Saturday, 1 December 2007

Seller Beware

This was written for my art blog over here. However it applies here more than ever. If anyone has any questions feel free to leave a message and I'll be more than happy to answer them. I'm not a buyer anymore but still work in the industry. Rumors float about from company to company as "things" happen. Check out this blog for some interesting ripoffs from the company pursuing Etsians. (thanks to Jen for the link.)

There have been some interesting happenings in internet land. Someone from a large trendy retail and catalog chain has been emailing my fellow Etsians with a potential lucrative offer. The email sounds like a potential goldmine.

You know the old adage “If it sounds like it’s too good to be true?” I suspect that in this case it may be. As someone who has worked for a large international company as a buyer I can tell people a little bit about this process. Education is the key to making a deal like this successful for the prospective artisan. Buyers for large companies fall into 2 categories- those who are honest folks trying to do the right thing for the small artisans and those who will do anything to make their bonus at the end of the money. IN some cases companies pay their buyers based on the new product lines they bring in and how much money they make on those lines.

There are also people whose jobs are essentially there to bring in new lines or build into old lines- product line managers or some other unwieldy title. These people are the folks who are scouring the internet to find the next big thing. The big thing that’s going to get them the bonus, the raise and the better cube. These are the people to watch out for.

So say you get an offer from a big company, is it all crap? No at all but you need to be prepared. Large companies have at their disposal resources we can’t imagine. This also means if you send in a sample it can easily be sent to a manufacturing facility and millions of copies can be made in 6 months. How can you protect yourself?

First, if someone sends you an email be sure that it’s coming from a company email account IF it doesn’t come from a company account don’t trust it. Secondly head to the company website and get the number for their corporate offices. Ask to speak to that person, or for their extension. IF you get patched through it’s likely they work there. Ask the person answering the phone what the person does. Most secretaries will be pretty forth coming with this info. Explain why you’re asking. Ask for their title. Now ask to speak to Human Resources, particularly a specialist in recruitment. Ask HR for the job responsibilities of that title. HR should be pretty forth coming with this info- after if you are posing as a potential applicant they will tell you just about anything. Be polite and don’t be too aggressive- there’s another adage- more flies with honey than vinegar.

Say you get a product line manger rather than a buyer, be aware and careful with your next steps. These are the people in charge of making new lines and not necessarily concerned with your profit or product. Buyers are trying to bring in new product and not create new lines. It’s a fine line between the 2 but buyers are less likely to have the capability to send products to a manufacturer than a Product Line Manager. Buyers and Product Line Managers are essentially sales people, they were probably in sales before they got their position in an office. Sales people have one goal- to convince the person in front of them to do what they want- buy or sell. When talking to a buyer see if they will back up their claims with facts. Do they have information for you about payment, net pay, receiving etc?

The next step is to copyright your product. Don’t send anything to a large company without getting some sort of legal document stating the product and idea is yours. Consult with a lawyer if you need to. But Don’t let a company steal your idea because they are big. Let's say that again: Dont' send anything to a big company without a copy right, Copyright your product before you send it anywhere. Do not let the company bully you around.

The next thing or perhaps the very first thing for you to consider is the viability of you being able to make the quantity of product that the company needs. Can you make 1000 books to send out at the end of the month? Can you make and ship 1000 books in a month? IF not step back and think about sending stuff to the company. Once they have your product there is nothing saying that they couldn’t ship it off to a facility and have something like it made, cutting you right out of the loop. Most large companies use a net payment method. This means that you get paid a certain number of days AFTER the company receives your product. Common net payments are NET15 and NET30, the number after the net stands for the number of days after receipt your check is cut and mailed. 30 days can be a long time. Can you pay for the materials for 1000 books upfront? Can you afford to take a month off of your DayJob and not get paid for 15 or 30 days?

Another option is a licensing deal. They pay you for the right to make your product; a certain amount up front and you can walk away. I would suggest that you do this with a lawyer present to make sure that your terms are met and that you get what you want. When talking to large companies don’t be afraid to drop the line “I’m going to consult my lawyer and see what he/she has to say.” Whatever you do be smart and don’t let a company get away with stealing your ideas and products. Before you make any deal figure out the amount the company plans to make on YOUR product and your idea. Just because they are sending it to a facility to be manufactured doesn't mean they should pay you a pittance. Place a large value on your idea, design and product. DON'T LET THEM STEAL YOUR IDEAS. Your ideas are your products. IF your dealing with a big company they have money to spend, don't let them convince you otherwise, if they want it they will pay especially if they stand to make a good margin of profit on it.

There are valid opportunities out there that are potential goldmines for artists but you have to be aware of the sharks in the water and protect yourself. Be aware and cautious at all times.


Audra said...

Thanks for the great advice. It's good to keep a level head when dealing with the big boys.

risamay said...

Great advice. Thanks for posting!