You’re not selling wholesale?

[Scot]

@Vigilante I wanted to tag you on here as well. With your past life experience as a corporate buyer as well as selling wholesale at your last business, you probably have some awesome and unique insights.

 

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[Vigilante]

To commemorate my 50th thread on the Fastlane Forum, I wanted to share a topic that is very core to my business.

It’s a simple concept.

If you sell on Amazon, but not wholesale to other retailers, you’re throwing away millions of dollars.

Let’s look at this.

View attachment 19709

On this pallet is 900 units. This sale took about an hour worth of work. To date, I’ve sold 800 units on Amazon.

Let that sink in for a minute. In about 2 weeks time, with about an hour of actual work, and 37 short emails back and forth, I sold more unit than I did on amazon over 3 months time.

We talk about how Amazon is killing Brick & Mortar, but that’s simply not true. Wal-Mart, Target, Auto parts stores, grocery stores, clothing stores, and many others are not going anywhere anytime soon. And hundreds of millions of people shop at them daily.

Would you rather sell on 1 Amazon site or 5,000 Walmart stores?

Wholesale is the Scale part of the equation and if you’re not using that multiplier, you’re missing out.

Lastly, amazon businesses for sale on business broker websites are a dime a dozen. And multiples aren’t all that healthy. But one thing that does improve a multiple and more money on an exit, is a wholesale channel to your business.


Evaluate how your products can be sold to B&M. If you think your product is too generic to be sold in a store, it’s probably too generic to be sold on Amazon. Think of who your customer is, then think of where they shop. Those stores are your customer too.

If this thread shows enough interest, I’ll dig in deep to how to enter wholesale, get customers, get distribution.

Pick up the phone and start dialing.

I LOVE this photo. I remember you smiling when you showed it to me on your phone, and I remember your wife's sparkle in her eye during the discussion. You knew you were on the edge of this finally happening. There's so much I could unpack just within the frame of this photo itself, but people would be so wise to understand the whole story behind the journey that made this photo possible that I am taking this thread now to (at least) notable so that people have the opportunity to discover your story through looking deeper at that photo and discovering the path that lead you here.

I will read through the thread later today and post some comments.

 

[Cat Lady]

I am so excited about this thread! I have a book (think more "airport gift shop book" than "barnes & noble book") that I am hoping to approach Urban Outfitters, Anthropologie, and some smaller gift shops with. I hadn't thought to pay a VA for this stuff.

Apparently Anthropologie does all their non-clothing buying per store so I'm trying to go local first to build credibility. Any thoughts on that?

 

[Scot]

I am so excited about this thread! I have a book (think more "airport gift shop book" than "barnes & noble book") that I am hoping to approach Urban Outfitters, Anthropologie, and some smaller gift shops with. I hadn't thought to pay a VA for this stuff.

Apparently Anthropologie does all their non-clothing buying per store so I'm trying to go local first to build credibility. Any thoughts on that?

I feel like books are a high touch point item, think book signings. These will get reorders.

The first and simplest way would be to get a google maps scraper and start building lists of every Urban Outfitters, Anthropologie, gift shop, Hallmark store, and mom and pop book store. Once you build that list.... Start dialing for dollars. Get a good CRM like Hubspot to keep track of your calls and contacts. Some stores may need multiple calls to get them to order. Call, call, call.

@JAJT might be able to chime in here. Books aren't exactly puzzles, but I know you've talked to distributors about selling them to bookstores.

 

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[Patrickg]

Are you hoping that a brand website will sell your product wholesale? Because it won’t. The only thing that sells wholesale is picking up the phone.

And selling on your website should always be viewed as a positive. It’s oroof of sales and brand loyalty.

The reason I ask is because I sell the product on my site currently. So I didn't know what your reaction has been regarding selling through your own site.

And no I don't hope the brand website will sell my product. More or less I was thinking I'd develop a standalone website to send dealers to as more of a brochure instead of my current product page.

 

[Scot]

The reason I ask is because I sell the product on my site currently. So I didn't know what your reaction has been regarding selling through your own site.

And no I don't hope the brand website will sell my product. More or less I was thinking I'd develop a standalone website to send dealers to as more of a brochure instead of my current product page.

I guess it depends on your industry. If the store chain wants an exclusive, sure that could be a problem. But unless that store is Wal-Mart, I’d avoid an exclusive.

I can’t really think of any indistry where a brand doesn’t sell on their website vs a store.

