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Tuesday, November 23, 2010

A Big Step...Backward

My very first wholesale college bookstore customer, whom I shall call Appalachia U. or AU for short, has dealt a severe blow to my business plan (not to mention my ego).  Having ordered nearly $700 worth of products a little over a year ago,AU has returned its unsold merchandise and asked for a refund, $216.  Ouch.

It wouldn't be so painful if I hadn't worked so hard to fill their order.  AU had ordered 3 and 5 of items that I had exactly 1 of and I really scrambled to piece some of those items together.  It was a lot of long days.

Still, I'm grateful to AU for giving it the good old college try, I really am.  And I didn't have to give a refund; I have a generous exchange policy and nowhere do I say I'll buy back unsold items.  This incident forced me to think about what kind of business I want to have, and what kind of customer service I want to provide.  I decided I'd prefer to be a Nordstrom and try to give superior customer service, even at some cost.  It's a business model I can live with and I believe it will be profitable in the long run.

That said, I've made some changes to try to avoid similar issues in the future.  First, my ordering instructions will hopefully prevent customers from ordering more quantities than I can easily fill.  Second, I state that I will not buy back unsold items (although, actually, I will).  Third, and most important, I've significantly changed some of my construction processes and materials and my product today is far superior to what I was making a year ago.

The silver lining on all this is that I now have some additional inventory; inventory that will need to be reworked, to be sure, but that's easier than starting from scratch.  I really like some of the items I received back and I think I can sell them again.

It's not exactly how I wanted to end the year...but that's show business.

1 comment:

  1. I am so sorry to hear about this, but it does make you stop and think about what to do in a situation like this. I personally have done a few wholesale orders. My first was where the "new company" hyped me up to have hundreds of items on hand, and sell to them at 50% off, which I remember mass producing for a month....then after a few sales, needless to say I was stuck with a huge on hand stock that I'm still trying to get rid of after they went out of business as quickly as they came in.

    So now, I do wholesale orders where there's a lower minimum order, no refunds and free gift with purchase. This way, they can't get a refund and won't have to worry about too much unsold stock.

    xoxoxo hang in there