As a small business owner, you probably dream about getting your products on the shelves of some of the country’s most popular big-box stores. Although signing a supplier agreement with Walmart could help you sustain tremendous growth, it isn’t something you should rush into haphazardly. Here are some things to keep in mind before signing on the dotted line.
1. Is Your Company Ready?
Supplying nationwide big box stores is a completely different animal compared to supplying smaller local stores. The requirements will be much greater and the time constraints on your company much tighter. With these types of demands, will you be able to guarantee supply and quality? If you’re not ready to handle that type of volume, you could encounter legal problems when you fail to meet your requirements in the contract. In addition, this type of failure will make it much harder for you to get this type of opportunity when your company is actually ready.
2. Do You Really Understand the Agreement?
Large suppliers often ask you to sign very large and complicated contracts. No matter how excited you are about the opportunity, it is very important that you read the contract entirely first. You should also get help from an advisor and lawyer before making a decision. Some companies may ask you to buy back unsold merchandise. Could you afford to do that? Also look at their payment terms. While some companies may agree to Net 30, others may have much longer terms.
3. Research as Much as You Can
As a small business, you do not have the extensive market research team. Still, you need to do some type research before signing a large supplier agreement. Find out as much as you can about the company you are supplying, where they are located, and what types of people make up their customer base. You want to choose a partner who has customers who would like your product. Otherwise, you could be entering into a very unsuccessful agreement that will make it harder for you to find the right opportunity later.