Landing a wholesale deal with a retailer or stockist can be an exciting milestone for a fashion brand. However, without a well-negotiated agreement, what seems like a great opportunity can quickly turn into a financial and operational nightmare.

Independent designers often overlook key contract terms that protect their business, leading to unexpected costs, late payments, and unsustainable markdowns. The key to a successful wholesale partnership is negotiating fair terms upfront and ensuring your wholesale agreement is clear, enforceable, and aligned with your brand’s long-term strategy.

This article provides practical tips for negotiating retailer agreements, covering essential clauses, negotiation tactics, and common pitfalls to avoid.

Step 1: Understand the Key Terms in Wholesale Agreements

Before negotiating, familiarize yourself with the most important wholesale contract clauses to protect your brand’s interests.

1. Minimum Order Quantities (MOQs)

Retailers typically require brands to meet specific MOQs per style or per season.

✔ Why It’s Important:

• Ensures the retailer is serious about stocking your brand.

• Helps you plan production costs and avoid deadstock.

• Prevents retailers from placing tiny, unprofitable orders.

✔ How to Negotiate:

• Start with a lower MOQ for first-time buyers and scale up based on reorder success.

• Offer tiered pricing (e.g., higher discounts for larger order volumes).

2. Payment Terms: Net 30 vs. Upfront Payments

Payment terms define when and how retailers will pay you.

✔ Common Payment Terms:

| Term | What It Means | Risk for Brands |
| --- | --- | --- |
| Net 30/60/90 | Retailer pays 30, 60, or 90 days after delivery | Late payments can strain cash flow |
| Upfront Payment | Full or partial payment before shipping | Lower risk but harder to negotiate |
| Consignment | Retailer only pays if the product sells | High risk—inventory sits unpaid

✔ How to Negotiate:

• Start with Net 30 but ask for a deposit upfront (e.g., 30-50%).

• For small boutiques, request payment upon order placement to reduce risk.

• Charge late fees if payments aren’t received within the agreed timeframe.

3. Markdown Allowances & Discounting Policies

Markdown allowances determine who absorbs the cost of discounted items if a retailer doesn’t sell them at full price.

✔ Why It’s Important:

• Prevents retailers from over-discounting your products at your expense.

• Helps brands maintain control over perceived brand value.

✔ How to Negotiate:

• Limit markdown allowances to a fixed percentage (e.g., 10-15%).

• Require retailers to notify you before marking down products.

• Offer buyback options instead of unlimited markdown allowances.

4. Returns & Chargebacks

Some retailers expect brands to accept returns for unsold inventory or issue chargebacks for product defects.

✔ How to Protect Your Brand:

• Reject returns unless for damaged items (or offer an exchange for slow-moving stock).

• Clearly define acceptable reasons for chargebacks to prevent abuse.

• Include a dispute resolution process in case of disagreements.

5. Territory Exclusivity: Who Can Sell Your Brand?

Territory exclusivity clauses define where and how a retailer can sell your products.

Common Terms:

| Exclusivity Type | What It Means |
| --- | --- |
| Regional Exclusivity | Retailer is the only stockist in a specific area |
| Online Exclusivity | Retailer is the only e-commerce seller for your brand |
| Product Exclusivity | Retailer gets an exclusive collection not available elsewhere

✔How to Negotiate:

• Offer limited exclusivity (e.g., 6-12 months) instead of open-ended agreements.

• If granting regional exclusivity, require higher MOQs to justify lost opportunities.

Checklist: Clauses to Never Overlook in a Retailer Agreement

• Minimum Order Quantities (MOQs) & Order Commitments

• Payment Terms (Net 30, Deposits, or Upfront Payment Requirements)

• Markdown Allowance Limits & Discount Approval Process

• Returns & Chargeback Policies

• Territory Exclusivity (If applicable)

• Intellectual Property & Branding Control

• Contract Termination & Dispute Resolution Clauses

Final Thoughts: How to Secure Fair Retailer Terms

• Be Clear & Specific: Put everything in writing—verbal agreements mean nothing in wholesale.

• Protect Your Margins: Don’t accept pricing that makes your business unprofitable.

• Start Small & Scale: Begin with limited MOQs and flexible terms before committing to larger retailers.

A well-negotiated wholesale agreement ensures both parties benefit—retailers get high-quality products, and brands maintain profitability and brand integrity.