Where you may run into a problem is if you tell a store your MSRP is $19.99 in store, but sell it for $14.99 with free shipping on your website.

 

[exclusives88]

Why are you starting with the big fish first? Have you contacted local Ace hardware stores? They’re independent owners and can make store specific decisions. My local Ace is loaded with random crap that I know is local.

You know how many cases I’ve sold over email? ZERO. Every single case I’ve sold retail has been via phone. Even my big distribution deal was started with a phone call, the details finished via email.

Find a google maps scraper and start building lists of independent Ace Hardware, any mom and pop hardware stores, independent furniture stores. Call them.

As for the big fish. Call their headquarters and act dumb. “Hey do you by any chance have the contact info for the category manager of the widget section?”



Ouch. Yeah, you’ve got to drop those margins HARD. Because of the weight of your product, you’re going to get killed with shipping. My cases weight 14.5 lbs. I need to ship 4 in one giant box to get anything close to economy on my shipment, which is still $10/case. Realistically, you’ll need a distributor to do the lifting for you, but that costs margin. See if you can get your COGS down a couple more dollars through scale and you can probably survive the distributors cut. (I have no idea what expected margins are in your industry. If they’re 50+ % then, that’s going to be difficult)

If I am selling to a distributor, do I have to worry about shipping cost?

Based on your example distributor needs a 30 percent margin when they sell to retailers. Which means that I will need to sell for roughly a 55% discount. If my MSRP price is $29.99, I will need to sell for $13.50. This will work for me if the $13.50 does not include shipping.

How did you find the big distribution deal that you were referring to?

 

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[Scot]

If I am selling to a distributor, do I have to worry about shipping cost?

Based on your example distributor needs a 30 percent margin when they sell to retailers. Which means that I will need to sell for roughly a 55% discount. If my MSRP price is $29.99, I will need to sell for $13.50. This will work for me if the $13.50 does not include shipping.

How did you find the big distribution deal that you were referring to?

When you give your distributor a wholesale price, offer them two prices. FOB and shipped. FOB means they arrange to pick it up and is typically a lower price. Or, figure out what LTL will cost you and add that in. For example, I gave my distributor FOB price of $39 and shipped $41.50. My freight cost $190.

So, long story short, yes, your pricing needs to figure out shipping cost too. Good news is, if you’re sending to distributor, you’re sending a large quantity and shipping on a pallet is cheaper per unit.


How I found my distributor? I was selling to their stores and found out through conversation they had their own internal distributor. I called them and got the buyers contact. Wasn’t all that complicated.

The best way to find the distributor is to ask the stores you sell to who their preferred distributor is. Once you find a common thread, approach that distributor. Once they know you’re selling to their clients already, it’s a matter of making the numbers work.

 

[MoreVolume]

Good thread

 

[MidwestLandlord]

Or, figure out what LTL will cost you and add that in.

And shop around for LTL shipping prices. I've seen some LTL carriers be almost double what others cost. ($5.38 a case versus $3 per case)

It's also worth it to ask your LTL carrier if they are using the cheapest freight forwarder, the cheapest regional carrier, and/or the cheapest local carrier.

I'll give an example. One of the LTL's I did out of Canada had lined up a local carrier that was in my states largest city because it had easy access to I-29. That city is 323 miles away from me! Why would a local deliver that far?!

We figured out it was significantly cheaper to LTL to that city, regional carrier to my city, than local carrier to my warehouse (as opposed to the local running 323 miles. I ended up cutting out the local and just picking it up myself anyway)

I'm in a rural-ish area so I've had to get a little creative to keep shipping down. The point is don't be afraid to ask questions and flat out ask if there is a cheaper way.

Also, piggybacking might be an option too (where they throw the LTL trailer on a rail car) It's significantly slower but I've found it to be much cheaper, especially when only doing 1-2 pallets.

For example, I gave my distributor FOB price of $39 and shipped $41.50. My freight cost $190.

THIS.

So much this.

Give your distributors both prices. It is common for distributors to have access to cheaper shipping options than you do. Don't give me only a delivered price when I'm 90% sure I could get it shipped for cheaper.

 

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[silentownage001]

Loving this thread. I'm working on my first wholesale customer as well. I called yesterday and the lady took my message for the person responsible.

It's a local restaurant and I thought about walking in, but decided calling to set up a meeting was more respectful.

