I just received a really interesting business proposition, and I
would really like to hear some feedback before I create a contract
with this customer.
The background: Last summer, I sold a couple of pieces on Etsy. The
buyer was happy with the quality. She contacted me in the fall, and
asked for a small discount for buying multiples (3 each) of the same
pieces. I was sure she was reselling them, but I was fine with that.
I haven’t done wholesale, but I want to. I expected the discount to
be deeper than what she requested, so I was pleased. She was happy
with the pieces, and requested some more. She pays on time, and
seems comfortable to work with. I request 50% down before I begin
work, and expect the remainder to clear before I ship the completed
pieces. We have been using an informal email contract, in which I
specify terms, and she responds by agreeing. She has been great to
work with, and everything has gone smoothly.
The proposition: She recently requested that I create 2 new designs
to be sold to her at $150 and $50. She gave some very loose
parameters, leaving the designing completely up to me, so that I can
present designs I can afford to make at those prices. After she OKs
the designs, she will puchase 5 of each. She requires that these
designs be exclusive designs, to be sold only to her, and that is
where my concerns lie. I explained that I would prefer to retain the
rights to my own designs, although I don’t sell widely. She has been
very pleasant, but made it quite clear that without the exclusivity,
she could not use my designs.
I want to work with her, but I sense the need to be cautious about
how I continue. I will specify terms in a written contract, but
there are some issues to hash out first. Are there industry
standards or common practices that dictate a time limit on
exclusivity (eg 3 years form contract date) or that govern how much
a design needs to be changed before it is “different enough” to not
violate the exclusive nature of our contract? How much more
expensive should an exclusive design be? Also, I don’t know anything
about where/how she is re-selling my pieces. Are there issues I
should be concerned with?
Thanks for any thoughts/advice!