How do set up an arrangement with a shop that whats to offer my product

dippydan

Hi every one! first post on here! i've been making baby gifts for about 2 months now and a local florist has said to pop back on saturday about having one or two in their shop but i don't know what i'm mean't to do and i don't want to look silly!

Can any one offer any advice?

Would i be expected to offer some for display for free and then ask them to take orders on my behalf and offer them a cut? and then how much is a reasonable cut? 10%? 20%????

or

Do i offer them a deal to buy a selection of cakes at cost price plus a little bit for me?

thanks guys

Pennywise

I think the shop will be expecting more profit than 10-20% - I'd suggest they'd be looking for more like 25-50% for relatively slow moving stock items, especially if they're going to take up a decent amount of space in the shop. They aren't going to want to risk buying some from you, and risk not selling them, for any smaller profit percentage, especially if they have to provide and pay for any display racking/cabinets etc.

It's all negotiable.

You could try to get away with a lower profit by offering them on a sale or return basis, so they have no risk at all. Say, 15% profit in exchange for risk free sale or return basis.

Same idea with providing them with display systems - if you pay for them, you can expect them to accept a lower profit margin, but if you want them to pay for them, you will have to give them a higher profit opportunity.

Also look at it from another perspective. What is a realistic selling price compared with your costs of producing them (inc all overheads and your time! The "middle man", i.e. shop's profit should be comparable to your profit. It's no use offering random percentages if you won't make a decent profit just like it is no use setting the selling price so high you'll never sell any or so low that no-one makes a decent profit.

dippydan

Thanks - i see what you mean so maybe I will look at offering 2 deals 1 margin for purchase with a no sale return and one for displaying and just taking orders

Thanks so much - i feel a bit like the apprentice! trying to sound like i know what i'm talking about *LOL*

GiveItBack

The thing is, I'd start up front by saying something along the lines of 'so what are you thinking'? Anyone who won't tell you their idea to work with you is not to be worked with.

You might find that they're actually simply trying to help expand their appeal to customers, by offering complimentary products (products that will appeal to their customers too).

I'd expect they'd be looking not to buy from you and sell on, but to take a commission on what they sell. This kind of relationship can work well, as (depending on how you sell), you could do the same with them.

There are a lot of potential ways to develop this, but for example, sharing of customer lists (or better, you each contact your own customers with a special deal from the other person)

You could also work on packs or bundles of products to sell combining yours and theirs (in which case you'd need to work out how much each of you would put in and get).

Know your prices, and the kind of money that you could offer off if he wanted to buy from you, in bulk or bigger amounts, but probably, I'd push for this kind of thing.

paulwf

Could you please give us more details on your products - are they mostly made to order, how many items are in your range, and do they have an expiry date? With a few more details the MSE collective might be able to come up with some more ideas to add to the ones above.

dippydan

Thanks gang! x