Home – New Forums New here? Share your story Spoke to some shop owners…now what?

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  • #995066
    Vesper79
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    Hey there!

    Ok so last week I got my stock and had a chat with a few retail outlets about the possibility of stocking my item. It retails at $39.95 and costs me around $4.- an item (inventory alone, packaging may add $1.- ). I quoted $20 incl GST as the wholesale price. Would this be fair? What do I do now to lock it in with them? I am totally new to the wholesale process, do I need to give them more information, an order form, a look book? If so, what do order forms look like? And what kind of payment terms is the industry standard?

    Cheers!

    #1199808
    BuyGlobal
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    Some very nice profit margins you have there. For a retail outlet to make 100% on an item is pretty good in my opinion (as long as the product will sell at full retail).

    I’m sure there are other’s here that will be able to help with your other questions.

    #1199809
    bb1
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    Vesper79, post: 236553, member: 57178 wrote:
    Hey there!

    Ok so last week I got my stock and had a chat with a few retail outlets about the possibility of stocking my item. It retails at $39.95 and costs me around $4.- an item (inventory alone, packaging may add $1.- ). I quoted $20 incl GST as the wholesale price. Would this be fair? What do I do now to lock it in with them? I am totally new to the wholesale process, do I need to give them more information, an order form, a look book? If so, what do order forms look like? And what kind of payment terms is the industry standard?

    Cheers!

    Raises a few questions.

    Who set the retail price at $39.95, if you just made the number up, than will the consumer pay for it, is it a reasonable RRP, or is it just trying to get the highest possible margin.

    I had a product I was selling for $14.95, very slow uptake, I dropped the price to $14.45 and sales doubled overnight.

    Were the retailers interested?, did they say yes I will buy? If so get an order form in front of them, and take their money.

    Is it fair that you are purchasing for $5 and onselling for $20. Depends on who’s perspective. If I was a retailer, I would want you to sell it to me for $2.50. Fairness is in the eye of the beholder and which part of the supply chain you are in. As a wholesaler you want to get the highest possible margin, as the retailer I want to get it for the lowest possible price, I don’t care if you make a profit or not (figuratively speaking). At the end of the day as long as every person in the supply chain can make some money out of the product yes its fair. your only concern is will they purchase at that price?

    google ”order forms” or ”proforma invoices” for some ideas on an order form.

    Most wholesalers I deal with want payment upfront, a couple now allow me payment on account, now that I have established a reliable payment history.

    #1199810
    Rohan@TD
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    Would this be fair?

    Maybe. What’s the going retail price of the item? Can consumers get the item easily elsewhere?

    What do I do now to lock it in with them?

    This depends on the outlets you’re selling too. Some will want agreements covering a broad array of factors, such as quality, order qualities, time frames, exclusivity etc. Your interests are best aligned with outlets ordering a constant (or seasonally predicative) number of items which align to your supply chains capacity to get items to you – As a supply chain principle you don’t want to hold anymore stock than absolutely necessary and be capable of getting stock directly to your outlets as soon as they require it.

    do I need to give them more information

    Yep:

    • How they order.
    • What your planning lead times are and deviation terms (e.g. cost to process an order overnight and ship instead of going through the standard order processing period).
    • Sales conditions (e.g. Minimum retail price)
    • Payment conditions
    • etc.

    Ultimately though, it depends on how much you want formalise your agreement / systems. For you, defined processes and agreements are good. For your clients, less so and present more risk.

    an order form

    Depending on the size of your client you may prefer to integrate into their order system. For smaller clients, use Bert’s recommendation above. For larger clients, ask them if they require or would like you to integrate into whatever system they are currently using.

    #1199811
    Vesper79
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    BuyGlobal, post: 236557, member: 69895 wrote:
    Some very nice profit margins you have there. For a retail outlet to make 100% on an item is pretty good in my opinion (as long as the product will sell at full retail).

    I’m sure there are other’s here that will be able to help with your other questions.

    Thought I’d clarify that the prices I have quoted does not include marketing, advertising, my time or any of the other little costs that add up…. ;)

    #1199812
    dansyd1
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    Vesper79, just realised your product is the delta bands from the other post! :)

    Those other costs that you mentioned in the last reply (marketing, advertising, your time), take it on the chin! Every supplier has those costs to push their product.

    The other members were pretty comprehensive on getting the ball rolling.

    fair?
    I believe those prices are fair, as long as your committing to the RRP. Give the shops a bulk discount, maybe 10% if they order >10. 15% if they order >20. 20% if they order >30.
    Lock it in?
    No such thing really in the industry (unless you want an exclusive contract, and only do this is its a HUGE RETAILER like Myer/DJ), you just need to start taking orders and things are under way!
    Order form?
    You should be using some sort of accounting software (or should be soon), they have standard order forms you can customise.
    Make ordering EASY for the retailer, fax form, order email address, and even a “Dealer Login” section on your website.

    Standard 30day payment terms for wholesale. Good companies give a 2-5% discount if invoice is paid within 7days.
    Friendly reminder phone calls/emails after the 30days.

    Msg me if you need any more help.

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