Dana Posted January 5, 2007 Share Posted January 5, 2007 I have been searching for an answer for an hour now, time to give it up and just ask! I am in the process of getting this private label account with a big store in a town 25 miles away. She says she can't purchase from me unless she doubles her money. OK, I get that. But she also says that I can't sell my candles on my website for less than hers. Now if she is going the private label route, doesn't that make her company candle her own, and my company logo/label mine. If I don't put any contact info (of mine) on her label, why can't I sell my candle for less if I want? My DH says it's gouging (sp?), but I say it's two separate businesses. I tell him that you can buy a can of Lysol for $3.95 at one store and $4.75 at the next. This wouldn't even be the exact same candle, because of the label. I can't get the price at shows etc. that she can in her upscale store. Plus, it costs me $2.50 to make her candle. If I sell them to her for $4.00, I am only making $1.50 per candle. She is making $4.00, because she retails them for $8.00. I told her I would private label for free, since she has her logo all ready. If we have to keep the prices the same, should I lower my wholesale cost to her, which will lower her retail cost, which will allow me to sell mine at a lower retail. Say, sell to her at $3.75, retail at $7.50. I think I could sell them for that. I was just having trouble selling them at $8.00. I would then have to lower my wholesale cost to my other accounts as well, so those would be the same. My profit isn't that great with wholesale accounts anyway,(especially with increasing shipping costs!) so to lower them so I can also sell them at shows is my burning question. Make even less in wholesale, so I can turn a decent profit in my retail. I don't think I should have to keep the retail prices the same as hers. What do you all think? Sorry so long-winded! Quote Link to comment Share on other sites More sharing options...
jldorrington Posted January 5, 2007 Share Posted January 5, 2007 IMO and take this with a grain of salt cause i really don't know what i'm talking about.... but, since its private label your info will not be on it correct? so what does it matter if you sell the same candle on your site for $5 or $50 their her candles once she purchases them from you if she wants to double or triple or quadruple her money thats her but you are not part of her company (so to speak) so she cannot tell you how much to charge for your candles. and honestly if she's gonna try to tell you how to run your business then you prob don't really want to deal with her Quote Link to comment Share on other sites More sharing options...
prairieannie Posted January 5, 2007 Share Posted January 5, 2007 You have the upper hand here. You are the one who sets the rules, not your customers. This is your business. She can surely ask, but you can surely say "No, that will not work for me, I'm sorry" Firstly, you are selling yourself short right out of the gate for taking less than a double on your cost as a wholesale price. You need to be getting at least 2x what you have into the candle, it's important for your bottom line. I understand the importance of getting your candles out there, and I applaud you for doing it without resorting to consignment, however, it's also important that you not let her call shots that are going to harm you at every turn. In my opinion, if you are giving her a private label, then that's as far as it goes. You sell YOUR label for whatever price you deem appropriate, and if she does not like it, then she does not get the priveledge of selling your candles in her store. ESPECIALLY if your web addy and business name is nowhere to be found on her labels. Make this clear before you sign any type of contract with her.. or before you even sell her her first order of candles. Please don't sell yourself short here, if you do, you will be asking yourself if it's worth it in no time flat. Ask yourself.. How fair is it that SHE makes double on YOUR candles and YOU don't? Not very! If you believe in your product, then don't sell it short. We're not talking that much money here. Besides, she's already getting a HUGE deal from you twice.. once with the FREE private label, and once with the low wholesale price. TOO low imo. Don't cave on this one.. follow your gut! Quote Link to comment Share on other sites More sharing options...
BarbaraC Posted January 5, 2007 Share Posted January 5, 2007 No store or private label account is worth this much trouble. Do not change your prices for anyone if it cost you 2.50 to make a candle charge $5. You just got to love it when people try to tell you how to run your business. Also on a Private label you still need your name somewhere to be covered by insurance. Quote Link to comment Share on other sites More sharing options...
Dana Posted January 5, 2007 Author Share Posted January 5, 2007 I wasn't told that by my insurance guy. Hmmm.... doesn't suprise me. Well, if I just put my company name, no address or anything does that cover the insurance part and destroy that separation from the two businesses? Those of you who wholesale/private label/ and retail what do you do about your retail prices? They can run a sale anytime they want and undercut my prices right? I am rethinking the wholesale game. It is an awful lot of work for much less pay. Maybe I will just stick to my retail business! Quote Link to comment Share on other sites More sharing options...
Abbiepql Posted January 5, 2007 Share Posted January 5, 2007 I have 5 very lucrative private label accounts and while I admit they can be taxing, they can also be very profitable. First of all - according to my lawyer and confirmed by my insurance company (Erie) my company name must be on every candle I sell. I do this with the simple line " XXXX (my biz name) candles, made exclusively for YYYY (their biz name). I also list them on my insurance policy as a rider (don't know correct term). They are in charge of labeling, not me. I only adhere a warning label and all necessary information is on there. Secondly, I have strict minimums that my customers have to take into account when ordering so I don't end up being nickled and dimed. I don't tell them what to charge, although I give them my retail price as a guideline. None of them sell as cheaply as I do, their markets are much different than mine. Although I undercut them price wise, I am only a threat if a person wants to order online, and that has associated costs and restrictions they don't have selling my stuff cash and carry! So that has never been an issue for me. Quote Link to comment Share on other sites More sharing options...
grama Posted January 5, 2007 Share Posted January 5, 2007 I do private label for 2 companies and I just put the warning label. One co I do make the labels for them and just put a small oval label on back of jar with my co name & etc. The other co I just put the warning label on. This co I "created" the scent for her and I don't make that for sale on my site. With your customer can you just rename the scent that she is buying? Oh, that reminded me, I did have another co that I wholesaled to and they renamed the scents. So they could charge what they wanted to because nobody could buy that certain scent from anyone but them. Not sure I'am making sense. Need another cup of coffee ( 2nd pot so far!) Quote Link to comment Share on other sites More sharing options...
