Working with Wholesalers - Being Asked For Photo of Storefront

[marinazar]

I am opening a business in a VERY competitive and secretive industry similar to the Masonic. Cloth Diapers. Yep, you read that correctly. High level: Due to groups forming under the guise of being a retail business, ordering product then using for personal use, has caused manufacturers to create many, many loops for a retailer to jump through. Having licenses and documentation makes zero difference.

So here is my question: What other industries ask for a retailer to submit a photo of their sign and storefront before they will release wholesale pricing & guidelines? Some wholesalers in my industry will even want a copy of a signed lease.

I have pushed back and now wonder if this may be standard practice.

Thanks in advance.

[vangogh]

I wasn't aware any asked for that information. I suppose I can see them wanting to know about your business. If you're selling their product, then your business can affect their brand. It does seem like a strange request prior to sending out pricing and guidelines, but maybe it's not as strange as it sounds.

The way you're describing things it does sound like it is industry practice. Even if it isn't you may not have a choice if you want to work with this wholesaler.

[Pack-Secure]

It sounds to me like they had problems in the past and want to protect their brand name.

[Steve B]

Why would you push back?

[Harold Mansfield]

I had no idea there was a cloth diaper cartel. But if this is the way people commonly do business with them, I don't see where you have a choice.

As far as examples of other businesses that want to see so much information? Franchises. They come in all shapes and sizes and they definitely want quality control over how their brand is represented.

I'll give a specific example, you rarely see Hallmark cards in crappy corner stores, flea markets and such. They obviously have quality control over where their product is sold.

[KristineS]

I've heard of this practice, but never encountered it. The company I work for is in the garment decoration industry and we have agreements with suppliers to avoid encroaching on other markets, so we request tax i.d. numbers and things like that. If your industry is competitive, I'm not surprised that supplier companies are researching those companies with which they do business quite thoroughly.

[Wozcreative]

I work with print wholesalers and to prove that I am a designer (in the trade), and have a running business, I had to prove that my business exists. This is just one way of them asking for proof.

[marinazar]

After doing some research, the "storefront photo" seems to have developed in the crafters and kitchen-table businesses (WAHM, Working At Home Moms and SAHM, Stay At Home Moms) and appears to be fairly customary. However, this really has only occurred when submitting wholesale applications with the largest brands and many are now beginning to drop this requirement and only asking for the legal documentation (i.e. Tax ID, Resellers ID, web presence, etc.)

To Pack-Secure: Yes, as stated in the OP, many groups calling themselves "co-ops" created businesses under the guise of being a retail/online or B&M, ordered product for personal use only. I even legally changed the tagline to my original company name from Co-op to Collective due to being turned down over and over again. It's unfortunate because a co-op here in Seattle is a very positive endeavor but to my industry it is negative. I want to work with the brands to change this.

Steve B, I pushed back for few reasons. One, the fact that I have paid and worked hard for the legal documentation and felt it was being dismissed. Two, I can photoshop an image of a storefront which proves that the process of this one item can be manipulated and is broken. By highlighting this one fact to a large brand they agreed that its a broken process and we are working together to develop a more professional process.

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Three, a few bad apples should not bring down the entire application process; and finally, four, I need to have REAL numbers in my financial projections and I can only do that by having the wholesale pricing (or even COG formula) now not when I am about to open my doors.

Thanks for the replies everyone. This forum is truly helpful to me.

[vangogh]

Good for you on the research. I think I understand more now why you don't want to just give in and I do understand wanting real numbers before rather than later. It sounds like you're making some progress in developing a better process. Does this mean you think you'll be able to get the numbers you need?

[nealrm]

This sounds to me to be a "You must be kidding". I can understand franchises wanting to maintain quality control, but to jump through hoops to prove you are a business to purchase a product, you must be kidding. Do all the manufactures in the markets truly do this, or just the ones you are dealing with? How about overseas manufactures? How much can people save on cloth diapers to make it worth getting a FIN to purchase them directly from the manufacturer. If they are willing to do that much work why would the manufacture care? Is the resale markup that much!?!.

I would check around and see if all the manufactures treat their customers that why.