Pricing, Market Research & Bad Reactions

[niftyg]

In my quest to getting a product into stores, I have ran into a problem I didn't expect to be as much of a problem.

MSRP and pricing.

I have contacted a few retail stores trying to research average profit margins on my type of product. My goal is to provide the retailer a better profit margin than any other brand if possible,but it is very hard without a baseline.

To my surprise my first two leads didn't take kindly and that I was wasting their time.

Am I maybe not getting my point out clear enough that this is to benefit them and their industry?are these out of the question to ask?

Would I be better off trying more cold emails, or going straight to some market research experts who may already have the information. Keep in mind I am operating on a razor budget, for something at this stage I am only speculating will succeed.

Halp guys



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[Bigguns50]

If I understand you correctly....you were asking retailers how much profit they make on a product ?
If I were the store, I would not want to tell you this and may be offended that you asked.
Can you get some numbers together, make an offer to them and see how they respond ? They should tell you if you are too high or not.

 

[DrkSide]

What is your product niche and what type of stores are you trying to get into? This can change the answers. I am in a small retailer and their retail price is double my wholesale. My wholesale price is double my cost as well.

 

[Bigguns50]

@DrkSide. Yep... From what I've seen, that's typical.

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[niftyg]

Where I am at without research is to sell it for $50 to the retailer, MSRP for $100, so they make double (minus shipping to them). After all my expenses I am making about $20 per item.

My niche is adult toys.

I can see how it can be offensive. NDA's and such. I'm going to need to find out the going rate because that's one of my angles of being desirable.

 

[XOthermic]

@niftyg Hmm... How far along are you on this? It shouldn't be that hard to ask what the margins are one "competitor" products in your industry.

Call a store and say (with ultimate confidence), "hey its Niftyg with "popular adult company name". We want to save you money on your "insert your product category here". What is your wholesale cost on them, just a ballpark yeah?? Great!! What if I can get you a "insert product category name here" that can also do "insert your benefit here" would you be willing to pay $1.00 more??
No store would feel offended that I called. If you sound like a deuce on the phone then there going to be pissed. Make the conversation about "helping them". It's like rule #1 on how to win friends and influence people.

anywayssss

Retail stores are often looking for a 45% margin or around 50%. There for if they buy at $5 they want to sell at $10.

FOR YOU. I can already see in your future. This is a race to the finish/ volume game.

You need distribution to sell to all these adult stores and massive production to reduce your costs. Otherwise you'll just be a niche product that is overpriced and just out of reach for the masses of adults who like there toys.

time to find out what separates you.

 

[mars]

I can tell you the key word to retailers is 'keystone'. If you make your clients anything over 50% they will jump at it, but if your product is that good with great branding, they are generally OK with anything over 30%. Also, must retailers want really good terms...discounts at a certain order total ( $5,000 order = 10% discount) and net 30-90 to pay invoices.

@XOthermic cool pic bro.

 

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[niftyg]

My product it's self isn't something revolutionary, but it is a a great product. If I can't get more information I'm running with my 50% margin for the retailer.

It just came upon me too - hire a VA or outsource the research??

This product coupled with a great warranty, a return credit program (they get credit for returned units they destroy) and a 30 day money back guarantee (on my end, or the stores if they so desire) and finally a great price, is hopefully going to be my golden ticket. If not... at least silver!

and yes XOThermic it's all about volume... at least on this product.

Thanks for the advise so far everyone - it's reaffirming my estimated margin isn't too far off.

 

[mars]

Are you selling the product yourself? Why not use that to find out more data...some real customer data and feedback. I'd outsource the research, unless you really like that type of work.

 

[Bigguns50]

@niftyg ...PM me. I have a connection and work with 4 classy adult stores. All one owner. I'll get some info for you if you want.

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[RogueInnovation]

I'd take a look online, and scout stores nearby. Then introduce myself as connected to x products, and tell them I am curious about what they pay wholesale and what made them choose that option. Then I propose what possible benefits I can bring, see how they feel, and then ask how many they can sell if you give them x discount.

I'd then buy something, so they know I'm no prude and that I'm around to help them make more money

Price comparatively, plus benefits, as per precident and past successes. Give a compelling offer to get in the door. Talk to guys that own chains, but be ready for them knowing their toys
Understand where they stand to make money, and where the risk is, and advantages of your offer, and be compelling with a sense of thrift and clear vision.


I used to walk into some places, and get confused by staff as a manager or exec by being authoritative like this. Just last night I went to a boat show and talked with the event manager who took me through some of the backstage. Create that rapport and be clear and they will open up.
Toe to toe they are rough, but when you get them open they grease the wheels and help you get the pic, cuz its free and stands to benefit them or provide opportunity for relief.


Can you stock your product on anyone's online stores?
Just think and extrapolate paths of greatist outcome, and assume that people are reasonably interested in making money in that sensible way and you won't get MAJORLY shafted by spending the time and effort to geniunely reach out and guage their level of interest.

If they are interested strike while the iron is hot.

 

[pro]

Sounds hard.

Maybe you're getting shafted? Pricing isn't everything. Reliability and branding can trump margins

 

[niftyg]

Fantastic replies everyone. Thank you.

 

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[XOthermic]

@mars yeaaaaa!!! I'm all about it except when I'm not about it. #mountainmikepizzadays