Selling to agents/retailers?

[boopolo]

Hi all,

We currently sell only online but would like our products to be displayed in small independent shops as well (large retailers would be even better).

Is there a standard way to do this? Is it a matter of just flicking through the yellow pages and picking out then fire them an email asking whether they would want to display our products? how does this usually work?

Any advice in pointing me in the right direction to get started would be much appreciated.

Many thanks

 

[dannyjw]

Definitely start off with the independents. They are often much more approachable and you can deal directly with the business owners. Attend trade shows, network as much as possible and build your contacts. Getting contact details and targeting buyers in larger companies can seem daunting at first, but if you have tenacity and perseverance you will succeed.

Can you give us some context on what type of products you are selling?

 

[boopolo]

Hey thanks for the quick reply.

Problem is i am not sure what their profit margin is from their other suppliers. And do not know how to obtain this information. I am not competing with their other suppliers directly as our products is more unique but just wasnt sure what the retailers tend to earn per product or how they go about doing it.

Jewellery for now

 

[easidoo]

@boopolo from experience of establishing wholesale network across Europe for an organic beauty brand and a handmade beaded jewellery brand, to be really honest this is not an easy cookie to crack. So, be prepared to be patient.

From retailers perspective, stating the obvious here, the shelf real estate has a premium and which product occupies which part of that estate depends on set of sales metrics. Retailers, on average, make anything between 30-100% margin on the wholesale prices. Obviously, they've to cover the costs of space, electricity, staff, and so on...

Here's one sales and marketing tip I can give you free of cost - If you already have a consumer base (i.e. end customer) then send them an email explaining you're trying to make it easier and quicker for them to purchase your products by making the products available in their local stores of choice. What the customer has to do is send you details (name, address, phone,....) of the store of their choice. You'll contact the store and if the store agrees to stock your products, the customer gets FREE products (a discount coupon, percentage,..) based on the value of the first order from the shop. Benefit: a) You don't need to hire a sales team because your customers would be your salesmen to generate leads. b) you increase the customer loyalty, and c) When you do call the retailers, you can evidently demonstrate to them that there are existing customers in close proximity to their shop who want to buy your products from the retail store. A win-win situation for everyone.

Hope this helps. Happy to offer formal consulting if you need further help.

 

[boopolo]

That is excellent advice. Thank you
But im still worried if retailers are going to make such large increase in their margins that our philosophy of giving good quality product at very very affordable prices to end consumer is not going to work.

What if i give retailers 50% of the suggested retail price as commission? Would this solve this issue? My head is rather all over the place at the moment. Sorry if this seems illogical.

Thanks

 

[easidoo]

Perhaps you could set a Max Retail Price and set the percentages with volume breaks, i.e.
sale value (last quarter) | commission (next quarter)
< 50k | 30% next qtr
< 100k | 50% next qtr

Keep in mind that you would not stand a chance of offering similar commission to the big retailers. They'll tell you how much they want to pay you and you'll have to negotiate and decide if it suits you.

All the best.

 

[dannyjw]

Hello again, I would still recommend starting off with the independents (the smaller fish) and work from there. You can avoid many of the issues you've highlighted above.

Some of the best reasons why this will be a better fit for a new producer:

1. Buyer is usually on site and you can sell directly while in the store.
2. These stores tend to be more flexible with their “open to buy” time and products selection.
3. Specialty shops have a narrow focus than big box stores making it an easier sell for small producers.
4. Independent shops are often looking for new and unique products that are NOT featured in the larger stores
5. You can sell your products in smaller case lots allowing for more flexibility with your line and with the shop.
6. Often, you can sell at higher margins
7. You can easily develop a relationship with the owner/buyer quicker and easier (which leads to more sales) than when working with a corporate office.

(sellingtogiftshops(dot)com)

 

[boopolo]

Excellent advice, thank you

 

[Ashanti Brazil]

Great advice given! Definitely agree with starting off with the smaller independent retailers first. They may be more forgiving regarding any stumbling blocks you fall over at the start of your business relationship with them. However with the large retailers, you usually only get one shot.