setting up agreement with supplier

[rfid]

I remember when my husband and I attended the SOL workshop last year the main speaker was Jim Anderson and he mentioned a website he had success with which started by his visiting with an acquaintance who made? or designed? special coffee cups and he made some sort of deal with this person whereby he would design a website for them at no expense to this person and market their products on the site and take a certain share of the profits or margin for doing this and it was easily tracked because the orders came through the site.
Has anyone on the forum been in this type of situation and could you give me any advice on how to set this up.
I am visiting with a lady who makes machine knitted items and I viewed her items at a craft show yesterday and she does very nice work so I told her I would do some research on the salability of the items and see if we would want to pursue this idea.
Any help or advice will be appreciated.
Thanks,

[Matt]

Hi Laura,
Unless you want to involve a lawyer, I'd make it as easy, plain and simple as possible.
1. She produces something special, which she sells at shows, private etc, she invests her time in creating and selling her items and but no idea how to sell it online.
2. You have a store and the expertise to sell it for her online and you spend the time in research, advertising, maintenance, paying for your store etc.
3. Find out, what items she can make in a timely manner and which ones are available, as you are the one, who will be held responsible to the customer.
4. When you sell something for her, she can produce more and has to spend less time in selling it.
5. Talk to her and either make an agreement, that you get the item at a fixed price, which should be way cheaper, as she would ask for, if she'd sell it.
6. Either you buy a bunch from her and sell it afterwards - advantage -> you might get more out of it, your profit might be higher - disadvantage - you spend money and might not be able to sell it all, so you'd lose some.
7. Whatever agreement you make with her, consider the worst case scenario - so more complicated it is - so more $$$ you'd have to spend to be successfull at court.

We deal with 2 companies, representing them in the USA - with both we have a gentlemens agreement and a basic contract. The gentlemens agreement is in many cases more realistic as a bunch of words, signatures and fees involved and there are still people around, who take that kind of ageement way more serious, than anything else.
I would try to get to know her as good as possible and check if her items are at a constant quality, is she reliable and how does she handle complaints etc.

As an example, some years ago, I wanted to buy a car, saw the price at the dealership and made a counter offer - after some back and forth - we shook hands - before he got the papers, he told us, he got a call from the manager, telling him he can't sell it at that price - so we left.
Next day, I called the owner of the dealership, told him about the handshake and the witnesses - I got the car for even $ 250.- less - as he knew, that the handshake is as much worth (in Texas) as a written contract and he had no doubt, I'd raise h***
Good Luck :-)!

[Bethers]

My art store is similar to what you'd be doing. I have contracts with the artists. When someone orders, I pay the artist the agreed upon price for the product - they ready it and ship it out direct. We have agreed upon all prices, including shipping in advance. So, it works much the same for me as dropshipping would.

If she wants her OWN presence on the web, they I suggest you talk to her about building her a website for a fee - and a cost for maintaining it.

Both ways are viable. But the first method also has some other advantages - as your site/store - you can add other peoples products that might compliment those.

If you go with the first method - be very aware that this is an individual - and if she decides she doesn't feel like knitting - and you have orders - you won't have product. So make sure you feel comfortable with her and that she'll stand up for her end of the bargain.

[rfid]

Thanks a bunch for the replies and advice. Have you heard of anyone working a percentage in a situation like this?

[Bethers]

Percentage or flat cost - either one works and isn't unusual.