Wholesale shop swap out procedure

Jewelry Discussion
1

I am relatively new to the wholesale world and a shop that purchased
several pieces of my jewelry last year would like to swap out the
remaining pieces they have (a few pairs of earrings and pendants) for
pieces from my new collection. I know that is customary in most
wholesale situations but I’m not sure how to handle it.

Should it be an even trade or should I “take off” a percentage of
the value when choosing what to exchange out with the owner?
Unfortunately this was not discussed at the beginning of my
relationship with this shop owner so I want to make sure that I go
into the situation prepared to do what is right. I so appreciate any
advice you can offer! Thanks!

Alaina

2

Hi Alaina

Its typical for “good” vendors to exchange things that don’t sell
after one year.

Instead of charging them a fee, many vendors will exchange “what you
paid for new stuff” BUT…

You have to buy twice as much.

They send back $1000, have to buy $2000

David Geller
www.jewelerprofit.com

3

Take the items back but charge them 15% “Restocking fee”. That’s
what I would do, especially if they have had them a while. Other
companies get away with it, why shouldn’t you?

Good luck,
Steve Cowan Arista Designs LLC

4

Hi Alaina,

I have a policy of swapping pieces if there are a few that are just
not moving (different designs sell better in different shops) or
there are just a few of an old collection left. I find that this
actually moves more product and keeps a good working relationship. I
do however have some stipulations… I charge 5% of the value of the
item or ( UKP 5 minimum) handling charge - stock taking and
recleaning items take time after all. and they have to reorder to the
value of at least twice as much as is being returned.

hope this helps
Annika

Annika Rutlin

5 
Take the items back but charge them 15% "Restocking fee". That's
what I would do, especially if they have had them a while. Other
companies get away with it, why shouldn't you?

I totally disagree if it is done within a reasonable time frame. I
think this is a win-win for both parties. Our best relationships with
people we do business with are with people who do trade out
merchandise that does not sell in trade for new stock. Some people
have requirements of a certain amount of new stock and take back a
percentage of that for trade out.

Some people allow total return for trade with no purchase, those are
long term relationships that we have established as buyers. I mean we
spent $$$.

I have had accounts that I sold inventory to and I allowed trade
backs. I certainly would not base my business model on a company that
“gets away with it”. Would not want to be them, or be like them.

If they were trading back something in gold, and gold had gone up
quite a bit, and they trade out for what they had bought it for
wholesale when the price was down, might work in your favor if you
can resell it to someone else at a higher price.

Richard Hart G.G.
Denver, Co.

6

Richard,

These items she’s talking about were purchased “last year”. Are you
going to tell me that you are willing to take back items purchased
last year, reclean, reinvintory, and retag at todays price, for
free???

I know Stuller Has a policy for reurns within 10 days:

"If you are not satisfied and need to return merchandise, we will
give you full credit, provided you follow these procedures:
[snip] 3.. Except for specific Stuller programs that make
provisions for merchandise ordered for review (i.e., Finished
Goods, Red Box Diamonds;, Black Box Gemstones; ), products cannot
be ordered for review. Such returns will be charged a 15%
restocking fee. A 15% restocking fee may also be charged for all
returns from customers who consistently abuse the return
privilege. 

4.. Refused, undeliverable, or unclaimed packages will be
charged a 10% handling fee, plus postage. 

5.. We regret that we cannot accept returns on books,
videotapes, or DVDs.

Why should she take this stuff back for free??? That’s rediculous!

7

They obvously want fresh stock but dont want to pay for their buying
mistakes and expect you to help them out financially. I would
suggest a 50% restocking charge after this period of time. As it
wasnt discussed then they are hardly in a position to claim that it
is unfair, you dont have to take anything back. If you think 50% is a
bit steep you should consider what the items are worth to you-if
they are worth more than half what you sold them for then offer a
bigger allowance (but ask yourself how much your time is worth to
yourself).

hope this helps you reach a decision

Nick Royall

8

An easy rule of thumb, and not just in business, is to treat people
as you wish to be treated.

I would happily replace what hasn’t sold and charge no fees or
penalties.

9

I agree with Richard,

I live in a suburban area, and many of the businesses have the
mentality that we are a community. So in that frame, of referance we
work together to offer many different choices to our clients. I do
not think that it would be in anyones best interest to get hard nosed
about it. After all if you do a show or show in an art gallery how
much do you wind up taking back anyway?

I have never “sold” to a shop it has always been on consignment.
After three months I gladly change out inventory. I would also
restock every two weeks. This keeps things fresh and new. Just MHO,

Aileen Parmenter
www.aileensart.com

10 
They send back $1000, have to buy $2000

Have to? Good luck with that.

11

They send back $1000, have to buy $2000

Have to? Good luck with that.

Some people are in business to move merchandise, so in replenishing
stock it might not be an issue to buy $2000, or $20,000.

Any jewelry retailer with any experience finds out the terms for
trade out before a purchase.

We had a gold and diamond company that would memo to us, we had to
purchase the inventory by the end of the memo period, which was a
year. They would trade out with a re-inventory, we paid the memo
monthly for what was sold and end of year trade out stock that did
not move as long as we took enough new inventory.

We basically got a long term loan for $30,000-40,000. Worked for us
for years.

I would not recommend this to others, but it worked for us. We were
invited every year to the JCK show every year with comp hotel
room…

There are a lot of different ways retailers can work with
wholesalers.

