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rkaye
10-02-2008, 10:29 AM
Lets say I create a small run of my beverage and I talk to some stores and they agree to put it on their shelves.

Does the store owner by a case from me and they keep it whether it sells or not? Or do they expect to be able to return and get money back on unsold items?

Do they not pay me anything until the end of a certian time period (lets say a month) and then they pay me (essentially buying after the fact) after sales are calculated?

Maybe each scenario is different and negotiations dictate these things. But there must be a standard.

Can anyone enlighten me on how distribution/payment works?

greg
10-02-2008, 10:57 AM
Lets say I create a small run of my beverage and I talk to some stores and they agree to put it on their shelves.

Does the store owner by a case from me and they keep it whether it sells or not? Or do they expect to be able to return and get money back on unsold items?

Do they not pay me anything until the end of a certian time period (lets say a month) and then they pay me (essentially buying after the fact) after sales are calculated?

Maybe each scenario is different and negotiations dictate these things. But there must be a standard.

Can anyone enlighten me on how distribution/payment works?


You are right in that each scenario is different. Some guys sell product on consignment. Other sell it outright and once the cash exchanges hands the retailer owns the product for good.
It all depends on what you are selling. Usually a product with a short shelf life, such as fresh natural juice drinks, will be sold on consignment and then replenished the next week with good product. Sodas/Energy drinks/Alcohol has a longer shelf life and the retailer owns them once they are dropped off.