Question re Sales Agreement

[Velveteen]

Just looking over a contract at the moment as I've applied to be a stockist of a line of skincare that I'll be using in my salon and direct selling (won't be selling online) to clientele.

Overall, the contract is okay even if it is a little on the rigid side.

However, I note that the distributor is applying a one off and non refundable "Stockist Fee" of £250 which is listed as being for the "distributor to help grow your business" and lists proposed commitments such as "training all staff" and "listing your business for free on our website" and other things that I have found to be customary distributor duties on other contracts.

Due to the size and hours of business, much of what is proposed by way of workshops etc that excludes me so, realistically, 95% of what is proposed would not be applicable to me anyway. I further note that any returns made due to damage/spoilage incur a "25% restocking fee".

When I queried this with the distributor the reply was "this is a fee all the stockists have agreed upon" with no further explanation. The fact that all of the stockists are large, well established salons with several staff each doesn't seem to be a point of difference to them. The restocking fee was "to help you renew your stock". Hmm.

Have you come across fees like this in your sales partnership agreements? Do I just bite the bullet and pay this fee or back off and choose someone else?

Would love to hear from distributors on this issue as well as stockists.

 

[-sophisticutz-]

Hi. I have heard of re-stocking fees when you send unwanted stock back but if it is damaged or spoiled? So, if you take a delivery of stock that is damaged say by the courier, you have to suck up the 25% re-stocking fee? Sounds strange.

I have never had to pay a fee to be a stockist of any products but maybe beauty is different.

I really don't know what to advise but if it was me it would have to be a bloody good range for me to accept those terms!

 

[fozzyo]

I'd evaluate other companies.

That sounds very strange, I'm not aware of any of the major brands applying such fee's for opening an account. If its for training, then I'd rather keep my money and pay the fee for training when I want it.

Also, look at the customer service experience. This is how they are treating a prospective distributor / client of theirs. Once you open your account, are they suddenly going to be a lot better? And what if you decide the range doesnt fit / work for you ... then you are £250 out of pocket even if you sell all your stock.

Not sure about that myself.

Mat

 

[Velveteen]

Hey thanks guys for responding so quickly.

Sophi, the restocking fee applies to stock that is damaged en route. (The distributor also states that items cannot be returned for any other reason but I think she'd have a hard time reinforcing this at law).

I have never had to pay a fee to be a stockist of any products but maybe beauty is different.

I've dealt with a lot of distributors and I've never come across fees like this either. In addition, they're a niche brand and as yet largely unproven in Australia and although it's a beautiful product, it's not as if they have a huge pedigree to lean on.

Also, look at the customer service experience. This is how they are treating a prospective distributor / client of theirs. Once you open your account, are they suddenly going to be a lot better? And what if you decide the range doesnt fit / work for you ... then you are £250 out of pocket even if you sell all your stock.

You're spot on. I mean I love the product but my clientele might not and yeah, I'd still be out of pocket by £250.

Thank you both for your valuable feedback.