Alan Miklofsky Consulting Website - Terms Margins and Policies that Earn Trust

TERMS, MARGINS, AND POLICIES THAT EARN TRUST INSTEAD OF SUSPICION

By Alan Miklofsky – December 2, 2025

You can have beautiful shoes, clever branding, and a sales rep who could sell air conditioners in Antarctica.

If your margins, terms, and policies feel fuzzy or one-sided, an independent comfort retailer will smile, nod, place a tiny test order, and quietly move on to the brands that treat them like adults.

This is the unglamorous part of the relationship. It is also the part that decides whether you get a second season.

WHAT RETAILERS REALLY MEAN BY “I NEED DECENT MARGINS”

When a retailer says they need margin, they are not being greedy. They are telling you, in polite language, “I have rent, payroll, freight, shrink, processing fees, markdowns, and the occasional economic surprise punching me in the face. Help me survive that.”

There are two margins in play:

Initial margin – this is the starting markup. If you wholesale at 70 and expect a 150 suggested retail, great, on paper that looks fine.

But if your big online partner is constantly selling at 119 with “free shipping” and promo codes raining from the sky, the “real” margin just evaporated for the independent.

Maintained margin – this is what matters. It is what they actually end up with after markdowns, coupons, clearance, and end-of-season cleanup.

If your channel behavior cuts the legs out from under maintained margin, independents remember. Your line gets reclassified as “too hard to make money on.” That is the kiss of death.

To earn trust:

· Be honest about where your product typically lands in the market.

· Do not pretend your DTC discount circus has no effect on their pricing power.

· Design price architecture that leaves room for real-world markdowns and still lets them make a living.

TERMS THAT HELP, NOT HANDCUFF

Dating and payment terms are not gifts. They are tools that decide whether a retailer can manage cash flow without needing blood pressure medication.

Good terms:

· Match the actual season – shipping Spring shoes in late February with Net 30 might be fine. Shipping them January 2 with Net 30 is how you end up getting paid before the snow melts and before the shoes sell. That is not partnership.

· Reward responsible behavior – early pay discounts for accounts that consistently pay on time? Great. Punishing long-term good customers for one rough season? Not great.

· Are simple enough to understand in 30 seconds – if your dating grid looks like advanced calculus, most independents will assume the worst and mentally round your offer down.

What retailers quietly resent:

· “Gotcha” terms that sound generous until they see the fine print.

· Short-dated invoices on late shipments.

· Constant one-off exceptions that make it impossible to know where they stand.

If your terms feel like a trap, buyers go defensive. When they go defensive, they stop writing aggressively and start trimming you back to “token presence” status.

FREIGHT: THE SILENT MARGIN KILLER

Freight is where a lot of brands casually destroy retailer profitability without realizing it.

A few principles that make you look like a grown-up brand:

· Set realistic free-freight thresholds – if the only way to hit free freight is to order four times what a store can sell, you are trying to solve your volume problem with their open-to-buy. They notice.

· Avoid nickel-and-diming on small fees – charging small handling fees on every shipment may look good in your P&L, but from the retailer’s side, it feels like being pecked by ducks.

· Be clear about who pays what, when – ship method, surcharges, re-ship policies on defects or mis-picks: spell it out and then stick to it.

A brand that treats freight as part of the total relationship, not just a cost to offload on the retailer, sends a blunt message: “We understand how tight this business is.” That buys enormous goodwill.

RETURNS, DEFECTS, AND WARRANTY: WHERE YOU PROVE YOUR CHARACTER

Nothing reveals your true nature like how you handle a bad pair of shoes.

From the retailer’s viewpoint, a defective shoe is not just a cost of goods problem. It is:

· A customer comeback.

· Staff time twice.

· Potential hit to reputation.

You win long-term if your policies:

· Make the customer feel taken care of – fast, clean replacement or credit so the retailer can say “We’ve got you” without hesitating.

· Do not require a forensic investigation on every pair – if they have to send pictures from three angles, fill out a form, and wait six weeks for a five-dollar credit, they will stop bothering. Then they will stop bothering with your brand.

· Are consistent – one answer from the rep, a different one from customer service, and a third from the portal is how you train retailers not to trust you.

You do not have to approve every edge-case claim. You do have to make the process feel fair, fast, and sane.

POLICIES THAT SMELL LIKE GAMES

Independent retailers have seen every trick. They may not call you out, but they know.

Red-flag behaviors that quietly kill your credibility:

· Big promises in the sell-in meeting that mysteriously vanish in the written policy.

· “One-time” exceptions that always seem to favor the big online or national accounts.

· Constant changes to programs mid-season.

· Promotions blasted out DTC that your retailers hear about from their own customers first.

Every time you ask a retailer to “understand, this is just for this one partner,” what they hear is, “We will throw you under the bus when it suits us.”

THE BRANDS THAT GET INVITED BACK

Brands that become trusted partners tend to share a pattern:

· They say what the real margin picture looks like and then behave in a way that protects it.

· Their terms help retailers manage cash flow instead of pushing risk downhill.

· Their freight and return policies are simple, predictable, and do not feel like a shell game.

· When something goes sideways, they own it quickly and fix it cleanly.

Do that across a couple of seasons and something interesting happens in the buyer’s mind. You move from “Let’s see if this works” to “We can build business with these people.”

They stop parsing every line of every program, and start asking better questions:

· “What else can we do with you?”

· “How do we grow this category together?”

That is when you are no longer just another vendor. You are a line they plan around.

And you did not get there with slogans or glossy sell sheets. You got there by making sure your margins, terms, and policies all say the same thing:

You can trust us with your money, your wall, and your customer.