Best part? I was so nervous, but the phone call ended up being pretty easy.

 

[Scot]

Loving this thread. I'm working on my first wholesale customer as well. I called yesterday and the lady took my message for the person responsible.

It's a local restaurant and I thought about walking in, but decided calling to set up a meeting was more respectful.

Best part? I was so nervous, but the phone call ended up being pretty easy.

These phone calls go much easier than you’d expect. After my 3rd one, I had a script and routine down. Just dialed, said my spiel and 33% of the time, closed the sale.

 

[amp0193]

We figured out it was significantly cheaper to LTL to that city, regional carrier to my city, than local carrier to my warehouse (as opposed to the local running 323 miles. I ended up cutting out the local and just picking it up myself anyway)

So 3 truck companies and 3 shipping invoices, per shipment?

 

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[MidwestLandlord]

So 3 truck companies and 3 shipping invoices, per shipment?

3 companies, 1 invoice. The regional and local carriers are basically sub-contracted out by the LTL, so all invoicing goes through them (whether that's true in all situations I don't know, just how it's been working for me)

 

[amp0193]

3 companies, 1 invoice. The regional and local carriers are basically sub-contracted out by the LTL, so all invoicing goes through them (whether that's true in all situations I don't know, just how it's been working for me)

Ah ok, but you had to ask specifically for this to happen to make it cheaper.

 

[LynetteP]

To commemorate my 50th thread on the Fastlane Forum, I wanted to share a topic that is very core to my business.

It’s a simple concept.

If you sell on Amazon, but not wholesale to other retailers, you’re throwing away millions of dollars.

Let’s look at this.

View attachment 19709

On this pallet is 900 units. This sale took about an hour worth of work. To date, I’ve sold 800 units on Amazon.

Let that sink in for a minute. In about 2 weeks time, with about an hour of actual work, and 37 short emails back and forth, I sold more unit than I did on amazon over 3 months time.

We talk about how Amazon is killing Brick & Mortar, but that’s simply not true. Wal-Mart, Target, Auto parts stores, grocery stores, clothing stores, and many others are not going anywhere anytime soon. And hundreds of millions of people shop at them daily.

Would you rather sell on 1 Amazon site or 5,000 Walmart stores?

Wholesale is the Scale part of the equation and if you’re not using that multiplier, you’re missing out.

Lastly, amazon businesses for sale on business broker websites are a dime a dozen. And multiples aren’t all that healthy. But one thing that does improve a multiple and more money on an exit, is a wholesale channel to your business.


Evaluate how your products can be sold to B&M. If you think your product is too generic to be sold in a store, it’s probably too generic to be sold on Amazon. Think of who your customer is, then think of where they shop. Those stores are your customer too.

If this thread shows enough interest, I’ll dig in deep to how to enter wholesale, get customers, get distribution.

Pick up the phone and start dialing.

This was my ultimate goal, so I will eat up any info you can throw out there! Just started reading the thread, but thanks in advance!

 

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[Patrickg]

These phone calls go much easier than you’d expect. After my 3rd one, I had a script and routine down. Just dialed, said my spiel and 33% of the time, closed the sale.

33% wow that's a killer close rate over the phone.

 

[Scot]

33% wow that's a killer close rate over the phone.

I will admit those early accounts were what I would consider very hot leads.

 

[Scot]

Here’s a great resource for everyone.

Go to www.range.me and check this website out.

It’s a wholesale showcasing website. You make a profile for your business and add your products to it. The website has buyers from both small stores, distributors, and large box retailers.

I believe the premium subscription is $1500 for the year, but this gives you access directly to buyers and allows them to come to you.

Huge disclaimer. I am in no way affiliated with this website, do not get paid a dime from them. They are simply a resource that I have found. @MidwestLandlord has already gotten a couple nibbles from there. I have not, yet. So, I cannot promise any actual success. I advise you look at their retailer list to see if any stores there for your market first.

 

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[Scot]

Margins Pt 2​

It took me more time than I care to admit how to figure out margins. I had been calculating markup for a while...

Simplest way to determine margin is this formula.

(Retail cost - wholesale cost) / retail cost = margin

Let’s punch that in.

19.99 - 14.99 = 5

5 / 19.99 = .25 which in turn is 25% (if you can’t figure out how to convert decimal to percent, I can’t help you there)

 

[ZCP]

Thank you so much!
This is the first reply that I post on this forum and I already learned much more than I did in the past two weeks.

