Do major retailers and wholesalers require Sale or Return agreements, and what impact does SOR have on cash flow and invoice factoring?

Not all major retailers insist on Sale or Return, though some wholesalers do. Members report mixed experiences.

**SOR prevalence and negotiation:** - Several members have successfully avoided SOR terms with major retailers (Waitrose, Three Spirit) by maintaining smaller volumes that don't pose significant inventory risk to the retailer. - Some wholesalers insist on SOR "as a rule" but members note there's often limited commercial rationale beyond the wholesaler's desire to avoid being left with unsold stock. - When volumes are small, SOR hasn't caused major problems for members who've accepted it.

**Cash flow and factoring impact:** - **SOR agreements create significant cash flow friction when factoring invoices.** Members who factor for working capital have explicitly avoided SOR terms because they "mess things up" — factoring houses typically won't purchase invoices under SOR terms since the debt isn't legally settled. - One member reported that under SOR terms, wholesalers can delay payment indefinitely by claiming prior invoices' stock hasn't fully sold, creating frustration on smaller volumes and potentially serious issues at scale.

**Alternative approaches:** - Rather than accept SOR, members suggest exploring alternative distribution channels (Drinks Supermarket, C&Carry, other wholesalers) if a primary wholesaler demands it, reducing the pressure to capitulate to unfavourable terms.

**Key caveat:** SOR becomes a real problem only at meaningful volumes. Small listings (e.g. "a case a week") are manageable under SOR but scaling up while locked into SOR could create serious cash flow strain.