Home – New Forums Logistics Please tell me about minimum orders

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  • #967322
    jands
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    Hi there,

    Just thinking about setting up as a wholesaler and I’m after some guidance on minimum orders. Obviously there’s a lot of variation, but what can you tell me as an overall guide? The retailers will be online stores in a fairly specific area (mums & bubs gear).

    Also, do you offer different prices depending on the quantity ordered?

    Thanks :)

    #1025475
    wordmistress
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    Hi, well you could contact the Retailers’ Association in your state and there’s probably a wholesalers’ association as well. Or try the Gift & Homewares Association: http://www.agha.com.au/.

    They’ll be able to point you in the right direction, I’m sure. :)

    #1025476
    jands
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    Thanks Gina, great info :)

    #1025477
    jasonm
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    A couple of techniques to get your resellers to purchase more is to use ‘price breaks’ and minimums for shipping.

    Price breaks are the most common method to give discounts for qty, a good example of this can be found on the Jaycar website where you show your customers upfront how much they can save by placing larger orders.

    To discourage orders that are too small, offer FIS (free into store) pricing but state that orders under $X amount will attract a freight surcharge.

    Jason

    #1025478
    jands
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    Thanks for that info Jason :) Price breaks is what I had in mind, as I’ve seen it on sites that I buy from, though I didn’t know that’s what it’s called. That’s a good point too about having free shipping for a minimum order cost.

    I guess the thing with minimum orders is that I’m not sure what is a “normal” quantity among the stores I’m going to be dealing with. I can obviously refine as I go along, but I don’t want to be too far off the mark. Not too low that I look silly, but not too high as it’s a new product entering the market.

    #1025479
    rowan
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    A normal quantity will sometimes depend on your customers, and how many items are in a box/case/pallet. A customer in a small town will have far fewer sales than one in a city and may not be able to sell a box of 120 items. Basically if you are able to sell by the box and lower your handling costs, you can offer lower prices as the boxes are coming in and going out with little cost to you.

    You will need to do some homework and some common sense when deciding on a minimum order. By the box is best of course, but if you have some experience of buying kids stuff as a parent you should be able to get some idea of how much to offer a business.

    If you are shifting things by the box/pallet etc make sure there is no invoices or papers from the manufacturer in them, I got cought out by that once and lose quite a bit of sales.

    #1025480
    jands
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    Thank you for that great info Rowan :) I’m actually re-packaging bulk quantities into individual units, so there’s hands-on work involved no matter how many they order, but I’ll try to apply those general principles.

    #1025481
    King
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    In our footwear wholesale business, we have a minimum order of 48 pairs of rubber thongs. This level was arrived at because that is how many fit in one box. Our couriers charge a initial flat fee per box (then extra per kilo), so making it too small a minimum would push the relative cost for delivery too high. We offer FIS for this order size.

    So your matrix might include delivery cost/package size/value of goods sold/average order size etc

    #1025482
    jands
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    Good thoughts re: the freight aspect, thanks King. Can I ask if anyone has a particular courier they recommend? I was thinking I’d just use Australia Post, but it would be good to know what the courier options are :)

    #1025483
    King
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    We use most of them, depending on customer location and number of boxes.

    A limiting factor with A.Post is box size – you could not send a car seat in a box for example.

    Overall Fastway has been our preferred, as they turn up on time (we only go to the shed to pack), so don’t want to have a 5 hr window like some will give you.

    Once you have some shipping history, every carrier (incl A.Post if over 1,000 boxes per year) will be happy to come and give you a free analysis and maybe even better rates.

    We have yet to do this as its only been three months since we took over. Soon tho ;)

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