Wholesale Hair Extension Payments, Invoices and Order Changes

PLUCHARM / PROFESSIONAL BUYING GUIDE

Payment terms in the hair trade are where a good supplier relationship either
becomes workable or starts costing you. The terms themselves are negotiable and
vary with volume and history. What should not vary is clarity — you should know
before you order what you pay, when you pay it, and what the paperwork will
contain.

The terms you will be offered, and what they mean

• Payment before dispatch. The supplier carries no risk and you
  carry all of it. Common on a first order, and reasonable there; less so once you
  have an order history.
• Deposit plus balance. A percentage up front, the remainder on
  production completion or on shipping. Standard for production runs, because the
  supplier has committed materials to your specification.
• Terms on account. Payment after delivery, typically 30 days.
  Earned by order history rather than requested on a first order.
• Letter of credit. Used on larger international orders where
  both parties want the bank to carry the risk.

Two things worth knowing whatever the structure: what happens to a deposit if
you cancel a production run, and whether a deposit is refundable at all. Get those
in writing before you pay, not after.

What a wholesale invoice should contain

An invoice that cannot be reconciled is a customs delay waiting to happen. A
usable wholesale invoice states:

• Supplier name and address, and buyer name and address.
• Invoice number and date.
• Per line: method, specification, shade reference, length, quantity, unit
  price, line total.
• Currency, and the total.
• Freight charge shown separately from goods value.
• Incoterms, or an explicit statement of who pays freight, duty and insurance.
• Country of origin.
• Net and gross weight.
• Payment terms and due date.

Freight shown separately matters commercially, not just administratively:
customs valuation generally turns on goods value, and a bundled price obscures
that. It also lets you audit freight against the agreed ladder.

Incoterms, in plain terms

The four you will meet most often:

• EXW (ex works) — goods are yours at the factory. You arrange
  and pay collection, freight, duty and insurance. Cheapest on the invoice, most
  work for you.
• FOB (free on board) — the supplier gets the goods to the port
  of departure. You pay the sea or air leg and everything after.
• CIF (cost, insurance and freight) — the supplier pays freight
  and insurance to your port. You pay duty and onward delivery.
• DDP (delivered duty paid) — the supplier delivers to your
  address with duty paid. Simplest for you, and the supplier will price the risk in.

An unclear Incoterm is the most common cause of an unexpected duty bill. If it
is not stated, ask before you pay.

Currency and the exchange rate

If you are invoiced in a currency other than the one you sell in, the rate on
the invoice date is part of your cost, not a detail. On a large order a few
percent of movement wipes out the discount you negotiated. Ask which rate applies
— the invoice date, the payment date or a fixed rate agreed at order — and price
your own margin accordingly.

Deposits, cancellations and changes

On a production run, the deposit exists because the materials are committed to
your specification. So the questions to settle in writing are:

• Can the specification be changed after the deposit is paid, and at what cost?
• What happens if the run is cancelled mid-production?
• Is the deposit credited against the final invoice or additional?
• How are partial shipments invoiced — per shipment or on the whole order?

On partial shipments specifically: ask whether freight is charged per
consignment or apportioned. Charging the first band again for each split shipment
is a real cost, and it is avoidable if it is agreed up front.

Keeping the paper trail

Keep the quotation, the written specification, the approved sample record, the
proforma invoice and the final invoice together. When a batch is disputed, the
approved specification and sample record are what the conversation is actually
about — and if they were never written down, the conversation becomes an
argument.

What this means when you order

Payment terms are negotiable with volume and history; clarity is not. Know the Incoterm, the freight basis and the cancellation rule before you pay. Wholesale hair extensions sets out the thirteen methods we manufacture, the trade terms and the lead time for each. If you already know you want your own brand on the pack, start with private label hair extensions.

Frequently asked

What payment terms should I expect on a first order?

Payment before dispatch is common and reasonable on a first order with a new supplier. Terms on account are usually earned through order history rather than negotiated up front.

Should freight be on the invoice?

Yes, shown separately from goods value. It keeps customs valuation clean, lets you audit freight against the agreed basis, and makes quotes comparable between suppliers.

What is the most common cause of an unexpected duty bill?

An unstated or unclear Incoterm. If the quote does not say who pays duty, ask before you pay – the answer changes the landed cost materially.

How should split shipments be invoiced?

Agree it in advance. Freight charged per consignment rather than apportioned across the order can mean paying the first band more than once.