Advice needed. . .

[Flickering Dream]

I could use some advice on presenting my candles and pricing list to wholesale purchasers. I understand how to calculate the wholesale price, what I'm looking for is advice on how to present the information (pricing) to the potential wholesaler purchaser.

My thought is to show them a graph listing the suggested retail price, wholesale purchase price and their profit margin for them to look see actual numbers. Am I on the right track?

Also what kind of profit margin have you found the retailers like 45%, 50%, or more than 50%?

Thanks, Tom

[brudil18]

Its been my experience that the 45% - 50% range is what a wholesale accounts really want to see on the gross profit % for them to bite. In any other business avenue a GP% of 35% would be spectacular, but for some reason when it comes to candles and small shops that we tend to deal with, a higher GP% is expected.

I have an excel spreadsheet to show the Gross Margin Data for them and then they play with it and tweak it according to what they may want to sell them for. I do give them a suggested retail price, but I do have a few accounts that sell above that and have increased their margins accordingly. Everyone seems to be a little different - some look at the Gross Profit % and others only care about the Markup %. Either way its a simple way for potential accounts to see the numbers upfront and make a decision.

Here is what I have on my spreadsheet (just showing my formulas as all these are actual numbers on the spreadsheet):

Selling Price $suggested retail price

Cost Price $your wholesale price

Gross Profit $selling price - Cost price

Gross Profit % $selling price - cost price / selling price = ??%

Markup % $selling price - cost price / cost price = ??%

Hope this helps a little

Bruce

[Craftedinthewoods]

In my experience, shops and nicer gift stores do a 100% markup on wholesale prices. I have around 15 stores that order regularly (a couple are more seasonal), but none of them ever asked me to show them their possible proffit margins. Most don't even ask me what suggested reail is. They have all sold candles before and know better than I did what they could get for them from their custoemrs. But, you might need to try using a spread sheet and see if it works for you.

How I approach a store owner is with a brochure, business card, wholesale price sheet, and order form along with a travel tin candle. I ask for the owner or person in charge of buying and if they are not there leave the papers and candle for them. I'll call them in a day or 2 to set up an appointment to meet.

If they are there (in small shops the owner is usually the one behind the counter anyway) I'll introduce myself and explain that I make candles and if they are interested I'd love to meet with them sometime to show the candles. (this lets them know you appreciate they are busy and don't want to just pop in on them uninvited.) But after seeing my little tin (it's cute) they will usually say "do you have any sample with you?" Well yes, I do happen to have my sample boxes in the car (I always take them along when approaching stores), I go get my candles and poof, we are having a meeting.

Also, don't always take no for an answer. Just a month ago I secured an account with a store who has been telling me no for 2 years. The first time she said no it was because she already had several lines of candles in her store. But I would stop in every 4 to 6 months and reintroduce myself, saying I've chatted with you before about my candles, but just wanted to check if anything has changed for you. No, no, No.... well, just 2 months ago I make my treck into her store and gave her my shpeal... well she smiled and said I needed to call her in March. Which of course I did and then she ordered over $200 in candles!

Sorry I'm so long winded about this, but I feel like sharing with others who are wanting to approach their local stores & shops too. Do it... It's a fun challenge, and so worth it when you get a "yes"!

[Candybee]

Isn't a 100% markup equate to a 50% profit? If I sell candles at wholesale for $5 and the retailer marks them up 100% doesn't that mean they sell at $10. Isn't the profit off the candles they sell 50% since they paid $5 per candle? Or am I confused.

[Flickering Dream]

Thank you all ! That is exactly the advice I needed. My wholesale pricing falls in the 48 to 52% profit margin with the suggested retail prices, and the candles have sold for more so pricing is up to the retailer.

Brudil18....sounds like we have the same spread sheet. Mine shows the same categories.

Crafted...I understand what you are saying about not giving up and revisiting the store.

Candybee...yes, a 100% markup equals a 50% profit margin.

Thanks for the information.

Tom

[brudil18]

Candybee you are correct. Some people like Choclate ice cream others like Vanilla, its all still ice cream. Some people talk in terms of profit margin % and others markup %.

It all still means the same to me, but people like what they like especially when it come to numbers.

Craftedinthewoods is correct as well, Shop owners know there shops the best and they will know whether or not your candles make sense for them regardless of any % thrown at them. Just go for it and try. It really is a lot of fun. Crafted is right, your no less for having tried and there really only is an upside and thats a new customer.