Faire vs Traditional Wholesale: Commissions, Payments, & More

Faire's 60-Day Payment Terms

Faire offers eligible retailers 60-day net payment terms, double the typical 30-day terms in traditional wholesale. This extended payment window dramatically improves cash flow for retailers, allowing them to:

• • Receive and sell products before payment is due
• • Better manage seasonal inventory purchases
• • Test new products with less financial risk
• • Invest in growth without cash flow constraints

Faire Credit and Payment Processing

Faire handles all payment processing and credit risk, which means:

• • Brands get paid faster (even while retailers enjoy extended terms)
• • No need to run credit checks or manage collections
• • Reduced risk of non-payment or bad debt
• • Streamlined payment processing without manual invoicing

Traditional Wholesale Payment Challenges

Traditional wholesale typically involves:

• • Shorter payment terms (30 days or payment upon delivery)
• • Brands assuming all credit risk
• • Manual invoicing and payment tracking
• • Potential for payment delays or non-payment
• • Upfront payment requirements for new customers

This creates cash flow challenges for retailers and collection risks for brands.

How Faire Handles Invoice Collection

Faire takes full responsibility for collecting payments from retailers, which means:

• • Brands receive payment from Faire, not directly from retailers
• • Faire handles all follow-up communications with retailers about payment
• • No need to send invoices, payment reminders, or collection notices
• • Faire assumes the credit risk if a retailer doesn't pay
• • Brands get paid on time, regardless of when retailers pay Faire

Benefits for Brands

This eliminates significant administrative burden and financial risk:

• • No time spent chasing down late payments or sending reminders
• • No risk of bad debt or non-payment from retailers
• • Predictable cash flow with guaranteed payment from Faire
• • Focus on product and sales instead of collections
• • No need to run credit checks or evaluate retailer payment history

Why This Matters

In traditional wholesale, brands must assume all the risk and responsibility:

• • You're responsible for sending invoices and tracking payments
• • You must follow up when payments are late
• • You bear the full financial risk if a retailer doesn't pay
• • Late payments can create cash flow problems for your business
• • You may need to hire staff or use collection agencies for difficult accounts

With Faire, you never have to worry about any of this. Faire handles all payment collection, assumes all credit risk, and ensures you get paid on time. This means you can focus on growing your business instead of managing accounts receivable.

Traditional Wholesale Payment Collection Reality

In traditional wholesale, brands typically face:

• • Manual invoice creation and sending
• • Tracking payment due dates and following up on late payments
• • Dealing with payment disputes and collection issues
• • Risk of non-payment or bad debt
• • Time-consuming administrative work that takes away from sales

This creates significant administrative burden and financial risk that many brands underestimate when comparing Faire to traditional wholesale.

Growth Opportunities on Faire

Small retailers can grow faster on Faire because:

• ✓Access to unique products: Discover brands not available through traditional channels
• ✓Easy reordering: Streamlined process for restocking successful products
• ✓Data-driven decisions: Performance analytics to guide purchasing
• ✓Scalable relationships: Start small, grow as business grows

Real Retailer Success Story

"Before Faire, we couldn't afford trade shows and couldn't meet traditional wholesale minimums. We were stuck with limited suppliers. On Faire, we discovered unique brands, tested products with small orders, and our inventory turnover improved by 40%."

Faire Total Costs

• • Commission: 15% of order value (or 0% for Faire Direct)
• • Payment processing: 1.9-3.5% + $0.30 per order
• • New customer fees: $10 flat (NA) or 10% (international) on first orders
• • Upfront costs: $0 (no trade shows, no sales reps)
• • Return costs: Brands bear first-order return costs

Traditional Wholesale Total Costs

• • Distributor/rep fees: 20-40% of order value
• • Trade show costs: $5,000-$50,000+ annually
• • Sales rep costs: Salary, commission, travel expenses
• • Sample costs: Free samples for retailers
• • Credit risk: Potential bad debt and collection costs
• • Time investment: Relationship management, negotiations

💡 Cost Comparison Insight

While Faire's 15% commission may seem high, traditional wholesale often costs 20-25% when you factor in distributor fees, trade shows, sales reps, and other expenses. For many brands, especially those starting out or with limited capital, Faire's pay-only-on-sales model is more cost-effective than traditional wholesale's upfront investments.

Hybrid Strategy Examples:

• •Faire for discovery and growth: Use Faire to find new retailers, test markets, and handle smaller orders
• •Traditional for large accounts: Maintain traditional relationships for high-volume retailers who order $10K+
• •Faire Direct for existing customers: Bring traditional wholesale customers onto Faire via Faire Direct (0% commission) to streamline operations
• •Geographic split: Use Faire for international expansion, traditional for local/regional markets

Key Takeaways:

• ✓Faire offers superior payment flexibility (60-day terms) and free returns on first orders
• ✓Small retailers benefit significantly from Faire's lower barriers and flexible terms
• ✓Faire provides greater transparency with published pricing and clear terms
• ✓Traditional wholesale may be better for very large orders or highly customized products
• ✓Many brands successfully use both models in a hybrid approach