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dancingdog

posts: 14

Apr 23, 2008 5:34 PM ET Quote Report Abuse

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I`ve been selling my product through my website exclusively. I`ve had lots of interest from retailers asking for wholesale pricing. I`m not sure what to do. My pricing structure was geared towards a website marketing approach. I simply do not have much room to reduce my price so retailers will make their "keystone" markup requirement.

If I do sell to wholesale accouts, there will only be a select few. Can someone give me some advice on terms? When selling wholesale- who generally pays shipping? What are the payment terms? Is there generally a deposit required? How would I go about setting a minimum order quantity?

Thanks to all!

kris

www.dancingdogdesign.com

kingofcopy

posts: 1

Apr 23, 2008 5:54 PM ET Quote Report Abuse

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two options:

1. create another product adding additional value and boost your price.

2. combine this with another product and wholesale them together as a bundle -- again for more money.

Good luck, Craig

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

I`m a copywriter and direct-response marketing consultant. I publish a monthly offline newsletter called Seductive Selling, a business and marketing newsletter for entrepreneurs that is currently read in 12 countries. My book, "Seductive Selling, The NEW Rules Of Selling In Print: 27 Unconventional Ways To Make An Absolute KILLING In Business!” will be published in the next 90 days.

CraigL

posts: 9051

Apr 23, 2008 11:14 PM ET Quote Report Abuse

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Another option is what we`re doing. We also began online, with a very low price point, mostly to help improve our lifestyle. We also have gotten a few inquiries from people about wholesale prices.

The way we`ve gone is that we now tell everyone that our Web prices ARE the wholesale prices! We`re a new company, with introductory pricing at a "direct to the public" wholesale price. :-)

That leaves us room to maneuver. If someone wanted to pick us up in a minor way, they get the same Web price, and they can mark the flags up to whatever they think they can get away with. We`d be competing with them, of course, but they`d have the product right there. As a concession, we`ve considered giving them maybe a 50-cent per flag discount, but they`d have to contract for X amount of product sales per period.

Another avenue would be if someone hyyOOOGE, like Walgreen`s or another national store decided to pick us up. We then would adjust OUR prices on the Web site to match their retail price. We do have a disclaimer on our main page, "Prices subject to change without notice."

It comes down to numbers. Right now we`re doing fine, for a lifestyle (or boutique) business. We don`t have the capacity for high volume at the moment anyway. So if someone wants to bump up our capacity, we`re going to need a contract in order to finance outsource manufacturing. Maybe you already have that?

Otherwise, if you don`t, then like us, you`d want them to contract for a dollar amount ahead of time. We`d use that to have a manufacturer help us out. Logically, at that point, we`d be making so much more money we could then decide how we wanted to handle our Web site. It`d model after the "Direct from the factory" format, or we`d simply stop selling to the public, and sell only to retailers. Probably not, though, since we`re having fun building the business as it is. :-)

Cookie

posts: 116

Apr 28, 2008 2:32 AM ET Quote Report Abuse

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I sell from my website & my product is also available at retail locations. The wholesale price

to those retailers is 1/2 of what I charge on my website. They pay S&H. The consumer is better off buying my product from the retailer because of my $3.01 S&H. But if they live in a location that does not have a retailer carrying my product, then they buy from my website.

I`m very flexible on minimum orders. I normally say 1 dozen but if a retailer wants to "try out" my product & just wants, say 1/2 a dozen, I say, "OK, twist my arm & we have a deal." The Missouri Botanical Garden started that way, just taking 8. But they`ve ordered over & over & over & over, 8 at a time.

My terms are Net 30. Most retailers are very good about paying on time. But if they`re a couple of weeks late, I call. Sometimes the invoice got tossed when the box was opened, sometimes it didn`t make it to the bookkeeper yet & sometimes the retailer just needed to be prodded. This will be my 6th year in business & knock wood, I haven`t been stiffed yet.

I`d hate to just sell wholesale because I enjoy dealing personally with customers. I get sweet instructions sometimes on orders asking me to include a birthday/Mother`s Day/thank you note. Or the envelope is marked: To Customer Service at Wherry Enterprises. Gives me a chuckle since I`m a one-woman operation. I`m also able to work garden walks in the summer demoing & selling WEDGIE at the same price as on my website. To help out local retailers though, I also work some of their spring open houses. When I do that, I`m selling the product they`ve ordered from me. The more I can sell, the more they will buy. I just have more in the car.

In my experience, no retailer would purchase my product unless they could mark it up 100% of what they pay me. In other words, if they pay me $6.50, they`re going to charge at least $13.00. They`re bricks & mortar & have lots of expenses in addition to S&H. I,

on the other hand, have the manufacturing cost. WEDGIE is made here in IL, costing more than if I had it made in Asia. But this was a firm decision on my part & I have no regrets.

Good luck, Kris. I suggest marketing your product in as many avenues as you can!

