Why We Charge A Restocking Fee

First I need to define what kind of business Safety Technology is. Safety Technology, for over 30 years, has been a wholesaler. In 2000 we started drop shipping for our distributors. This was a service we provided but our business model is still a wholesaler.

Because we drop ship, some distributors are a little spoiled. They don’t touch the product, don’t have to worry about stocking the product or shipping the product. That is all done for them.

The problem comes when a customer of a distributor decides they don’t want the product and want to send it back. There are two choices at this point. The customer can send it back to the distributor, who they bought it from, or they can send it back to us. However, if they send it back to us, we will take it, but we charge a restocking fee.

We don’t require our distributors to place minimum orders but our return policy is the same whether they buy in bulk from us or have us drop ship. As a wholesaler, we do not do consignment. Consignment is when a product is given to sell without payment and you get your money when the product is sold. If we gave full refunds for non-defective products that are returned to, it would be the same as selling on consignment.

In any business transaction there is assumption of risk. On both sides. Our side is bringing in and paying upfront for all the products we want to sell, not knowing if they will sell or not. Trust me, if I bring in a product and it does not sell, I can’t return it for a refund. Your risk is the same one, just a smaller one. We’ve even removed most of the risk for you. You don’t have to buy anything from us until a customer buys from you. So, the risk you have is whether the product will be returned.

If it is, we’ve even removed much of that risk. You can return the product to us but there will be a restocking fee. Remember, you don’t have to return it to us. You can keep it and sell it to another customer. But, if you don’t want to do that, if you don’t want to assume that risk, we will take it back and charge a restocking fee.

Its hard to understand a business unless you’ve done it. I wouldn’t wish being a wholesaler on anyone. Small profits, importing issues, all kinds of troubles with manufacturers, having to pay for most things upfront then wait 3-4 months before you receive the product so you can sell and hopefully recoup your investment. If I had to do it all over again, not sure I would. But here I am and here I will stay, trying to run the business the best I can, making as many concessions I can for my distributors, but sometimes having to make decisions not popular.

I hope you have a better understanding of why we charge a restocking fee.