How do OEM contracts/accounts usually work?

[FAHooGolfs]

How do OEM contracts/accounts with retail stores usually work? Is it done on like a consignment basis or do they force you to buy what you think you'll sell, etc? How does that whole situation work?

[Gxgolfer]

If a major OEM "approves" your account, then it varies on the level of min purchasing. I think most want you to carry at least a million in a year. Some shaft manufacturers I have heard require a min buy of 20k of stocking inventory. There are lots of people who are on the business side here and probably have more accurate figures.

[RNF]

You own it. Very very few are on consignment. Those would be obscure/very young companies trying to get a foot in the door. Of course you can get terms, (3%, net 30) of course they vary. Most have minimum orders, again that varies. Sometimes you'll end up having to stock more than you want. The "little guy" can sometimes have a better chance if they join a buying group (if available). That can help get better terms and little to no minimums. That's why it's hard to find certain products like Ecco shoes, 64 pairs minimum. If your local shop carries Footjoy (64 pairs) and Ecco, they better have plenty of traffic looking for footwear.

 

Some small shops are at a disadvantage in that they do not have much, if any, upfront cash and cannot take advantage of the discounts. The discounts are necessary to make anything on your staples, like balls.

 

The retail biz is no picnic.

[ckay]

You own it. Very very few are on consignment. Those would be obscure/very young companies trying to get a foot in the door. Of course you can get terms, (3%, net 30) of course they vary. Most have minimum orders, again that varies. Sometimes you'll end up having to stock more than you want. The "little guy" can sometimes have a better chance if they join a buying group (if available). That can help get better terms and little to no minimums. That's why it's hard to find certain products like Ecco shoes, 64 pairs minimum. If your local shop carries Footjoy (64 pairs) and Ecco, they better have plenty of traffic looking for footwear.

 

Some small shops are at a disadvantage in that they do not have much, if any, upfront cash and cannot take advantage of the discounts. The discounts are necessary to make anything on your staples, like balls.

 

The retail biz is no picnic.

I've seen in the application that one must be a member of the PGA or a certified clubmaker. Is that a mandatory requirement? We just closed on a golf range and are looking into stocking Titleist, TM, and Cally....mostly gloves and balls, and some equipment depending on what the minimum is.