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.
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.
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.
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!
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!