Price list or no?

[caroline]

Hi guys

I've been working hard promoting our new baby product. I've also been sending out samples to large chain stores to see if they are interested in stocking our product.
Today (for the first time) a large baby catalogue & chain store contacted me and asked me to send them a sample & product details. It's really nice to have someone come to me instead of me doing all the chasing! Anyway, this would be a major account if we could get it. I wanted to ask your opinion..should I send a price list with the sample? I usually send a covering letter with some info and say if they want the price please contact us. The reason for this is in case they want to negotiate the price later. What do you think? We have three different levels of pricing, judging on the volume they may purchase.

I sent another sample to a buyer from a large company and they emailed me and eventually asked for a price list, I take this as a good sign, but they are very hard to get in contact with on the phone, and they said they will let me know.
Anyone else with any tips for dealing with buyers from large firms? Any tips or ideas, should I send the price list or wait? :?

All advice appreciated.

Thanks!

regards,

Caroline

 

[Astaroth]

I am not in the buying or selling world at all so probably not the person to be advising - the only buying I have been involved in is for one off IT services where their is no "price list".

Personally I would give an RRP for the item and give a guide price (based on the lowest volume you would sell) with a basic statement that the trade price would be subject to negotiation based on volume. The other option is to give a set price for each volume bracket - ie 0-50 units/ month £10 per unit, 51-100 units/ month £9 per unit etc. This give a clear idea of where you are looking at prices but may put people off. If you do go for this route you need to be very explicit over the pricing. With the above example, if I buy 70 units a month do I pay £10 for the first 50 and £9 for the other 20 or just £9 each for all 70?

Hopefully someone who can be more useful rather than just a brain dump will post soon

 

[DavidHorn]

I think you need to include a price list ... they've done you a favour by contacting you once ... don't expect them to do that again! Now that you've got them, give them what they're looking for. Include the RRP and any volume discounts you can offer on the wholesale price.

Good luck!

 

[Jean@wincom]

Another option would be to say that price is negotiable within a specified range, depending on volume. Specifying the range should give some comfort on price and flexibility.

 

[sparklyscotty]

I think that you should include price lists.
A word of warning... large companies can be very demanding and try to drive your prices down. While big contracts can be tempting, you don't want to get into a situation where you have large orders and tiny profits.
Just a heads up.
-Angel-

 

[caroline]

Thanks everyone, you have been very helpful! Like you said, its best to send something rather than having to wait for them to come back to me.

regards,

Caroline

 

[DavidHorn]

I wouldn't recommend telling them that your prices are negotiable! It's setting you up in a weak position. They'll assume you're negotiable anyway - they will understand that they're a 'big' company and that you're a 'small' company - they'll realise who needs who the more!

 

[caroline]

Yes, I have been warned they will try to get the price down, if they are interested. I would rather not sell it to them if they try to drive it down too far, as to be honest, we are in a position to offer a very generous discount anyway.

regards,

Caroline

 

[daveashton]

Well I would not give them a price.

In your letter it will end anyway with something like

If you require more information please contact ....

I would also do a quick check to see what they are selling at the moment and for what price. Base your figure on at least 100% profit for them and that will start to give you an idea of what price they will be looking for. Other factors to take into account are things like:

Your brand is not well known so is harder to sell
Quality
They want to make more profit than they make from there current offering
Your support in promoting the product with them or directly to the user
Is your company stable?
Can you make the volumes if required and if so how?
What is your quality control procedure?
Etc

 

[SillyJokes]

Caroline I think your product will sell well because it appeals to a desparate market who are willing to try anything - I mean that in a good way.

The retailers will probably see this potential as well, however, is there anything to stop them getting them direct from the manfacturer or getting copies made as they may have the volume? Only your professionalism and price.

I would send a start price and expect to negotiate from there. A reasonable start price will illustrate that you are not a clueless amateur, a common danger when working with new small companies.

 

[caroline]

Thanks guys, I really appreciate the advice. Sillyjokes you made some great points there, the product I'm pushing at the moment is the "Swaddleaze" baby swaddle, not the cushion (yet). I'm reasonably safe as we have the exclusive licence to distribute in Europe from the manufacturers themselves, and its patented worldwide too.
There's no problem getting the volumes out, we can have thousands made within days, and import only takes 2 days, and its all quality checked too.

You have made some great points and its been really helpful. Swaddleaze featured on the news in America last night if anyone wants to have a lookie, it got a brilliant review! Scroll down this page & click on swaddleaze:

http://www.cbs47.tv/mediacenter/[email protected]

(hope that works!) We are also hoping to feature on "The Baby Channel" end of May.

