Wholesale pricing and minimum qty

[k_los]

Hi im after a small bit of advice, i run a handmade jewellery e-commerce website. our retail prices range from between £15-40. We have been approached by another e-commerce website who want to know if we are prepared to sell wholesale to them.

We like the company and feel this would be good for us however are a little lost when it comes to Wholesale pricing and minimum qty my questions are therefore:

1. With regards to Wholesale pricing do we sell at 50% retail price (ie £40 retail so £20 wholesale?

2. What would be a good min qty? We thought it a good idea to offer a min qty value instead of min qty per item to try and establish a good relationship with the customer (i.e. min qty is £150 for overall order not 10 per item). Is this a good min value (£150)

Any advice would be warmly received!

Thanks

 

[SamStones]

Hi

It's totally up to you what you do and what works for your business. You could perhaps say a minimum first order of £300 and then a "carriage paid" order of £150 after that. With orders below this being accepted but with carriage on top. This should mean you're pretty flexible but also want a half decent order from them to show their commitment.

Hth

 

[internetspaceships]

Do NOT assume you have to drop by 50% to sell to wholesale.

It's your call if they are interest.

I'd start at something a lot less like 15% and then you have a bargaining chip.

Don't sell yourself short.

 

[k_los]

Great advice thank you, internetspaceships I like the idea of selling at a higher price as our designs are handmade and take a while, but I thought retailers always sell with a 100% mark up? All our retail prices are on our website and this customer will see that they wont make 100% if the sell at the rrp.

thanks

 

[sla3]

, but I thought retailers always sell with a 100% mark up? All our retail prices are on our website and this customer will see that they wont make 100% if the sell at the rrp.

thanks

But these guys aren't high street retailers with high street overheads. There may also be added value to them in including your range - such as addon sales, upselling yadda yadda yadda. Don't worry about THEIR margin, worry about yours!

 

You will need to talk to them a little more to establish what way they want to work with you, for example they may just want to list your products and order on an ad hoc basis as and when they get orders (even a dropship option maybe), so if you set a minimum order qty, etc, this would put them off.

You already have the stock, and it will cost you nothing more, so do whatever it takes to get them to list your products on their site and promote them, it can only be positive for your business.

Do you want them to sell at the same price you do retail? Or are you happy enough if they set their own prices? Give them a discount of say 20%, and let them work from that, it should be adequate for an online retailer really, 50% is way too much to be disconnting your products by...unless they are buying in bulk quantities.

Be flexible, and see how the conversation goes. If you think they could be a good retailer of your product, then loosen the leash and let them sell......nowt to lose really.

 

[Esk247]

The more they buy the cheaper it gets, try and get them to buy in bulk quantities but WARNING be very aware that by stepping in to the world of wholesaling you can damage your own customer base. Do the maths and remember that they are a customer for your wholesale but a competitor at retail level.

I've seen companies competing with themselves, they sell wholesale and the buyer just undercuts them on all their products. So make sure all your margins are correct and as mentioned don't go in at 50%, you'll end up with nothing in the way of profit.

One wholesale company i deal with only give 10% discounts to trade customers, it works out easier to buy their stuff retail sometimes because you can buy in smaller quantities and their products are slow sellers.

 

[k_los]

Thanks everyone we decided to offer 20% and are now in negotiations for bulk prices! You have all really helped, thanks.

 

[Multi-store]

Do NOT assume you have to drop by 50% to sell to wholesale.

It's your call if they are interest.

I'd start at something a lot less like 15% and then you have a bargaining chip.

Don't sell yourself short.

SPOT ON, DONT SELL YOURSELF SHORT