that has an exclusive arrangement with you. Honoring exclusivity is a must if you have an agreement, but consider carefully before you give exclusives to any retailer – and make sure it’s worth it to your business.

Oversize order. What if you are approached by a buyer for a large retailer who needs a massive order? If you simply cannot scale up your studio to produce the order in time, or do not have financial resources for supplies, etc. you could end up a loser. One small company took out a high-interest loan for materials to fill a huge order for a chain of stores. By the time the retailer paid the bill (120 days out), the interest on the loan had eaten up all the profits. The small manufacturer made nothing. Don’t let this happen to you.

Repeat offenders. If you’ve have had a bad experience with a retailer in the past, and they request a “do-over” to get in your good graces, think about it carefully. You may be able to resolve a payment issue by taking a credit card up front, but if the problem involved other bad behavior, it might be wise to decline. There are plenty of good customers out there to do business with.

Copyright theft. If you suspect the “buyer” is a scout for a company who may plan on stealing your copyrighted designs, decline the order and report this to show management immediately. It’s an unfortunate fact of life that copyright theft exists and it can be hard to fight, especially when the manufacturer is out of the country.

No financial commitment. When asked to create a special commission or do other extra work, get a deposit from the customer. If they have no “skin in the game” it’s easy for them to opt out after you have gone to a lot of trouble. Create a contract that guarantees you will retain some or all of the deposit for work completed if the deal ultimately falls through.

Outright scams.  Unfortunately, con artists out there are willing to steal from anyone, including artists. Quite often this is done through email, so you must take precautions and learn how to avoid this problem. See more about scams here.

When your gut tells you it’s a bad deal. Sometimes, you just get a bad vibe that the buyer isn’t being honest. There is nothing wrong with trusting your intuition and letting go of a sale if it just doesn’t work for you.

There are many scenarios where you may choose not to go through with that sale, order or contract. Sometimes artists are so eager to sell their work that they ignore red flags. If something seems too good to be true – it probably is.

What’s your experience? Have you turned down business? Was it a smart move?

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