Before You Sign That Order, Read This

By: Tom Shay

From: IGC Retailer, March/April, 2013

Before You Sign That Order, Read This
Have you ever received an order that came differently than expected? How about an order that was delivered later in the season than you specified? Make sure you're proactive at the beginning of transactions, spelling out your expectations to the vendor, to avoid these sorts of challenges. Consider these tips as well before you place your next order:

Specify the ship and cancellation dates. On the order form, explicitly state when the order is to be shipped with phrasing such as "ship as of May 1, 2013" and "cancel order if not shipped by April 30, 2013."

Specify "ship only complete." While the above instructions will get the merchandise to you within a specified time, it doesn't solve the issue of partial shipments. The "ship complete" note says it is "all or nothing."

Take pictures of displays. Take a picture with your smartphone of the vendor's display at the trade show, and attach it to the order. This not only gives you a photo backup in case you have to show the vendor what you were expecting, it helps you remember what you saw and assists the person assembling the display in your garden center.

Keep copies of the vendor's sales brochures. This is backup information of what was offered at the trade show. Keep in mind, the offering, pricing and terms at one trade show may be different from another show.

Note the sales representative's name. Sometimes the sales rep is not an employee of the vendor or even an independent sales rep; he is hired as sales support for the trade show. Note the person's name you speak with at the show in case you have an issue with the order.

Next to the quantity, specify the units. You wouldn't be the first person to have placed an order thinking you ordered 10 items but the order received was 10 dozen.

Extend the order at cost. When you total the order at cost, this is an additional method of checking the quantity ordered. Again, it can eliminate that same type of order miscalculation mentioned previously.

Specify the shipping terms. The freight begins with the term "FOB," which is an acronym for "free on board." A notation will follow "FOB," which is the point the vendor is paying shipping up to. "FOB factory" means your business is paying the freight. "FOB destination" means the vendor is paying the freight bill to your door.

If your garden center has any responsibility for paying the freight bill, you should have input. Hopefully, the manufacturer is seeking the least expensive way of shipping, but to make sure, print on the order form "ship cheapest."

Push for terms. You don't get terms unless you ask for them; not all terms are "net 30." Understand the language of terms. In addition to "FOB" and "net 30," there is a multitude of variations. "Net 30x" means 60 days as the "x" next to the number doubles the number. "ROG" stands for "receipt of goods," and means the dating terms don't start until the merchandise has been received. "EOM" stands for "end of month," meaning the dating terms don't begin until the end of the month.

Look at the back of the order form. Before you sign the vendor's order form, look at the fine print on the back. If you don't understand the terms, don't use the form. A simple solution to avoid potential challenges is to create your own order form with terms that are fair to you.

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