April 15, 2008.
To sign contracts or not sign contracts, now that is a good question. I have signed many a contract in my day and no I am not an attorney, or an expert - these are just a few things that have worked for me. Some business owners believe that contracts are bad, and that they are all controlling, you'll sign your life away, etc. I think they are good - they protect you, and the company you are going to work with. Getting it in writing is a good thing, for everyone, and for the record, ALL contracts are up for negotiation.....ALL of them.
Never assume that this contract is the one to die by and that you must sign and agree to all that the company is asking. I have found that almost everything is up for debate, especially if you can state your case clearly (read without emotion). If I find a section of a contract is ridiculous....er, I mean I disagree with it I will argue my case with facts, not emotinal out bursts.
I think with any contract you will want to sit on it for awhile, chew on it if you will. I found that what sounded assinine and ass-back crazy when I first read, sometimes made sense after a few deep breaths and um a drink or two (kidding, no really drinking and signing contracts is a baaad idea). Responding to an email or a contract for that matter in the "heat of the moment" never ends well.....I think I might have touched on this before. Here are a couple "sticky" sections of contracts I have run into:
This tends to get everyone all riled up and frothing at the mouth at the mere suggestions of exclusive designs. Artists and authors alike tend to run for the hills at the mere mention of this, and I have been known to do the same. Some contracts will demand that you create exclusive designs only to be sold in their store. At first this sounds terrible, awful, you would never want to let them do this.....or maybe? What if you were to create 5 exclusive designs? Or just two to try out the channel? Could you create two designs - maybe just adjust the color on two of your best-sellers, that you know will sell well. Can you negotiate some sort of exclusive arrangment with your product line? Or one product?
I suggest you consider this as a possible "good thing" before giving them the hand and screaming NO (again, I may have done this). Exclusive designs can mean a number of things, so ask questions. How long do they own the designs? Are they paying for them? Can you re-work one of your old designs (psst, get out that best seller)? What kind of coverage, PR or marketing will they do for your "exclusive creations"? Will they give you credit, list you as the artist? Could they license your art for a year to use on their product? Could this get your products seen by millions of eyes in tons of stores?
I work with large companies and I have done, and will continue to do exclusives. I also have been paid to do them, and sometimes I have not been paid. You may want to look at the big picture, the long term investment and the possible partnership for years to come. For the record, I have also said no to some exclusive designs. This is strictly a personal decision, and I know some artists are adamant about not doing this - for me I feel, heck I am creative I can think of something else to do.
Now....if we are taking exclusivity, like their website/catalog/physical store has ALL your products and you can NOT sell them anywhere else. Or better yet you can not sell them direct, not even list them on your own personal site.....uh ya that would be a NO. This is a bad idea, a bad business decision and an overall losing situation for you. I would never agree to this, and you can quote me on this. If this were in a wholesale agreement I was signing I would strike this and say I refuse this, no matter what the circumstance was. I have been asked to do this and I refused - in most cases (all but one website) they were okay with this.
This "All or Nothing" contract is put in place to intimidate new artisans and to try and lock them into a contract that they can not break. Even some sales representatives have been known to try this manuever.......it just reeks of intimidation. I would not trust a company that did this. I would give them the benefit of the doubt, say no and wait and see - let them be the one to explain this.
Mistakes, Bloops & Blunders
Some contracts have strict guidelines and requirements for fixing errors, and they may assume the worst of us artisans. If you run into some sort of crazy demand, just state your case, and don't agree to it - because you will make a mistake some day.
There will be mistakes, sometimes by me, sometimes by the customer and sometimes the sales channel that sold our product. I would like to think (and brag) that we never make mistakes - we ussually catch them before they go out the door.....but sometimes we do screw up. When we do make a mistake, we first apologize, next we make it a priority to get it done ASAP and out the door. We do not believe in charging for this - it was our mistake, and we need to make it right. And....if the customer needs it by a certain day, then by golly we ship it two day or overnight and eat the cost. I believe good customer service is really important - especially these days.
Now, let's just say that the customer or the channel made the mistake, and want us to replace it. We will try and get it out quickly, and we will be understanding and sympathetic. However, they will pay for the replacement, they will pay for shipping, drop shipping - we will not eat the costs for the "wrong" product (note this is why we put this in our wholesale documents). This is not negotiable, most of our products are personalized - and we can not re-use your son's birth certifcate with the name Nebulon Zolar (you think I am kidding, we did get a Nebulon!).
In some rare instances it is both our faults, a mis-communication, or just a big times "OOPS!". We work with the channel or the customer to make sure we are both happy with the outcome. We can split the cost, we can let them pay for shipping, or work out an agreement. I never try and blame the customer, I too have made mistakes when ordering gifts - and if we made an error to boot - it just feels better to "work" with them and move on. We have even had breakage (I know shocking since all our products are ceramic) and had to file a claim with our carrier. Again, we need to get paid, and get a new product to customer.
Can You Include a Brochure?
Some companies ask that we include some literature or invoices with the products we drop-ship. We consider any addtions to our packaged product "kitting". Kitting can include any of the following things; sticker on box, post card in with order, gift message, invoice included or even gift wrapping. Some channels ask us to put their name on the return address even. These things are all fine by me - it is branding for their company. I seriously don't mind it one bit. I think this is good business, and shows that this company (that is selling your products) know how to market their company to the consumer, market your products - they know how to get the next sale.
Some artisans balk at this, they even flat out refuse to do it. I don't know why. It really only takes a small amount of time to ensure the customer knows where they purchased the product. And, hopefully if they like it they will go back their and buy your product again.
However, as easy going as we are about kitting we will not do everything asked of us.I do not allow the boutique to claim they created it, or put a sticker on my product saying where it was purchased. When I was a "newbie" I was not minding this as much - I just wanted sales. Now I feel that they can and should get the sale at the end of the day - but give me some credit as the artisan who made it. We have spent our money on branding, PR, marketing, heck key words alone.....give me the credit I deserve.
The End of the Day
I believe it all boils down to how you want to run your business and whether you want to work with large companies. Everything in life has a trade off, and if working with larger companies means giving up some of freedom - so be it. I am willing to do it, I actually prefer the larger companies because they are ussually established, flush with cash, get PR, have marketing and advertising dollars and ussually pay on time. You may enjoy working with the customer direct, or small boutiques, or craft fairs - just what you want to do with your time.
Not every contract is cut and dry, good or bad, black and white. Some contracts you will have to really question, read thorougly and even have an attorney review before signing. I would like to think that I have always (ya right!) made well thought out decisisions. Just don't assume the contract is non-negotiable, and to quote my husband, "You don't know the answer until you ask the question."