[Jewelry making - Article 00432] - Re: [Orchid] Wholesale order dilemma

[Kennedy]

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Rodney,

    I don't know what you should do, but here is a caution. Some large
    retailers play a very nasty game. Let's say you make widgets. Large
    retailer comes to you and says "I'll buy all my widgets from you."
    (or a huge order, much larger than you currently produce.) You
    dedicate capital and time and stop servicing other buyers. (since
    large retailer sucks up all your attention) The 2nd year the large
    retailer says "I'm still going to buy all my widgets from you, but
    you are going to sell them to me for X each." (X turns out to be a
    very slim margin.) You are now between a rock and a hard place. You
    invested money in equipment and you have stopped servicing other
    buyers. So if you don't sell the widgets to the large retailer you
    have a bank breathing down your neck for repaying equipment costs and
    no steady customers. On the other hand, you are not making much money
    selling the widgets to the large retailer. 

    Ikea handles this by guarrenteeing that they will buy so much each
    year for a 5 year period. (so the manufacture can modernize and
    recoup their cost.) 

    Maybe it would be good to sell them the design. Either a flat fee or
    a royalty on each one or a combination of the two. You show them how
    to make it etc. 

    Just suggestions; I don't know what you should do. It sounds like a
    beautiful ring. 

Sincerely,
Jim Kennedy
(not a jewler, my wife is)
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