Industry sector: Retail and wholesale

Lingerie shop: Payments to creditors

You are likely to buy your stock from a variety of different suppliers - some of these will offer you a period of credit and some will insist that you pay for the items when you order them. When you owe your suppliers money, they become your creditors until you pay them. Enter in your cash flow forecast the payments you will make to your creditors (including VAT) in the months in which you will pay them.

You are likely to be buying from:

  • wholesalers, distributors and importers
  • lingerie manufacturers of the mainstream brands
  • local and national lingerie designers/manufacturers for exclusive ranges

You might also place orders at trade fairs and exhibitions.

The Lingerie Journal website includes a searchable wholesale directory of suppliers to the lingerie retailing sector. The UK Fashion and Textile Association (UKFT) 'Let's Make it Here' website includes a searchable database of clothing manufacturers including lingerie, corsetry and swimwear. These resources may help you to source stock for your outlet.

Setting up an account

For convenience it is best to set up accounts with your main suppliers. To do this you may be asked to provide bank and trade references. Until the account facility has been granted you will have to pay for your order at the time you place it. This is known as paying on a pro forma basis.

Once your account has been set up you will be invoiced at regular intervals and expected to pay within a certain number of days of receiving the invoice.

Discounts from suppliers

You may be offered, or be able to negotiate, various discounts from your suppliers. Examples include:

  • early settlement discounts
  • retrospective rebates
  • volume discounts

Some suppliers may also offer items such as free display stands, help with promotions and so on. These are likely to be related to the amount of business you put their way.

In some cases suppliers may impose minimum order conditions - either volume or value - and charge for delivery.