The ambiguity of Vendor price tiers is one of the main reasons The Designers Collaborative (TDC) exists and thrives. Being granted the best price tier is hard to obtain as a small business, and harder to keep year after year. We share our collaborative knowledge here on price tiers as we strive to offer the best pricing to our Members while remaining as transparent as possible.
Each Vendor has different account requirements for opening orders or buy-ins and annual purchasing volumes to maintain the best price tier.
Additionally, many Vendors leave the decision to their Sales Representative on whether to grant the best price tier to an account applicant. Vendor Sales Reps may be allowed to “bend the rules” and grant the best pricing without the required opening order. Sales Reps usually don’t grant every account applicant the best pricing, there is a lot they consider beforehand: other accounts in your area (market saturation or competition) and what those accounts may offer the Trade like access to the product in their showroom, for example.
Some Vendors and Sales Reps require the applicant to have a showroom, buy $X amount of product, and showcase that product on the showroom floor before granting an account.
Vendor Sales Reps may be employees of the Vendor (representing ONLY that Vendor, with annual sales quotas to meet), or they may be an independent contractor (representing MANY Vendors and dependent upon the commissions they make from Vendor sales for their income).
For these reasons and lack of Vendor price tier uniformity, it is challenging to define pricing tiers. We will do our best. Keep in mind there are always exceptions to the rules.
PRICING TIER TERMS
Designer Net – most common discount that is offered by retailers and wholesalers (for example: your local Trade Showroom or Design Center) also called “Trade Pricing” or “To-The-Trade.” The discount may vary greatly from 5% to 30% off the retail prices. Your price with this discount can be the same as what is offered by online re-sellers like Wayfair, and may be similar to iMAP pricing (iMAP or similar means “Internet Minimum Advertised Price”). Be aware and do your homework.
Wholesale – less common discount that is offered by the Vendor directly also sometimes called “Trade Pricing” or “To-The-Trade.” The discount usually means 50% off the retail price.
*NOTE – nearly ALL fabric and wallpaper Vendors offer wholesale (50% off retail) pricing to the Trade and one price tier UNTIL the account reaches $50,000 (may vary) a year in sales. Then, one may qualify for an additional discount of 10%, 15% or 20%. There are exceptions. For example, one Vendor requires investment in their fabric or wallpaper books to achieve the best pricing tier.
Stocking Dealer – rare and may be the best price tier achievable directly with the Vendor. The discount usually means 60% (or greater) off the retail price. This pricing tier is granted with a big opening order and high annual purchasing volume ($30K or higher).
Uniquely-Named Price Tiers – there are plenty of uniquely-named price tiers, but they function similar to the above. For example, “Emerald” pricing tier is used instead of Designer Net; “Sapphire” pricing tier is used instead of Wholesale; and “Diamond” pricing tier is used instead of Stocking Dealer. One Vendor has no opening order requirement with SEVEN pricing tiers based on annual purchasing volume.
Container or Volume – the best price tier achievable directly with the Vendor when a container full of product is purchased. The discount usually means greater than 70% off the retail price. A standard container is a 40’ long x 8’ high x 8’ wide jam-packed with products (853+ cubic feet); the same container you see truckers or 18-wheelers toting behind them and what is transported on trains and ships. Many big-box stores purchase at this price tier.
OPENING AN ACCOUNT WITH A VENDOR
The standard process for opening an account with a Vendor is fairly straightforward. Many Vendors may share an account application on their website to complete. Others may require you to connect with their Sales Rep to discuss opening an account (that means the decision to open an account is in the hands of the Sales Rep).
The application will ask for basic information, who you Bank with, how long you’ve been in business, how much business you do annually, and a Trade Reference. The Vendor will usually not charge sales tax on your purchases so you will be required to submit your State-issued Sales Tax Exemption Certificate or Re-Sale Certificate.
When you talk with the Sales Rep or the Vendor about opening an account ASK THESE QUESTIONS:
“What are your price tiers?”
“What is the opening order requirement for your best price tier?”
“What is the annual volume required for your best price tier?”
*NOTE – Vendors and Sales Reps like to know who they are doing business with. Opening Accounts while at High Point Furniture Market or other Trade Shows can make for a smoother process. By attending, you show your professionalism with your investment of time and money and showing up!
If you are looking to hit the easy button and get access to hundreds of vendors at the BEST pricing then join The Designers Collaborative! Members have over 300 vendors at the best pricing tiers for amazing creative freedom and maximum profits. Join us now: https://thedesignerscollaborative.com/join-tdc/
