Forums: Discussions for entrepreneurs and small business.

For whatever my two cents is worth, if you want to sell wholesale, your web site should send your customers to the retailers you sell to.  You need to let your retailers know they are getting leads from you when you do.  You need to be aggressive to get keep your resellers selling.  When you sell direct and wholesale at the same time, your retailers feel like they are competing with you and they will be less likely to promote your products.  Any time someone can buy directly from the manufacture, there is a good chance they will pay more to buy direct than take a chance on a reseller.  Most large retailers know this.  Especially with a product like yours that people might be afraid of warrantee and other issues.

 

If your resellers are not moving your products and you cannot get them motivated, then make the decision whether selling direct is a better idea.  If this is the case, forget about wholesale and move to being more flexible in price.

 

I feel that trying to be in the middle of the road for your type of product will yield in lower overall sales.

 

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

Bert-- Will offering exclusive rights (to thier territories) help reassuring our retailer`s concern or worries?

I am not sure.  You are already being sold by national retailers on the web which will upset local retailers.  If you get into say, Lowe’s and offer exclusive rights, they are nationwide and that makes it more complicated for your local retailers again.  You might offer selling to just Lowe’s over Home Depot or the other way around though.  But if you do, don’t give them exclusivity over your local retailers.  I would be careful with offering exclusive rights and make sure there is performance guarantees over a specific time frame.  Exclusivity is something that can bite you in the tail too if you are not real careful.

What about new home builders and home remodeling companies?

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...

It works this way. Our products got into Costco, Home Depot and Wal-Mart. It is done by a middle man business (thru OEM) Thus, we have no connection with those stores. This business model lasted a couple of years in harmony. As the sauna manufacturing factories started to expand in China, our client started to significantly cut our profit margins, large amount payment delays and etc. So, we decide to become our own middle man, opened our office and warehouse in America. Yet, we wont sell any models (about 6-8) that are designed only for them.

At the moment, we are trying to advertise our own brand name "saunaking", when we pick up our number of retailers, certainly that would enable us to slow down or stop retailing.

We attended a kitchen and bathroom show in Las Vegas called the K. Biz show, and got some leads from there. Porbably, need to attend a lot more.

We havent got the right fit outside sale person yet to develop relationship with new home builders and home remodeling companies. working on it...

Exclusive territory rights will not give comfort to national retailers. You probably have unique products at Costco, Home Depot and Wal-Mart. These are three different channels so there should not too many issues here. If you get Lowes or Sam`s Club, it will be a different story as you will then have two players in the same arena. Bert is bang-on with his comments.

Even though you are going through OEM, you DO have a connection with your retail customers. Who provides the after sales service and support? Their QC department will probably want to tour your facility? Do you brand the products sold to these retailers?

Will you be going direct to the national retailers now or is there still a relationship with the distributor? If the OEM product is not branded SaunaKing, you can propose two lines - the OEM and a premium SaunaKing line.

 

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A good idea is a good idea NOW![sup]TM[/sup]

ethnicomm inc. | sales | marketing | web | strategy consulting

For the OEM part, our distributor provides the after sales service, since they have their own engineer and technician team. They ued to be manufacture. We do provide parts though. The products sold to our retailors are OEM with their logo on.

We plan to go directly to the national retailers. At thins point we still have relationship with our distributors since we are not strong enough to stand up on our own yet, matter of fact, way from being able to get into big box retailers. Not knowing how those supply chain works, plus new to the online market, make us a little lost

Are the parts branded SaunaKing?

If you go direct, you will destroy your relationship with the distributors. You might want to propose that they act as your branded product distributor as well - negotiate a reduced rate and have them help you grow your brand.

This will allow you to learn more about the supply chain and how things like returns are handled.

I would seriously think about what role your online business will play in future.


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A good idea is a good idea NOW![sup]TM[/sup]

ethnicomm inc. | sales | marketing | web | strategy consulting

I agree with everything that`s been said so far. Those are all valid points. Going after the mass market/big box retailers takes a lot of thought, planning and patience. When the time comes that you are in front of a buyer he or she will usually expect you to have all the answers right then and there, so pay attention to what`s been said (in the previous posts) and think about how you`d answer those questions when put on the spot.

Good luck.
RF

SaunaKing is the video clip at your home page your company or your supplier?

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Bert at Harvey Software, Inc.
Multi-Carrier Shipping Software and Supply Chain Solutions for Internet Retailers

Also a provider of free shipping information and resources at Harvey Software`s Parcel Shipping Blog along with free tracking solutions at TrackingPage.com...