SliverOfWax Posted January 5, 2007 Share Posted January 5, 2007 Unless something has recently changed, the law says your contact information must be on the label. There is no way a customer should ever try to tell you what you can sell your candles for. It's none of her business. She runs her business, you run yours, plain and simple. Quote Link to comment Share on other sites More sharing options...
blazerina Posted January 5, 2007 Share Posted January 5, 2007 She is not buying into your business...only taking from it and she only gets what she pays for for goodness sakes, lol.... and from the prices spoken of...naw, she don't own you. Quote Link to comment Share on other sites More sharing options...
cindym Posted January 6, 2007 Share Posted January 6, 2007 Here's the deal, if it cost you 2.50 to make the candle then you should charge her 5.00. She is not the boss of you, sorry had to say it. That is a bad business decision all the way around. Also you might want to point out to her that you can and will charge less on your website but you would be happy to say , if you would like to buy my candles locally please go to such and such a store. I actually do several privat label accounts and I charge them more than I charge my accounts that use my label. Quote Link to comment Share on other sites More sharing options...
clonefan80 Posted January 6, 2007 Share Posted January 6, 2007 I was thinking the same thing PA was saying. Take it from someone who does nothing but wholesale....people will ask for everything and if they suspect you are "green" they will push even harder. I learned these lessons the hard way early in my biz. I don't have wholesale contracts. no need if they are buying. I have had a couple of companies wanting to private label which I said ok but....I will not private label using my candle names (my names are unique to my company theme) but since I print my own labels (as grama stated) offer them their own candle names if its convenient for you to do this. DO NOT compromise your price, if you start that now you will be sorry down the road, we are all in the business of making money. I realize you are anxious to get your candles in a store but trust me when I tell you if all you are doing is compromising you will win nothing here. I have a brochure with my wholesale prices listed. People will ask me all the time, if I order more can i have a discount, my reply is "my prices are already their rock bottom lowest" and leave it at that...don't keep saying things cause it only causes you to stammer and backpeddle. Here's an example of something that happened to me this past August, a huge account contacted me about my candles, because they were big I sent them a few sample candles (which by the way I rarely do). They had a meeting, liked them but wanted to know if I would private label using their label, my candle names...wow did this put me in a precarious position. After much thought I called the buyer and said I would "consider" this with a contract that stated if they decided to purchase their candles elsewhere they could not use my names (now mind you I stated earlier that I didn't use contracts but these guys were big and I soooo wanted their account). I also told them I would prefer to use my own label. Well months went by and I wrote it off and figured they just decided against buying from me. Well (i know long story) in November they called and were ready to order....the account is the Grand Ole Opry.....i was flying...! They are not my biggest account but wow does it feel good puttin' that on my website for retail locations....seek a compromise with the name thing, maybe she will be happy since no one will be able to buy them elsewhere or even on your website....good luck Quote Link to comment Share on other sites More sharing options...
Dana Posted January 6, 2007 Author Share Posted January 6, 2007 There is another reason why I am considering lowering my wholesale price. I have had a little competition lately with a company that offers the same size jar for only $2.75! I don't know how they do it. I buy the jars by the pallet, the wax in 200lb. weight, the oils in 5lb. bottles. I can barely get MY cost to that and that is their wholesale price! Even if they don't pay ANY shipping it would have to cost them more than that. Now I know they are not doubling their money. They would have to make that candle for $1.37! NO WAY! I even had a client give me one to try out. It was actually very good, although I suspect some paraffin (no frost, at all) and it is labeled soy. They also offer private labeling. This store carried the competition candle through Christmas and sold out. I came along (actually I was at their outlet store) and noticed they didn't have any soy candles, so I approached them about mine. I happened to have a 28oz. in the car that day, so I gave it to them to try. I few days later the owner called me and said she really loved it and thought it was very classy with how I dress them up and she would be interested in carrying it. That is when the discussion started about my website and craftshow prices. So I have the competition to worry about too. Quote Link to comment Share on other sites More sharing options...
Dana Posted January 12, 2007 Author Share Posted January 12, 2007 I just wanted to add some closure to this topic. I had a meeting with the owner and she agreed to the $4.00 wholesale price on the 8oz. as long as she also purchased the other larger sizes I offer. We also agreed to never advertise more than a 25% sale. This way she can have a sale anytime she wants and I can mark them at that at a show if I want. It all worked out! I make a little less on the 8 oz. but the other 3 sizes will make up for it. They also have a beautiful wooden cupboard to display my (their) candles on. I was shocked at how prepared they were! I actually think they already decided they wanted them before I compromised on the price. But hey, now we will make more $ because of the prominent display. I am glad I thought it through and had all of your input! Thanks! Quote Link to comment Share on other sites More sharing options...
blazerina Posted January 13, 2007 Share Posted January 13, 2007 Congratulations! Sounds like it will be a wonderful account for you. I'm still not sure why she has 'any' say over anything you do, but that's not the point anymore, lol. I'm just glad you got it worked out to YOUR satisfaction. If you mark something down at a show, the price is not 'advertised' right? So it's all good, lol. Again, congratulations. Quote Link to comment Share on other sites More sharing options...
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