A little bit off topic, but if people are not experience in retail,
it might be wise to know that some wholesalers will give terms if
asked for 30, 60, 90 days. Write checks for the dates to be
deposited. We have done this over 22 years of retail with
success…and those times we could not cover the check, we called and
they waited till we told them it would clear.

Did anyone cash a check ahead of time, heck yea, were we hot about
it, yea! If it was someone we had worked with before and it was a
mistake we lived with it. If it was someone new, we never did
business with them again unless we could cover it at the time of the
purchase.

I am a bit surprised when people do not know the different ways this
business works. Perhaps that is why we have been here for 22 years,
and a lot of other people folded up their tent, and are working for
someone as an employee. Nothing wrong with that. I am just not quite
ready for that again, and I think the last time I did that I was in
my 30’s, and I am 65 in June.

Richard Hart G.G.
Denver, Co.

12

I think you should consider how much you sell to these people. Do you
want to lose them as a client. I would discuss this with them and
come to a solution that works for both of you. This would be what
will happen from now on. If that means you have to take the items
back then I would do so but if you aren’t happy with that then now
would be the time to decide what the terms for future sales would
be.

13 
Have to? Good luck with that.

Typical procedure in the retail jewelry world.

VERY GOOD vendors say
“Return a $1000, buy a $1000”

Then many say “Return $1000, buy $2000”

Think on the other side. if you’re a retailer buys $10,000 a year
from you, year after year and returns $3000 and you ask them to buy
$6000, they are still on track to buy another $4000. What’s the big
deal?

Its all about a win/win situation.

So are most of you allowing returns, charge a restocking fee and then
just give them a credit on their account to be used in the future?

David Geller
www.JewelerProfit.com

14

Steve,

These items she's talking about were purchased "last year". Are
you going to tell me that you are willing to take back items
purchased last year, reclean, reinvintory, and retag at todays
price, for free??? Why should she take this stuff back for free???
That's rediculous!

Don’t know about you, but I have more time due to the state of the
economy. Depending on the situation, I would and have taken stuff
back. Especially if someone is selling my work against having to find
another store that is the right fit for me and my work, that also
takes time. Hello?

Stuller used to take back without a restocking fee, and I have
returned goods after 8 or 9 months. I have been working with Stuller
for over 25 years, so their policy has changed over time.

Sometimes being flexible means you help yourself by helping someone
else, sometimes you just get taken advantage of…once…

Richard Hart G.G.
Denver, Co.

15

Thank you all for your responses! I know each artist tends to treat
this situation differently. It’s definitely in our best interest to
keep product moving and to ensure that new work is being displayed
to keep people interested (no one wants to see the same stuff over
and over again). And of course it’s good for furthering our
relationships with shops to be reasonable concerning trade-ins. It’s
just finding that right balance of making sure both of us are being
served well by our relationship that is key.

The pieces this store purchased are in sterling silver and the prices
of the sterling have gone up quite a bit (as we all know!). I’m sure
I could increase the price of the pieces they want to trade in and
resell them.

I think ensuring the amount being purchased is equal or greater than
the items being swapped out would be best. Perhaps giving the shop
the option of either placing an order equal to or greater than the
items being swapped out OR paying a 5% restocking fee would be a
good idea? What do you all think about giving the shop an either/or
option?

Alaina

16

Richard is exactly right. Take it back. We had tickets to go to
Florida to see my brother and a hurricane hit. We had nowhere to go,
but Delta refused to give our money back. We haven’t flown Delta for
about eight years now.

Dick Stromberg

17

One of my selling tools is I’ve always (for about 24 yrs) said to
possible wholesale customers…I have an open exchange policy…if
you think something doesn’t move as fast as you think it should I’m
always happy to exchange it. I also tell them I give a lifetime
craftsmanship policy. I’ve had verty few shops do this, but the
offer has always been there.

Sharon Perdasofpy

18

If neither party delves into the ‘terms of agreement’ deep enough
then there will be a surprise. It takes a number of surprises to get
it right, so take the surprises in good faith and move forward. Two
steps back is often three steps forward.

Alastair

19

Richard,

I agree that this economy is tough, but there comes a point where
one must try to make a profit and NOT give goods away, just to keep a
client. I have seen it happen for 23 yrs. and it becomes a situation
of the tail wagging the dog. Will not have it! Have seen it happen
more than once, and clients WILL take advantage of you! Customer
service is one thing but when it comes down to profit/ loss, I prefer
to make a profit. I’m sure you are not in this business to loose
money either. How many times do you take items back at a loss before
enough is enough.

Either set the standard NOW with this client or continue to let them
take advantage of your kindness. I guarantee that’s why Stuller
changed there policy, they were getting taken advantage of and it
became a matter of profit/ loss. Business 101. They aren’t the only
ones in our industry that charge a restocking fee.

20

I think this does also bring up the whole issue of policies. Whether
it is selling to a retail customer or a wholesale customer it will
serve you well to think of everything that could come up (payment,
returns, etc.) and put them in writing…give them to the customer.
If you sell retail and have a website put them on your website. If
you just have one store or gallery you may not think it is important,
but then when an issue comes up you will feel better it has been in
writing and you never know when there will be more stores/galleries.
Also you can always make exceptions but you at least have a place to
start. Now giving them the policies and their reading it are two very
different things…

Terry Binnion