With brand‑name home‑textile franchise stores springing up everywhere, large department stores and shopping malls have become hotly contested venues where home‑textile brands vie for prime locations. Yet, the stringent terms and conditions imposed by these major retailers often place significant pressure on shop‑in‑shop operators. Consequently, conducting a thorough analysis of the mall’s policies and requirements before entering is essential. By understanding both the strengths and weaknesses of the other party and devising a strategic response, businesses can maximize benefits, sidestep potential pitfalls, and achieve their desired negotiation outcomes.

Price terms

　　(1) When a retail outlet is unable to secure a nationwide pricing agreement, it often settles for a second-best approach: first negotiating favorable supplier pricing within a specific region, then gradually expanding to secure a national supply price. The company should establish a unified national supply price and rigorously review the store‑level agreements signed by each regional branch; maintaining stable, consistent pricing is of paramount importance.

　　(2) In addition to securing favorable pricing, retailers will also seek price discounts based on order quantities. While maintaining a uniform pricing policy, the company can selectively apply this provision to encourage retailers to procure more non‑standard‑specification products, thereby avoiding other requirements such as unconditional rebates.

　　(3) When supplier product prices change, retailers typically stipulate that suppliers must notify the retailer of such price adjustments at least 30 to 60 days in advance. The primary purpose is to safeguard purchase prices and mitigate the risk of price increases by suppliers.

Cashback Terms

　　(1) Retailers often stipulate in contracts that tenant brands must pay an unconditional rebate equal to a certain percentage of their annual invoiced sales, intended to bolster gross margins. Brand‑name home‑textile tenants should strive to avoid this rebate by negotiating conditional terms for each phase of payment, thereby gaining greater control over their sales strategy.

　　(2) Conditional rebates represent another approach whereby retailers leverage their own sales growth to secure margin support from brand‑name home‑textile suppliers. This arrangement benefits the suppliers and helps reinforce the retailer’s commitment to and emphasis on the product line.

Fee Terms

　　(1) Retailers typically leverage their sales channel advantages to encourage tenant merchants to pay product‑related fees, such as new supplier onboarding account opening fees, new product launch fees, and individual item barcode fees.

　　(2) Retail outlets often allocate substantial sponsorship‑related expenses to subsidize gross margins. These include new‑store launch fees, holiday‑promotion costs, store‑anniversary expenses, refurbishment charges for existing stores, and funds for special events. Home‑textile brands should strive to avoid such expenditures, as they are not directly tied to product sales. Suppliers should endeavor to convert these costs into promotion‑focused spending that is closely aligned with sales, thereby driving revenue growth.

　　(3) The marketplace provides business insights to tenant brands through its fee‑based services. Home textile brand tenants should leverage this platform to gain a clear understanding of their products’ average sales volume, sales cycles, peak demand periods, and their relative strengths and weaknesses compared with similar offerings. By assessing their position within the marketplace, these brands can better exert influence and secure more favorable support.

Promotional expenses

　　(1) The store‑specific fees for each promotional activity, such as end‑cap fees, DM advertising costs, and shelf‑end fees, which are typically tiered by period. This is particularly common in stores that adopt a decentralized management model.

　　(2) For home‑textile brands entering the marketplace, promotional expenses should account for at least 70%–80% of the total contract value. Such expenditures create favorable conditions for product competition, enable participation in market contests, and help boost sales volumes.

Logistics Treaty

　　(1) It is necessary to follow up on the store’s accepted order‑quantity terms, which can help reduce shipping costs and ensure a steady supply of products for smooth sales.

　　(2) Retailers that operate distribution centers typically charge suppliers a percentage of their annual sales as a delivery subsidy. Companies should estimate the delivery costs for direct shipments to individual stores versus direct deliveries to the distribution center, taking into account the store network’s geographic distribution, historical sales volumes, order frequency, and the company’s own logistics costs. The subsidy rate should be set within the range that balances these two cost structures.

　　(3) Inventory is a key factor influencing store operating costs, and they aim to mitigate inventory risk by offering unconditional returns.

Payment Terms

　　(1) For home‑textile brands, the receivables from the retailer constitute the retailer’s payables; consequently, the two parties have opposing payment terms. Typically, the retailer specifies a fixed payment period—e.g., “X days from the date the retailer receives the supplier’s invoice”—within which it must make payment.

　　(2) Home‑textile brands entering the marketplace should encourage retailers to accept payment discounts and shorten their payment terms. At the same time, they must closely monitor the retailers’ accounts‑receivable reconciliation process, regularly compile records of overdue payments, and promptly file complaints.

　　(3) To reduce cash outflows and ensure the collection of fees promised by tenant brands, shopping malls typically deduct various contractual charges directly from receivables. Given the long payment terms and the complexity of contract‑related fees, accounting discrepancies can easily arise. Moreover, if erroneous deductions are not promptly identified and corrected through reconciliation, they can become irreversible losses. Home‑textile brand tenants should proactively propose effective measures to ensure that all agreed‑upon fees are remitted to the mall accurately and on time.