Interested in supplying my products to shops - how does it all work?

[ClaudineZ]

Hi

I’ve recently started a toy business –I import the toys and resell, so far online, at fairs and by word of mouth. I’m now keen to approach shops and see if they are interested in reselling my products. However I have no idea how it all works. Is there an expected profit the shopkeeper would make too? Would they buy my items (at a price we agree upon) and then resell at a price they decide or do I agree a selling price with them? Or would they place my items on their shelves and only pay me if they sell?

Any guidance /hint & tips would be greatly appreciated

Many thanks

Claudine

 

[deniser]

Hello Claudine

I had a toy/childrenswear shop once and I tried to only stock toys on which I could get a mark up of at least double plus the VAT. It is customary for shops to buy their stock.

The big branded toys - Playmobil, Lego, Barbie etc. had much lower margins and I couldn't buy them at a price which would enable me to compete with supermarkets without joining a buying club - in some cases, they were selling them at less than I could buy them at wholesale - so I stayed well away from these and stuck to lesser known brands.

If you are new you could offer sale and return to get people to try your products at no risk. This may be a good way to start.

You can also exhibit at the trade toy and gift fairs but this will require quite a major outlay.

Shops are free to sell at any price they like - you can recommend a retail price but you can't force them to sell any particular price.

The important issue is safety and making sure all the products comply with all safety legislation (EN71 etc.) and carry the CE mark.

What sort of toys are they?

 

[oldoakey]

In my trade the reps just call into the shop with samples and images. You could build a list of outlets that you think may be the type of stockist that would retail your offering and just call in to see them. This can be hit and miss and expensive, getting around every six weeks or so I am told is the way to do it.

Have you looked into agents, they will for a commission do all the leg work for you.

You could also start a email campaign, build a list of address for the type of outlet (mail chimp free up to 2000 people on list) get some quality images and text. Make them an opening offer some sort of reduction maybe on first order this may just make them respond.

 

[The Byre]

Is there an expected profit the shopkeeper would make too?

No. These are charities and the people in them are volunteers. (That's why they are always so keen to help you!)

There have been recent moves however, to make the selling of toys and for-profit activity. I believe this began some time prior to the dawn of the Anatolian and Hittite empires and has been gaining considerable popularity with the introduction of gold, silver and bronze currencies.

If you do go down the Anatolian and Hittite route of expecting people to work for a profit, you might like to charge 50-60%(net) of RRP(gross).

 

[Chris Ashdown]

I assume you have insurance to cover any potential problems that may arise like the goods being painted with lead based paint or buttons they break off and choke a child.

The regs are there for you to check just because the Chinese state it meets all uk regs and requirements if they have lied like they tend to do then its your responsibility, and so it should be

 

[myfairworld]

Generally speaking a retailer will want to multiply your price by 2 at least. So when they look at your toys and you tell them your price they will be asking themselves if at that multiple the end price will be one at which people are likely to buy or not.

You can certainly suggest a recommended retail price (RRP) as a guide but no one is under any obligation to sell at that price.

By and large retailers expect to buy their stock but they will generally expect some time to pay after receiving the stock. I run a shop (not a toyshop but we do sell small quantities of toys as part of our mix) and most of my suppliers give 30 days credit. If you are ambitious to sell through the big players (supermarkets, department stores, etc) you can expect to wait a long time for payment and the big player will be dictating the terms not you and not just about payment times. An 'ordinary' shop chooses carefully and if the products don't sell they curse themselves rather than you, though of course if your products don't sell they won't be buying from you again. Big players may well dictate terms that unsold stock can be returned - regardless of condition - after a period of time which suits them and which may well involve you going to fetch it.

Some suppliers do use sale or return to get shops to try new lines or simply because it suits the supplier to do so. I have one supplier who will ONLY supply on sale or return but the items she sells are of high value but very small so that the cost of sending stock to shops and the cost for shops sending any stock back is actually quite small in comparison to the profit to be made on the stock. I have another supplier who offers no credit time demanding payment up front for everything except one particular line. The goods are high quality for their price and the supplier is very flexible about quantities (always a big attraction to a small shop) which makes paying up front a more attractive deal. But they do sell one very unusual line and they offer it on the basis that you pay up front but if you can't sell any they will take the unsold stock back and refund you. I think this does work for this particular item. I don't think I'd have bought any in the first place if not for the return offer, but over two or three years I've sold hundreds of these items and never sent any back.

Personally I like to be able to order from a website (or at least look at items on a website or Facebook or whatever) or to have a printed catalogue. I'm not keen on people bringing samples to my very small shop which can often be very disruptive and which seems to be used as a technique by those offering no-hoper stock. But that's just me.

 

[ClaudineZ]

Thanks for all the feedback. Learning so much as I go along!

I sell wooden toys, which are made in Europe. I do have public liability insurance. I would aim to sell to individual small shops rather than chains, and would hope to start in my neighbourhood. Sale or return might be a good idea, especially to start off with.

Since I’ve only launched recently I kicked off with low prices (after days of research on similar product prices), and only make x2 on the cost price myself (and not on all toys). That’s where I think I may encounter difficulty when trying to sell to local shops. The shopkeeper’s profit will have to be less than x2. Although I can always give it a try.

Thanks all!

 

[billmccallum1957]

Thanks for all the feedback. Learning so much as I go along!

I sell wooden toys, which are made in Europe. I do have public liability insurance. I would aim to sell to individual small shops rather than chains, and would hope to start in my neighbourhood. Sale or return might be a good idea, especially to start off with.

Since I’ve only launched recently I kicked off with low prices (after days of research on similar product prices), and only make x2 on the cost price myself (and not on all toys). That’s where I think I may encounter difficulty when trying to sell to local shops. The shopkeeper’s profit will have to be less than x2. Although I can always give it a try.

Thanks all!

You need to look at volume discounts from your supplier, as long as you are retailing yourself it will be difficult to get other retailers to sell your products as you will always be able to undercut them.