Scaling my business

[jnc]

Hi all, I am a newbie, so please be gentle!
I have opened a small foundry workshop during lockdown producing customisable address signs for home and business. I have validated the product using a couple of online platforms. The issue I have is the UK represents a small proportion of my overall sales, and the selling platforms I use insist on incorporating delivery costs into my final price, which can represent a third of the total selling price. Not currently registered for VAT, but will soon have to because of the selling price I am forced to use.

I want to sell more to the UK, as this is more profitable and have identified a number of retail niches thru which I can sell into. However, I can't make the product , and also then spend the time required to sell it on my own. I don't currently want to take on a salesperson, as the company is so new; but I need to do something in order to grow the business.

Ideally, I would like sales agents or independent distributors, but am unsure of which is the best way to go. What is the pros and cons of each, and how do I go about choosing one?

Thanks in advance

 

[Paul Kelly ICHYB]

How many can you make a day/week?

 

[jnc]

we can currently make up to 160 per month, but if the orders demanded it, we could scale up to 60 per day. We are selling 80 - 90 per month online, but I have other products that we are developing that are 3 times the retail price. What I would ultimately like to do is have a network of sales/distributors that I sell my goods thru. The personalised nature of the product mezns it doesnt lend itself to Amazon or wholesale

 

[Paul Kelly ICHYB]

Great.

Are you happy to pay sales reps 30-50% of the selling price?

My initial thoughts are develop your online presence, speak to local outlets (cobblers, DIY, garden centres etc) and test the market that way - make sure you have an ordering process worked out for this route.

 

[Paul Kelly ICHYB]

BTW, you will also need to give a good margin to the outlets!

 

[Mr D]

Hi all, I am a newbie, so please be gentle!
I have opened a small foundry workshop during lockdown producing customisable address signs for home and business. I have validated the product using a couple of online platforms. The issue I have is the UK represents a small proportion of my overall sales, and the selling platforms I use insist on incorporating delivery costs into my final price, which can represent a third of the total selling price. Not currently registered for VAT, but will soon have to because of the selling price I am forced to use.

I want to sell more to the UK, as this is more profitable and have identified a number of retail niches thru which I can sell into. However, I can't make the product , and also then spend the time required to sell it on my own. I don't currently want to take on a salesperson, as the company is so new; but I need to do something in order to grow the business.

Ideally, I would like sales agents or independent distributors, but am unsure of which is the best way to go. What is the pros and cons of each, and how do I go about choosing one?

Thanks in advance

One way or another you would be charging your customers delivery and that would impact vat registration anyway.
No idea why you are forced to sell at a high price by others ,- set your own prices for things and either charge a delivery fee or include it in price. Same either way in terms of cost to the customer.

A sales agent would, for a fee and commission or just commission, tout your goods to retailers in a particular area. Would you be able to supply quick enough?

Not sure your product type would suit sales distributors.

It sounds like something you could offer dropshipping to online retailers - they tell you what customer wants when they get an order, you produce and send out after billing the seller for item plus postage. You can make a profit on both.

However the amount you could charge would usually be lower than the amount you could get yourself selling online.

 

[Financial-Modeller]

...However, I can't make the product , and also then spend the time required to sell it on my own. I don't currently want to take on a salesperson, as the company is so new; but I need to do something in order to grow the business...

Would it be better to get somebody else to make the items, so that you can concentrate on selling them, and further developing your business?

we can currently make up to 160 per month, but if the orders demanded it, we could scale up to 60 per day. We are selling 80 - 90 per month online, but I have other products that we are developing that are 3 times the retail price.

If so, it would be better to bring somebody onboard whilst you have some capacity, rather than when you don't.

 

[jnc]

One way or another you would be charging your customers delivery and that would impact vat registration anyway.
No idea why you are forced to sell at a high price by others ,- set your own prices for things and either charge a delivery fee or include it in price. Same either way in terms of cost to the customer.

A sales agent would, for a fee and commission or just commission, tout your goods to retailers in a particular area. Would you be able to supply quick enough?

Not sure your product type would suit sales distributors.

It sounds like something you could offer dropshipping to online retailers - they tell you what customer wants when they get an order, you produce and send out after billing the seller for item plus postage. You can make a profit on both.

However the amount you could charge would usually be lower than the amount you could get yourself selling online.

I can scale production to meet demand no problem.
I sell to the UK at the same price as I sell overseas, so there is more profit per unit.
I envisage a distributor as an individual/SME rather than a wholesaler for these products.
I hadn't considered dropshippers, as I didnt think they would be interested, so thanks for that.
where do you go about meeting/vetting distributors, agents and dropshippers?

 

[The Byre]

where do you go about meeting/vetting distributors, agents and dropshippers?

Trade fairs.

Two issues spring to mind - firstly, the forging process means that the items are lovely and durable, but too damn heavy for the online market. One of the primary tasks of product design engineers is to create a camera, a computer, a vase, hi-fi-speakers, a musical instrument that is cheap to store and transport. That means it has to be light.

The problem with selling to shops is the obvious fact that they require a hefty mark-up and if they are selling online, the transport costs (that lie heavy on the product as it is) hit the bottom line twice, unless you send directly to the customer and the shop merely takes the order.

 

[Mr D]

Trade fairs.

Two issues spring to mind - firstly, the forging process means that the items are lovely and durable, but too damn heavy for the online market. One of the primary tasks of product design engineers is to create a camera, a computer, a vase, hi-fi-speakers, a musical instrument that is cheap to store and transport. That means it has to be light.

The problem with selling to shops is the obvious fact that they require a hefty mark-up and if they are selling online, the transport costs (that lie heavy on the product as it is) hit the bottom line twice, unless you send directly to the customer and the shop merely takes the order.

Online market caters for stuff up to about 150kg. By the sound of it most of the OPs stuff will be lighter.

 

[Mr D]

I can scale production to meet demand no problem.
I sell to the UK at the same price as I sell overseas, so there is more profit per unit.
I envisage a distributor as an individual/SME rather than a wholesaler for these products.
I hadn't considered dropshippers, as I didnt think they would be interested, so thanks for that.
where do you go about meeting/vetting distributors, agents and dropshippers?

Trade fairs are the biggest grouping of people you would be after. Not cheap though.
Trade press will be a lot cheaper but not reach as many.

A distributor I would think would be a retailer - selling to customers, providing the required data to you for customisation then you sending to customers.
Which is effectively dropshipping.

There are always adverts in the trade mags I get for distributors. They want commission of course but they tend to focus on retailers so may well be more a link in the chain if products need any work done.