Recently I made the decision to walk away from a wholesale order after working for several months to build the relationship. It was a potential new stockist opening a retail outlet here in the Highlands. It sounded like a really exciting space and I was genuinely interested in working with them. As I always do, I asked questions. I am careful about where products are stocked and I do not want to place them too close to existing stockists.
They were very interested in the products. Being relatively local and using botanicals fitted in with what they were planning. It felt, at least at the beginning, as though our businesses were aligned.
They asked for samples of the products they were interested in stocking. I do not generally send out samples as it is expensive, especially when a full range is requested, but on this occasion I agreed. Looking back, I would probably have asked for payment upfront, redeemable against a first order, but I did not. I sent the samples and they came back to say they liked them and were planning to place an order. Initially they talked about ordering quite large quantities, which I can accommodate as I do have the ability to scale up production, even though everything is still made by me. Also, I keep good stocks at the start of the season and let these stocks tail off for the Winter, as most of my customers are tourist driven businesses.
After a pause, I followed up and they came back with an order. It was smaller than first suggested but still a good order. Earlier on they had asked for guidance on what sells well, so I had given them a clear idea of which products tend to work best. The order they came back with did not quite reflect that. For example, they chose only two soap varieties when I offer five for wholesale, and the choices of other products did not quite sit together in a way that felt like a natural retail range. Of course, it is their shop and their choice, so I moved forward and asked where to send the invoice.
At that point I was passed to someone else to discuss pricing and logistics. That immediately raised a concern as they had already been given full pricing, together with my terms and conditions, and we had been in discussion for some time. I was then asked to provide a discount. My wholesale prices are already set at the lowest point that allows the business to work. These are handmade products and there is no margin to reduce further. They also asked for credit terms, which I do not offer. Everything I buy to make the products is paid for upfront. Soap also needs to be made well in advance, so cash flow is important to keep the process going. There were also questions around returns. I do not work on a sale or return basis and cannot take back unsold products. I explained all of this clearly.
They came back and said they would go ahead with the order, but that next time they would expect to negotiate pricing and have more favourable terms. At that point I made the decision to step away. I had also offered to deliver the first order in person as they were close enough to do that. Instead I was given a delivery address that was not a retail outlet. It was an unmanned premises where I would need to call ahead to have gates opened. It did not feel like a straightforward arrangement. By the end of it, the whole situation did not feel right. If I had taken that order, I would have been concerned about the next one and the continued pressure to reduce prices further, which I cannot do.
I make everything myself in Scotland. I harvest botanicals by hand and work in small batches. Ingredients are bought in smaller quantities and everything is paid for upfront. This is not bulk manufacturing, although I can scale production when needed. Everything is still made by me and it has to work in a way that is sustainable.
At the moment there are other wholesale enquiries coming in and I will work with those who understand how the products are made and respect that this is an artisan process.
For me, it is important that any wholesale relationship works on both sides and feels sustainable going forward.