I'm a big supporter of the "just dive in" approach, but unfortunately, I've encountered too many obstacles when trying to set it up myself, such as:
-Where do I ship it from? (For this one I started using a 3rd party logistic center)
- How do I take care of the shipping? Do I simply use UPS?
- What do I do with returns?
-Do I change the price depending on the location of the buyer?
- Payment method is a bit tricky since I'm not a US citizen
- How do I prevent the buyers from selling the item on Amazon?
- Since English is not my native language, it's difficult making the sale via phone (for this one I started hiring an English speaker that can take care of the communication)

I do make progress but I feel it's too slow. That's why I'm looking for a good source to learn from

Get stop making excuses. Start making progress. Post here. Reach out to people on the forum. Get to work.

 

[Longinus]

Great thread!

Currently awaiting payment for a near $8000 deal from a very big American company. I must say this happened quite coincidental.

I setup a website for my ecom brand and all of the sudden got their inquiry. They found my brand on Amazon and contacted me directly for +500 pcs of one of my products.

I could give them a much better price than the products I sell on Amazon and with still about 50% margin.

Now I'll add a "wholesale form" on my website and will definitely focus on more deals like that.

 

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[Vigilante]

Great thread!

Currently awaiting payment for a near $8000 deal from a very big American company. I must say this happened quite coincidental.

I setup a website for my ecom brand and all of the sudden got their inquiry. They found my brand on Amazon and contacted me directly for +500 pcs of one of my products.

I could give them a much better price than the products I sell on Amazon and with still about 50% margin.

Now I'll add a "wholesale form" on my website and will definitely focus on more deals like that.

Here's one thing I learned though with similar transactions. You don't have to discount as steeply as you may think you do. Sometimes, they end up buying near full retail. If it is the government, ZERO discounts as they don't care what they pay. Most wholesale orders we'll only discount 10%-20% below regular retail.

That's not the same type of wholesale business @Scot set out to post about in this thread. Traditional retailers require traditional margin.

However, your job is to minimize discounts where ever possible. You might be surprised to find a customer that wants 500 will be happy with ANY discount you give them, because they almost paid RETAIL for it before they called you.

Expect more - get more.

 

[MoreVolume]

@Scot
What type of paperwork do you suggest to have prepared?

I've got my product in a few mom and pop type stores, but those guys didn't require much convincing, and the relationship is pretty casual. They call or email, pay through check or Paypal, and I ship.

But now I'm aiming at a big boy and i don't think that any of that will fly.

 

[amp0193]

Go to www.range.me and check this website out.

Whether this site, or Hubba, there will be a big shift for wholesale to move to sites like this.

Maybe start to cut out distributors as it becomes easier to go direct.

Or maybe Hubba/Range becomes the "big" distributor... like Amazon has FBA.

Wholesale is too old school and is do for a shake up

 

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[AllenCrawley]

Whether this site, or Hubba, there will be a big shift for wholesale to move to sites like this.

Maybe start to cut out distributors as it becomes easier to go direct.

Or maybe Hubba/Range becomes the "big" distributor... like Amazon has FBA.

Wholesale is too old school and is do for a shake up

Agreed. Was has your experience been with these platforms?

 

[amp0193]

Agreed. Was has your experience been with these platforms?

I've never really used them. Just dabbled with the last business.

 

[Scot]

Whether this site, or Hubba, there will be a big shift for wholesale to move to sites like this.

Maybe start to cut out distributors as it becomes easier to go direct.

Or maybe Hubba/Range becomes the "big" distributor... like Amazon has FBA.

Wholesale is too old school and is do for a shake up

The only reason I see distributors still being around is because of two factors. Good distributors have sales reps, so they sell for you.

Also, shipping and delivery is difficult when you’re sending 15 lb cases of glass bottles. So, I honestly prefer to pay the distributor to handle that nightmare.

 

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[FreedomforEarl]

Yep, I plan on putting together a guide for this thread later in the afternoon.



Whoops, typo, I fixed it!

Agreed, getting into retail is much easier than people think. But it all comes down to good quality product and product-market fit. If your product is mediocre and it doesn’t make sense for that retailer, there’s no reason why they should carry it.

Also, thanks for the Rep$

Please let me know when you have the guide up and going ! Please !

 

[AllenCrawley]

Please let me know when you have the guide up and going ! Please !

Check posts 14 and 16.