Selling a Product to Retailers as well as Online

[AJDave]

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Hello, I’m after a little bit of advice on selling wooden products I build online as well as to retails stores. I believe if I can do both of these I can really add to my sales.

So with this in mind, I’ll start with retailers, I was considering having a set retail price for my items, which would be understandably less than the usual customer price. But if I sell the product online this really limits what the retailer would be able to sell the product for. And considering most retailers would probably want to negotiate pricing, discounts, postage, etc, etc, each and every retailer selling the product would be different. Although I’ve never really considered it personally, but I’m guessing its probably not a good business idea for me to sell the product for less than any retail store does, so is there any effective pricing method to be able to sell the product myself and also keep the retailers selling the same items? Or is trying to do both not a smart business option? Should I just stick to one or the other?

[AJDave]

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With that all in mind, one idea that did pass my mind is that I could sell my products only to customers that weren’t within say a certain distance/town/area of a retail shop that sold my product range. I would be able to enforce this with postal address on items bought through my online store.

*Due to my intended product range and variations, on my site customers add the the product to their cart and send it away to get a quote on postage before paying for anything.

[Dave Gillen – Former FS Concierge]

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Hi there,

Welcome to Flying Solo!

I’m no retail expert, but I know that resources are usually limited for a new business, so I’d suggest having a hard think about which of these two channels is your strongest play, then working hard on that channel first. If you do both with limited time and budget then you may do neither very well.

Good luck and hopefully you’ll get some more specific advice from the right people.

Dave

Dave Gillen | LinkedIn

[AJDave]

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Thanks Dave, that’s a good way of looking at it, I need to weight up whether I could sell the product myself on the internet, pay to advertise, perhaps sell less of the product and make more profit. Or, sell it to retailers for less profit, have the advertising mostly done for me by the retailers.

Food for thought, thanks Dave.

[roxanne40]

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I think that the best business decision is to do one or the other. You either sell wholesale to your existing customer and expand that or you sell at a premium price online without wholesale customers.

Very difficult to do both, speaking from 20 years in retail business.

[AJDave]

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Thanks for your response Roxanne.
Can I ask, as you work in retail, do you sell many items that can also be bought directly online from the same company/individual that sells them to you?

[roxanne40]

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Our current business we sell tools and we have our own brand that we have made in china and taiwan ( been doing this for over 14 years) We import them then onsell them to businesses. It is business to business and they are items that are essential for them to conduct business. We are at the top of the retail chain, you need our products to make your products which sometimes are not an essential item.
A few years ago we had a big wholesale side of the business but decided that it was too conflicting, we have a couple of whole sale customers but most of our sales are retail. It is cash on the day and we completely control the pricing. So much better for Cashflow. We found it really really difficult to do both.
In saying that we do sell some national brands to our existing customers. We buy them at whole sale and then sell them at retail, the markup is 30%. We of course promote our own brand as there are better margins in it for us.

[AJDave]

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Thanks for the great answer Roxanne, that really helps! The bonus in selling the items at retail I’d that I’d get paid straight away, unlike selling them wholesale to businesses that probably want 30 day accounts.

I think I’ll go with retail and remove the idea of a wholesale side, thanks for your help!

David.

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