Since this sauce video went live, I've actually been trying to figure out the logistics of this deal.
This PDF seems to summarize how DIBs work. Per how I'm reading it, they'll pay him the agreed cost + 2% 90 days after it gets delivered to them, and they have full right of return.
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Can someone smarter than me explain this? Assuming I'm not incorrect, they're just going to stock his shit sauces for 80 days, then return anything that doesn't sell since it won't be profitable to carry.
Interesting note is that he needed at least $2 million in product liability insurance. On top of him paying out of pocket for sauce production (unless he managed to get payment terms from his vendor), that couldn't have been cheap. Maybe it's provided by the sauce manufacturer though. Too bad Jack doesn't use a qualified Sauce Wholesaler to handle it for him, it would allow the farms a lot more insight into the operations.