Thanks

Caroline

 

[profitxchange]

The one thing to remember when striking a deal with anyone - it must be mutually beneficial!. Good business is a two way street.

There are two element to pricing, how you position the product, premium or commodity or somewhere in between. Having a Brand or not.

A strong brand and percieved premium product enable the seller to set a higher price point. this gives the supplier the opportunity to get a higher price as well.

What you must avoid is positioning the product as premium and selling as a commodity, the market gets confused and you will loose out.

Hope this is not too confusing.

Good luck

 

[adam]

I would send some indicative prices.

The letter and sample would be an introduction and would highlight the whole "features and benefits" thing. A lot of marketing waffle but would have to show why your product would sell to the customer and also the margin the retailer would be expected to make.

Go for a reasonably big order and set a good price on that. If they want less then obviously it goes up. If they want more you won't mind reducing as the order would be bigger than the you were expecting.

 

[caroline]

So far I've been sending a covering sales letter, with a sample, leaflet and price list. I rang another Company the other day and she told me to send in a sample and profile pack. Is there anyone here that could perhaps assist me with that, and any idea of cost? Perhaps I'm not sending in enough details. If there is anyone here that would like to work with me on it for a nominal fee please let me know
regards

Caroline

 

[Anara]

As a baby product retailer I have come across a small number of manufacturers/distributors/wholesalers that won't initially send out price lists. Some big names included there too.

I would send out the price list but not mentioning discounts etc because they will try v hard to drive you down anyway so always best to start at your top price.

I have a friend who manufactures her own product and is now in all Mothercare/Boots stores and exports and also has her product at Centre Parcs and one of the things she has talked about is that big companies can take up to 6 months to make a decision after receiving samples etc and sometimes the final deal isn't made for even longer. They can also take a long time to pay you and will expect long payments terms - 90 days is the norm I believe.

hth

Claire

 

[caroline]

Thanks Claire, that helps a lot! I have come to realise buyers take a long time to get back to you, or even speak to you on the phone, no matter how great the product is, or how well its doing.

regards,
Caroline

 

[SillyJokes]

I am technically the buyer for SillyJokes and it does take a long time to get around to placing an order sometimes because it takes a lot of effort to set up a new supplier, make the webpages for the product, find storage space for it etc etc.

I do prefer to work with a few suppliers rather than lots of little ones because dealing with a small supplier means investing too much in one order of their stock, however if a product sells consistantly well that is not a problem. It is hard for someone to become a new supplier for SillyJokes.

It may be a good idea to occaisionally write to the buyer who recieved your sample and simply ask them for their order. I don't mean hound them but sometimes it acts as a reminder to the buyer to take action on your product which may have slipped to the bottom of the list and it can be nice to be asked for an order because it shows the suppler is interested in you as a good potential retailer. You can also use this opportunity to answer any questions or objections.

I suppose it comes down to whether you are a saleperson or not. Can you build a rapport that allows you confidnece to just call up and ask for that order?

~With some of these guys is sending a smaple enough? Wouldn't actually visiting them be worth the effort - it would really show you are serious about your product AND you could possibly close the deal.

 

[caroline]

Thanks sillyjokes, I'd love to visit them, but the big buyers won't even entertain giving an appointment (so far). Most of them tell you to email first and then they ask for a sample if they are interested, and we have been asked for quite a few samples. I always write in the sales letter we would be pleased to meet up for an appointment, I'd love nothing better than to be able to do my pitch in front of them, believe me!

regards

Caroline

 

[SillyJokes]

OK, what about proving the product sells in this country by supplying them with some real and impressive sales figures from you selling them off the website?

As a newbie to your product I think it would be helpful to show with much more force the difference between your product and just about every other baby sleeping bag on the market as I don't think this comes across at all.

As a bit of fun, complete this sentence in 5 words or less.

Swadleaze is different from other baby sleeping bags because....

I really do wish you well with this project but I think the difference between your product and other similar ones is not clear enough. I expect you are thinking, (put on your best Allo Allo voice), "You Stupid wo-man - it is obvious," but I promise you it isn't.

What about a page that compares your brand to the other leading one?

 

[caroline]

Great ideas, thank you. We are working on a page just like that! Swaddleaze is primarly a baby Swaddle and also doubles up as a sleeping bag, so its currently the only one of its kind on the market that does both.
Ordinary sleeping bags are not recommended for babies under 10lbs, while Swaddleaze can be used on preemie babies from 3lbs upwards. I could go on all day but I won't bore you!

Thanks again, all valuable info!

regards

Caroline

 

[caroline]

Good news, we got an order back from a Major retailer! I'm really pleased, also because we have several more "interested" buyers in the pipeline too.
Thanks again everyone for the advice

Regards,

Caroline