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dancingdog

posts: 14

Apr 28, 2008 10:41 AM ET Quote Report Abuse

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Thanks for the information, Cookie. You`ve been a big help. You see my problem is that if I do give the retailers their full markup, I will not make much profit at all. My margin will only be a few dollars- not nearly what the retailer is making.

Is this the kind of problem you are having? Are you making any money when you sell direct to retailers? Or do you just take a smaller margin knowing that your product is getting into the hands of other "word of mouth" advertisers (ie satisfied customers who will spread the word)?

I am thinking that the solution to my problem may be to only sell to "choice" retailers. Ones that may be physically closer to me or ones that are in perfect communities with lots of foot traffic where I think my customer is.

I agree with you that dealing with the public (especially through the website) has its big advantages. I want to sell to retailers but I also need to get my product into the market so others can see, touch and feel it.

Next time I go to Pasquesi`s, I will look for your product. I know the feeling of having dirt everwhere when planting. I just did my containers over the weekend and it was a mess! Then the dogs get the dirt on their paws and track in through the house!

Thanks for your help.

kris

Cookie

posts: 116

Apr 28, 2008 5:02 PM ET Quote Report Abuse

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Glad what I had to say was helpful, Kris.

I obviously get the biggest return on each tool when I sell directly to the consumer. But because of volume, I make more money through my retailer orders. Speaking of which, I have

to scoot to the post office because I have WEDGIEs to mail to a MN landscaping company & a SC retailer. I had no website orders today. See what I mean?

Roughly, I multiply my manufacturing cost by 3 & that`s what I charge the retailer. And roughly, they double that. I based what I charge on my website with the price retailers ask for WEDGIE. I won`t undercut my retailers. It`s better for the customer to go to a retail location so that they don`t pay S&H. This is my personal formula with info gleaned along the way. I don`t have a business degree so I don`t know the "correct" margins but this works for me.

As I said earlier, the retailer has a lot of costs: store, staff, product. Your product is sitting on a shelf taking up valuable space. They won`t sell your product unless they can make enough of a return on it to suit them.

Glad you`re going to check out WEDGIE. It`s helpful all summer long when some of your plants get too leggy or some kick the bucket & have to be replaced. A trowel cuts off the

roots of the keepers. WEDGIE just wiggles in there & creates an opening for a replacement plant. There`s no spilled dirt to clean up & no dirty dog prints!

TaTa,

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minimegeology

posts: 143

Apr 29, 2008 10:16 PM ET Quote Report Abuse

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Hi dancingdog,

I just went through the same situation. Pricing is tricky. I did a detailed analysis (after lots of research on how to even do one) and came up with wholesale prices and retail prices. I have a really neat spread sheet that I can email you that helps you determine pricing in bulk and where your best profit margins are. For me, I ended up increasing the prices on my website. I`ve been in business about one year and I have done some great improvements on the products so it was warranted. If I hadn`t, I could not have sold the products wholesale.

On your terms, you can make up what ever you want. Decide what terms will make you comfortable and go with those. If you can`t front a retailer the money for a large order insist that they pay up front. I looked at the terms from several of my suppliers to get ideas and then added what I wanted to have in there. I did have an attorney review them.

Good luck.

Tracy

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

Tracy Barnhart, Owner
Giverny, Inc. / Mini Me Geology
http://www.GivernyOnline.com
http://www.MiniMeGeology.com

dancingdog

posts: 14

Apr 30, 2008 10:31 AM ET Quote Report Abuse

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Thanks Tracy. It sounds like you were in the same place I am now. Since my product retail for over $130, I just can`t make any money by wholesaling it for $65.00. The math just doesn`t work. I am reluctant to increase my price since I feel I am giving good value to the customer for my items. I think I`ll just have to ramp up my marketing - ads in magazines, google ads in order to get more business through my website.

I guess the bottom line is - Is it possible to have a thriving business based entirely on the web?

All opinions are appreciated.

ps. Tracy, I would like to see that spread sheet if you would like to email it to me. Thanks.

minimegeology

posts: 143

Apr 30, 2008 2:25 PM ET Quote Report Abuse

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I will send you the spreadsheet. It is pretty interesting. What if you retailed some of your items through other companies and kept some online only? Could you get your production costs low enough on t-shirts and belts, maybe, that you can wholesale those which will get you some additional exposure and drive more people to your website to buy your more expensive items?

Tracy

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

Tracy Barnhart, Owner
Giverny, Inc. / Mini Me Geology
http://www.GivernyOnline.com
http://www.MiniMeGeology.com

Cookie

posts: 116

Apr 30, 2008 2:31 PM ET Quote Report Abuse

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Hey Tracy, I`d love to see that spread sheet, as well. Thanks!

And Kris, all KINDS of businesses are thriving with strictly web orders. Just depends on where you come up on the search engines, what your business is & if people want your product & are willing to pay your asking price.

I think Tracy`s suggestion of selling certain products through retailers & others from your website makes a lot of sense.

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