Forums: Discussions for entrepreneurs and small business.

hey all,

need some input on a wholesale question at tradeshows.

after 3 years of r&d and a couple of soft starts at direct sales at consumer
shows and odd referrals here and there my wife and I are getting ready
for our first big trade show with our product.

We both have some experience in sales and I have been travelling doing
home shows and such for a few years selling a $4-7000 product, but I`ve
never done wholesale deals and have sketchy ideas on how they work.

We have created pricing for up to 3 of our units, which is our minimum
order, and up to 20. As an extra insentive we are offering an introductory
10% off on all first orders.

As a new company we can`t really "carry" the paper on an order, in other
words we won`t do COD or ship anything without full payment.

How do we avoid these problems in an intelligent way without closing
doors?

What are we looking for in a serious discussion about someone buying
our product in quantity?

We are set up for accepting credit cards and such and are implementing
invoicing etc.

Any feedback is appreciated and I`m interested in hearing about any
experiences good or bad in this area.

It`s funny or ironic to me that even with a load of knowledge in so many
other areas when faced with this new mystery I feel like "I ain`t done been
learned up right".

I am grateful for SuN and all the great insights, looking forward any
suggestions you all might have, blessings,

Tim,

Who or what type of businesses are in your wholesale target market? How much "off retail" is the pricing structure you created that you spoke about?

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

Hi
I see your customers dividing up into 2 groups. The small 3 units at a time buyers and the larger quantity buyers.
The small guys can use credit cards and i think you have that all figured out.
I believe the larger buyers will mainly be catalogs. With a larger company don`t expect to `close a sale` at the show. The buyers at the trade show are there to see what`s new and bring the information back to the nest. The buyers will need to convince others at a budget meeting that you`re worth going with. They will also be concerned with your ability to supply the product on time. Once the catalog is sent to the printer, that`s it.

There is also a vendor agreement that will eventually be presented to you. (that`s a good thing) You don`t want to be signing one of those at a trade show. The average amount of time you will spend with a multi-million $ company is about 3 minutes. They fly in and fly out on the same day and are on the floor for about 2-3 hours. The buyer of 3 will talk to you for 30 minutes.

You should know the answer to "will you drop-ship?"

Cash: I would really avoid saying "payment in full" if you can avoid it for now. My gut tells me this is not going to work, but I have no real proof of that. If you get a P.O. from a major catalog then factoring may save the day. Never used it, but there are some great articles on this site. Try to learn about it ahead of time.
Drop-shipping may also lessen the cash crunch, and at the same time get your product out there in front of other potential retailers.

Try to relax at the show, and try to schedule a few hours to see the city you`re visiting.
Jeff

Tim,

I`m a Promoter for a Bead and Jewelry Show. I do 44 week-end shows a year in various locations around the US.

The key to your success is Location and Presentation.

Review the floorplan of the location and see where you are being placed. Paying a few dollars more for a prime location ( near the door but not the first one customers see when they enter) is worth the money.

Place incondescent lighting ( 3 per table at 120 watts per light) to highlight your merchandise.

Have a ton of business cards and brochures.

A TV monitor showing a "loop" demonstration of your product and, of course, your product so you can give live demonstrations.

Finally, bring your best smile and a mile of patience.

Good luck and if you have anymore questions, let me know.

 

 

Mike

-------------------------

Please visit my websites:

stayalertseminars.com

My book "Stay Alert, Stay Alive" can be purchased at:
www.amazon.com

One way to present the concept that you need full payment, at least to the smaller buyer, is to tell them that all new accounts are required to pre-pay on their first order.  Explain that once you have developed a satisfactory relationship you may be able to extend terms on re-orders.

At least that way you can get the cashflow started.  Re-invest profits into product so that you can at least move to a COD basis quickly.

Large volume orders are a different story.  You may be able to set some sort of terms.  It could be 50% with the order and balance on delivery.  But many will want to pay 30-90 days after delivery. 

All of this is negotiable and sometimes just being honest with the buyer about being a bootstrap start-up may result in some front money from them, especially if they really like the product and see a long relationship ahead.

If you have a good relationship with your bank you could possibly borrow against purchase orders.

Do you actually manufacture the units yourself or do you contract it out?  If you contract, perhaps the manufacturer may extend credit based on valid purchase orders.  If you are doing it yourself you might be able to work a deal with your parts and materials suppliers.

There is one tradeshow marketing technique that I have used for at least getting my brochures into peoples hands.  Many booths will have a bowl of candy to draw people to the table.  I would spend a bit more for TootsieRollPops and tape each one of them to a brochure.  That way the "grazers" would at least get my marketing materials instead of just a free snack. 

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Ignorance is bliss. No one told me it was impossible so I went ahead and did it anyway.

I may be misreading your post; my apologies if I`m preaching to the choir. 

I`ve done tradeshows for a number of years, albeit not in your market.  I get more out of these shows today than I did when I first started out because I`ve realized a very important thing:  Tradeshows are not about closing business.   Sure, it might happen - I`ve had it happen myself - that you close business during a show.  But, if you go to a show with the idea of closing business, you`ll be missing out on what a tradeshow really offers -- the chance to make contacts now that you can turn into new business later. 

When my mindset was closing business, I spent so much time trying to find and engage `hot prospects`, that I gave short shrift to those who were `just looking` or `possibly interested`.  Result: few closed deals and few contacts made.  When I realized that I was doing myself a disservice by concentrating on `hot prospects` and began instead to engage all comers, I ended up much farther ahead.  Sure, I don`t close any more business than before, but I don`t close any less business either (as far as I can tell), and I make lots and lots of contacts, many of whom become buyers in the weeks and months after a show. 

Good Luck!

 

 

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Lynn Herrick
Managing Member
The L`innovation Group

L`innovation - helping small businesses turn problems into profits.   

A huge thank you to all of you above for all of your great insights.

just what I was looking for.

it`s taken awhile to respond because my wife and I are at the show now
and are having a great time thanks to helpful info you`ve all provided.

We`ve also learned a bunch just by doing for ourselves now and have
been given some great indicators that we are on the right track and are in
it for the long haul not the quick fix.

We`re not rushing prospects so we have several different deals, some
close and some a little further off, in the works.

again, thanks to all of you for your time and support,

blessings,

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