Forums: Discussions for entrepreneurs and small business.

Hello! My name is Chris and I am new here.
I recently started offering my products wholesale and some retailers are asking for zip code protection. They want to be the only ones to carry my products in their areas. While I find this flattering, I`m not sure how to handle it. My husband is against it. He feels it goes against America`s free enterprise. (He is not involved in my company by the way.) I`m on the fence about it. If I did offer it, the retailer would have to purchase a certain amount from me per quarter to keep protection. I don`t really know what to use as a starting number however.
Any insight is greatly appreciated! Thanks so much!

Chris,

Exclusive territories is nothing new - used in many businesses. I don`t think you can pull a number out of a hat. Questions like: What is this market segment worth in this area? What kind of numbers does the retailer asking for the exclusive rights think they can turn for your product? And you`re right, they would have to meet their quota each quarter (or other time period you choose) to keep exclusive rights.

Just the fact some retailers are asking for exclusive rights is a good indicator they can produce. It has been my experience that you want to go with the "big dog" in each specific territory when giving exclusive rights. Why? Because they probably have a track record of producing sales. This is the kind of partners you look for and want - IMHO. Most businesses that ask for an exclusive know they will perform and know if they don`t, they lose the line. They are not accustomed to losing.

Try it in some markets. Work with these folks. Let them know you are there to support them in this exclusive deal and see if they can produce. My experience says they will produce and as they grow, you`ll grow. Plus, these type of partnerships bring great communication between both parties. If they are the leader in their market, they will probably provide you excellent feedback and maybe even ideas for new products or blends.

The starting number needs to one that you work out together with this partner - make them feel like a partner and I believe you`ll find that number quickly. If you can live with it and they can too, it`s a win-win.

R@

PS - Welcome to the SuN Fun Club

PSS - just reviewed your website - love it! The names of your dips are wonderful and very creative. I think you have a winner here.

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Richard Arnold · Key Concept Writers · Business Communication: The "Key" To Success· Law of Attraction Blog · Life Ain`t Brain Surgery Blog

Thanks R@,

These are small country stores so I`m not really sure what to ask of them in sales and it`s hard to tell what they could do sales-wise. Your reply makes a lot of sense though. It`s very helpful. Thank you so much!

Chris,

I don`t know what kind of volume you are seeking or what you can handle, but this item would probably work well in places like Cracker Barrel (I`m assuming CB has made its way up north), William-Sonoma, World Market, places like this. But maybe you`re not thinking that big yet - I think you should. There`s a lot of markets for your products - IMHO.

R@

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Richard Arnold · Key Concept Writers · Business Communication: The "Key" To Success· Law of Attraction Blog · Life Ain`t Brain Surgery Blog

Thank you! Actually, I started my business about 1 1/2 years ago when pregnant with my 2nd son. I had only planned on selling my products at craft shows and farmer`s markets and online - just to bring in some much needed money into the house. We couldn`t afford for me to not work, and we couldn`t afford day care either. It`s hard to sell retail here in NH though. I realized that recently, so I started offering my products wholesale just about a month ago and I have already secured 16 accounts without even advertising it! They are finding me online and I`m getting orders daily. I had to hire a sitter so I could work and we got an equity loan and remodeled our basement into an office and dedicated kitchen for my business (perfect timing). I also hired a friend part time to help me out with packaging the dips. I need to figure out my next step, which means I`ll need to possibly move the business out of my home and hire some employees, as well as take on some big accounts like Cracker Barrel and the others you mentioned. It`s scary to me considering I never really planned for my business to take off beyond just myself. But it`s got legs and it`s running full speed and I can`t let it fail - so I have to move ahead with it. I have to work past my fears and learn as much as I possibly can to avoid as many mistakes as I can. That`s why forums like this are such a Godsend!

Chris - great story - made my day!

If you want to do it, you can do it. Yes, growing fast can drain you - just think the Boy Scout motto .... "Be Prepared."

And don`t think you have to do it all. Your products are the kind of products that many rep agencies can handle. They have the contacts with the established retailers to get your product in front of the buyers. No need for you to spend your time and going through the learning curve on this - well worth the percent cut to hire reps as a part of your sales organization. But I`m getting ahead of myself. Be Prepared - as I said earlier. Worst thing to happen would be to have those big orders coming in and not be able to fulfill them. Many a vendor has lost a Home Depot, Wal-Mart, or other huge retail account (I am not pro-Big Box) because they couldn`t deliver on time. That`s all that scares me about your growth - but you`ll figure it out.

You go girl!

R@

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Richard Arnold · Key Concept Writers · Business Communication: The "Key" To Success· Law of Attraction Blog · Life Ain`t Brain Surgery Blog

Thanks for the pep talk. I`m glad you think my biz has a lot of potential. I`m doing my best to be prepared like you said. I think I also need to find a mentor of some sort. Sometimes I just feel so overwhelmed. It would really help to have someone guide me a bit. Someone who has been through this.

Have great week and thanks again!