Honestly, they’re probably sending a check to Belgium...
Small update: got their check today in my mailbox (indeed, in Belgium).
Dislike ads? Remove them and support the forum:
Subscribe to Fastlane Insiders.
Join over 90,000 entrepreneurs who have rejected the paradigm of mediocrity and said "NO!" to underpaid jobs, ascetic frugality, and suffocating savings rituals— learn how to build a Fastlane business that pays both freedom and lifestyle affluence.
Free registration at the forum removes this block.Honestly, they’re probably sending a check to Belgium...
Have you asked them what price they need to make the order work? There may still be enough profit for you if they're going to place six-figure orders, even if the profit margin is slimmer.I've been turned down now multiple times by big hardware stores (Menard's, Home Depot, etc.). I offered the same product at the same suggested selling price, with about 35-40% profit for them.
But apparently it's not enough for them. They say they get their products at a "significantly lower price".
I suppose those big players order lots of products at a very low price. Will aim on smaller players in the market now.
Have you asked them what price they need to make the order work? There may still be enough profit for you if they're going to place six-figure orders, even if the profit margin is slimmer.
@Scot
If you had a product that retailed for $7.49, what would your wholesale price be, for one unit?
Mind you, the cost of production is $1.21
She was able to get about 200k in orders (mind you she had no inventory...I don't recommend doing this but it worked for her) her customers were a little pissed that it took her 30 days to get their order to them but today she is doing 5-7 million in revenue per year
Depending on how aggressive you want to be, and how badly they need your product, you can also implement a penalty if payment isn't in hand in 30 days.Net terms suck
So, my Hy-Vee account, our net terms are 30 day, but they seem to be paying me at 45 days. Which, as you can imagine for cash flow, is killing me.
While speaking with my broker yesterday, I asked him what terms he expected. For independent stores, net 10 days. This took me a bit by surprise.
He then explains for bigger accounts, he does 2% 10 Net 30. Which translates to, if you pay me within 10 days, you get a 2% discount. If not, you owe me the total balance by 30 days. This incentivizes then to pay early. Im going to try and work this (or a similar deal) out with Hy-Vee’s accounts payable Dept.
I know a potential market for your product is convenience stores/gas stations, so @MidwestLandlord might have a better idea. As far as adult stores, I don’t have a clue what expected margins are.
Net terms suck
So, my Hy-Vee account, our net terms are 30 day, but they seem to be paying me at 45 days. Which, as you can imagine for cash flow, is killing me.
While speaking with my broker yesterday, I asked him what terms he expected. For independent stores, net 10 days. This took me a bit by surprise.
He then explains for bigger accounts, he does 2% 10 Net 30. Which translates to, if you pay me within 10 days, you get a 2% discount. If not, you owe me the total balance by 30 days. This incentivizes then to pay early. Im going to try and work this (or a similar deal) out with Hy-Vee’s accounts payable Dept.
I can hopefully get a 5-10 new customers out of this with relatively little work.
Surely you don't mean 5-10 new locations after all that?
I'm running about an 80% success rate on new retailers, in the same general category. I get 8 of 10 I approach. I'm selective on who I approach though.
So...in an area your size, you should gain much more than 5-10 locations (assuming you approach retailers that are a likely candidate, which may be hard to know without physically visiting the location first)
3 states, approaching mom & pop grocery, I would think more like 50+ locations gained. (let's say 10% of 500 total approaches to account for the type of marketing you are doing...i.e, not in person)
Also, your closing rate should increase as you adjust who you approach AND adjust your marketing to include the success your brand is having. The more locations you have, the easier it is to gain even more. (it's far easier to get your 20th location than it is your 2nd)
I only expect that from a lazy automated email campaign.
Once I start sitting through the list and building a targeted calling campaign, I definitely expect the close rate to go significantly higher.
Crazy useful thread!
Applying all of this to my online store now
I'm going to follow the same process as you with the automated emails, except I'll send them out manually, purely because of the MailCheat(Chimp) footer, as well as I have very few stores to reach out to (+-15).
I'd like to know your opinion on the footer? It seems against mail chimp TOS to scrape emails, as well as it being VERY obvious to the person you're sending it to that it is an automated email. Going to investigate other options for this.
(I've deleted out all sensitive information, but it lists your email address and your address in the footer aswell)
View attachment 21527
My flow will probably follow this:
- Manually send out a templated email to stores.
- Schedule follow-ups (following your MailCheat(Chimp) flow) using a CRM
- Stores which show interest / buy wholesale will be added to a MailCheat(Chimp) list for promotion, education, media etc.
- Call all stores at the end of the flow, whether they show interest or not.
As far as MailCheat(Chimp)’s TOS.. what mama don’t know, won’t hurt her. Since you’re sending to 15 ish emails, the odds of one or more reporting you for improper emailing are super rare.
If you dumped 1,000 emails, yes.
However, plain text emails may not be a bad idea either. An app like boomerang for gmail sets auto reminders to follow up. It all depends what you want to send via email.
If your end goal is a phone call, using emails to make this a warm contact, then I’d just plain text via regular email.
As a follow up to that, I only expect this email campaign to have a 1-5% conversion rate. This was simply a “do a few hours of work for low hanging fruit.”
If you only have 15 targets you’re going after, you should be picking up the phone or going in person if you really want to convert these
except I'll send them out manually, purely because of the MailCheat(Chimp) footer, as well as I have very few stores to reach out to (+-15).
Im creating a new wholesale information sheet, and confused as to what terms to use.I can only speak for grocery stores. Different store types want different margins.
$4.86 direct to store (delivered) - 35% margin for the store
$3.40 to distributor (delivered) - 30% margin for the distributor
I know a potential market for your product is convenience stores/gas stations, so @MidwestLandlord might have a better idea. As far as adult stores, I don’t have a clue what expected margins are.
Im creating a new wholesale information sheet, and confused as to what terms to use.
Are there official terms for:
- Wholesale Discounted Percentage (the % that the product is discounted by)
- Markup Margin (% margin for the store)
?
what is MAP?I've got 5 columns: Wholesale, Retail (or MSRP), MAP, Profit, and Margin.
Really all you need to get started is Wholesale Price and Retail Price.
Usually it's minimum advertised price. Keeps your retailers from undercutting each other, and maintains your brand's image.what is MAP?
Join Fastlane Insiders.