Jim and his team had verbally accepted their distributor’s price offering. A few weeks later they got the written contract. There were a few surprises.
Jim reviewed the contract. The price matched the verbal offer, but the product was to be purchased on consignment. Jim wondered “What would happen if we increase inventory and sales don’t follow on?” The distributor requested what looked to be expensive packaging changes. Suddenly the pricing didn’t seem quite as generous. Committing to a price for several years seemed risky.
Jim set up a meeting. The distributor stood firm on the price. “We can renegotiate when we renew. This is generous by industry standards” “One last thing” the distributor said. “Don’t go crazy on the web and social media. If my retailers think they can’t win against you, they won’t order the product.”
Jim decided to sign. After all, he thought, our goal is to sell through retail. Now, all we have to do is to make the product and send it to the distributor. The big retailer was still talking and those sales would be on top of the distributor’s.
It wasn’t going to be as easy as he thought.
Comentarios