Clarkston’s Sarah Broyd Speaks to Retail Payments for Beauty Brands
August 14, 2024 | Clarkston Consulting’s Sarah Broyd, partner and health and beauty industry expert, was recently featured by Beauty Independent for her thoughts on retail payments for beauty brands. She advises brands to consider a multitude of factors when trying to mitigate the payment risk associated with retail, including stricter payment terms and contractual controls, alternative inventory models and risk mitigation strategies. Read Sarah’s featured quotes below and the full article here.
How Emerging Beauty Brands Can Mitigate Payment Risks At Retail
“There’s this price pressure that companies are trying to balance now. Labor’s more expensive, supply chains are more expensive, and so companies are starting to look at cutting budgets and cutting spend where they can. But retail overall is down and when that happens you start to see delinquent payments or requests to stretch payment terms.”
“If a retailer has less risk tolerance, the percentage could go down and then things like order size and previous relationships could impact the percent as well.”
“Small vendors might not think to do some of these things.”
“The thing that you have to be really careful about when you do consignment is making sure you get really accurate reporting and timely payment for the sold goods.”
“For smaller businesses, or those with higher risk factors, the percentage would be closer to the high end,” she explains. “It may represent a significant expense but helps reduce the risk of non-payment from customers, including retailers, especially if a brand is more single threaded into a large retailer who could have a significant impact on their receivables.”
“Outside of these things, you are then basically left waiting for them to pay you.”