Another type of business for me....

[cybersix]

Hi all, two days ago I got an email from a lady I had heard long time ago, she was interested in reselling my products but she had a shop, so her final customers would have been individuals.

Now she resells to hotels, restaurant, herbal shops, and still want to resell my products.

Now, my question is. If my products go up in the reselling chain wouldn't be the final prices too high in case of a shop who in the ends sells to public?

I hope this makes sense. If I sell to her for 2x my cost, she should be able to resell to an herbal shop and make a profit. Same for the shop, they must make a profit.

I still have to make a profit too, I'm wondering what I should do in a case like this. Some shops refused to resell my candles because they are too expensive if they have to make a profit on them.

I don't care for it, I know my candles have a value, but when there are three passages in the chain.. How would you do?

Also, she's asking to become an eclusive reseller for the city and maybe for the entire region. I don't know if it is a good thing or not.

Any suggestion would be really appreciated.

TIA

[Vicky_CO]

The profit rate is different when you have a rep and that is what she would be. You would give her 10 to 15% off your wholesale price as a rep make sure your product is being shipped to these stores and not directly to her.

She really becomes just a middle man but when you are talking wholesale accounts her profit is different.

When you sell to a shop directly they have expenses a rep does not, a lot of overhead that eats in to that difference between what they pay and what they charge the consumer. A retail store is only making 15 to 20% after overhead on each product if they are lucky, some stores do not even make that but they are usually stores that do high volume so they make their money from selling a lot at a lower profit.

[cybersix]

ok so you are saying since she's middle man she should have a better discount, right?

Also, I don't want to give her any exclusive, since I sell through my website I don't want to complicate my life, I want to be able to sell to her customers if they come directly to me.

Could this be ok?

[Vicky_CO]

No not really what you give her is this, your candle retails for $10 wholesales for $5 she would get 10% to 15% of the $5 not the $10. The end customer get 50% of your retail.

Little example

Retail order

$500 - 50% = $250 The wholesale cost to retailer

$250 -10%= $25 this is what your rep makes

You make $225

That is a way to keep your wholesale prices down if you are wanting more control of the end price if not then wholesale the candles to her let her add her 10% to 15% to the order and sell to the retailer. They would still be getting 35% to 40% off of retail.

Like this

$500 - 50% = $250 what you charge this lady

$250 + 10%= $275 this is what she would charge the retailer. She would keep the 10%

Does that make better sense? If not I can try and explain it better. What is in head does not always translate well to written word.

[Vicky_CO]

Also, I don't want to give her any exclusive, since I sell through my website I don't want to complicate my life, I want to be able to sell to her customers if they come directly to me.

Could this be ok?

Do not give her exclusive right but if her customers come to you, you should direct them back to her. It is her hard work that got them as a customer to begin with to cut her out down the road is not right.

[cybersix]

Hi Vicky, thanks so much for trying to explain it to me.

I guess I'd like the second option better.

Infact she asked what she should resell the candles to her customers to me.

I was discussing this with my BF and he adviced to sell to her at my usual wholesale price and let her decide what to resell for. Does this makes sense? I think this would be the easiest solution, she can profit what she's able to resell for, right?

Thanks!!!!

[cybersix]

Do not give her exclusive right but if her customers come to you, you should direct them back to her. It is her hard work that got them as a customer to begin with to cut her out down the road is not right.

Yah you're right I mean if one customer of hers comes to me and I don't know he's her customer I'd like to be able to sell, but if I give her exclusive I won't be able to sell in that province!

[Vicky_CO]

If you use the second option it would not make any difference to you who they bought from you would still make the same money and she would have the headaches of dealing with them.

If you give her rights to an area make sure it in writting and that you both sign and I would put in some kind of clause about customer service something to the effect if a customer comes to you with a complaint about customer service on her part you have the right to sell to them direct.

[cybersix]

If you use the second option it would not make any difference to you who they bought from you would still make the same money and she would have the headaches of dealing with them.

would this be a bad thing?

I'm completely new at this, so really i don't know what to think.

Also my instinct tells me not to give her any rights for areas, but then again, I'm a first timer and I could miss some basic point.

[Vicky_CO]

Most sales rep want an area mainly so no one else can steal there customers which can happen.

Example Anchor hocking if I want to buy glass from them I have to go through the Denver Rep unless I for some reason can not get a hold of the rep. I have only ordered through AH once the rest of the time has been through their reps and when I call them they give me a number to my area rep. even if I say I am ready to order right now.

Do not give them a large area, smaller company reps will have like 100 miles area or even a state but do not get the whole country.

I have thought about reps a lot and thought I would give them counties here in CO there are like 64 counties and I would give each rep 2 to 6 adjoining counties depending on the size of the counties and the poplulation. But areas like Denver no one rep could have it 2 could share it.

If I ever get big enough for all this thinking I have done would be great. LOL