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You’re not selling wholesale?

Longinus

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Longinus

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I've been turned down now multiple times by big hardware stores (Menard's, Home Depot, etc.). I offered the same product at the same suggested selling price, with about 35-40% profit for them.

But apparently it's not enough for them. They say they get their products at a "significantly lower price".

I suppose those big players order lots of products at a very low price. Will aim on smaller players in the market now.
 

CareCPA

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I've been turned down now multiple times by big hardware stores (Menard's, Home Depot, etc.). I offered the same product at the same suggested selling price, with about 35-40% profit for them.

But apparently it's not enough for them. They say they get their products at a "significantly lower price".

I suppose those big players order lots of products at a very low price. Will aim on smaller players in the market now.
Have you asked them what price they need to make the order work? There may still be enough profit for you if they're going to place six-figure orders, even if the profit margin is slimmer.
 

Longinus

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Have you asked them what price they need to make the order work? There may still be enough profit for you if they're going to place six-figure orders, even if the profit margin is slimmer.

Yeah, I asked one and they simply responded that they cannot answer that question. Not sure if this person was a dick or it's unusual that a suppliers asks this.
 
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CareCPA

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@Scot

Can you give me your daily routine?

Every time I do something that you do. I win big.
I read somewhere that one day @Scot woke up, started hustling, and just never went back to sleep.
 

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@Scot may be Skynet!!....... self aware about 2 years ago..... it may already be too late.....
 
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@Scot
If you had a product that retailed for $7.49, what would your wholesale price be, for one unit?
Mind you, the cost of production is $1.21
 

Scot

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@Scot
If you had a product that retailed for $7.49, what would your wholesale price be, for one unit?
Mind you, the cost of production is $1.21


I can only speak for grocery stores. Different store types want different margins.

$4.86 direct to store (delivered) - 35% margin for the store

$3.40 to distributor (delivered) - 30% margin for the distributor

I know a potential market for your product is convenience stores/gas stations, so @MidwestLandlord might have a better idea. As far as adult stores, I don’t have a clue what expected margins are.
 

Scot

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Net terms suck

So, my Hy-Vee account, our net terms are 30 day, but they seem to be paying me at 45 days. Which, as you can imagine for cash flow, is killing me.

While speaking with my broker yesterday, I asked him what terms he expected. For independent stores, net 10 days. This took me a bit by surprise.

He then explains for bigger accounts, he does 2% 10 Net 30. Which translates to, if you pay me within 10 days, you get a 2% discount. If not, you owe me the total balance by 30 days. This incentivizes then to pay early. Im going to try and work this (or a similar deal) out with Hy-Vee’s accounts payable Dept.
 
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LynetteP

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She was able to get about 200k in orders (mind you she had no inventory...I don't recommend doing this but it worked for her) her customers were a little pissed that it took her 30 days to get their order to them but today she is doing 5-7 million in revenue per year

Can you give any more details on how she got 200K in orders at AmericasMart? I really need a shot in the arm like that!
 

CareCPA

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Net terms suck

So, my Hy-Vee account, our net terms are 30 day, but they seem to be paying me at 45 days. Which, as you can imagine for cash flow, is killing me.

While speaking with my broker yesterday, I asked him what terms he expected. For independent stores, net 10 days. This took me a bit by surprise.

He then explains for bigger accounts, he does 2% 10 Net 30. Which translates to, if you pay me within 10 days, you get a 2% discount. If not, you owe me the total balance by 30 days. This incentivizes then to pay early. Im going to try and work this (or a similar deal) out with Hy-Vee’s accounts payable Dept.
Depending on how aggressive you want to be, and how badly they need your product, you can also implement a penalty if payment isn't in hand in 30 days.
Actually collecting the penalty could be just as difficult, unless you report to D&B or similar.
 

MidwestLandlord

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I know a potential market for your product is convenience stores/gas stations, so @MidwestLandlord might have a better idea. As far as adult stores, I don’t have a clue what expected margins are.

C-stores typically want 40% at minimum, unless it is a name brand item that does tremendous volume (think Coke, Pepsi...and those usually have kickbacks where the initial invoice has a lower margin, but after kickback monies and shelving rentals it is much higher)

Of course that doesn't include vice products like alcohol, tobacco, and vape.

40% will be a hard sell though. Like I said, that's minimum. 50% is more realistic.

Net terms suck

So, my Hy-Vee account, our net terms are 30 day, but they seem to be paying me at 45 days. Which, as you can imagine for cash flow, is killing me.

While speaking with my broker yesterday, I asked him what terms he expected. For independent stores, net 10 days. This took me a bit by surprise.

He then explains for bigger accounts, he does 2% 10 Net 30. Which translates to, if you pay me within 10 days, you get a 2% discount. If not, you owe me the total balance by 30 days. This incentivizes then to pay early. Im going to try and work this (or a similar deal) out with Hy-Vee’s accounts payable Dept.

Safeway pays me in 45 days as well, even though I am 2% 10 Net 30 with them. 45 days seems to be typical for the larger chains. They've NEVER paid me in time to get the discount, and seemingly don't care either.

ALL of my independents are on NET 10, and not a single one has complained about it. All pay within 15 days, so it's a little sloppy. After 15 days I charge 2% monthly, I void all referral monies (I give $25 invoice credits for referrals), and suspend all deliveries until paid.

I have waved late fees for a chain with multiple locations though, where they paid on time for all but one location because that store manager kept losing the invoices/delivery tickets and the corporate office didn't know they owed me money. I solved that by sending a duplicate invoice for that location directly to the office for all of that location's deliveries.
 
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Scot

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Getting new customers through email lists

I'm going to lay out my current strategy to build up my customers through an email campaign. This current strategy is untested, as I am starting it in 2 days. Here's what I have done and will be doing with it.

The goal:
To get a larger footprint into independent stores, i.e. "mom and pop" type stores.

The method:
Build list by using a google maps scraper, targeting keyword business types. Build automated email campaign to create leads.

The hypothesis:
I'm going after low hanging fruit. I am taking a regional approach, targeting my own state and the two closes states. If I can build an automated funnel, I can hopefully get a 5-10 new customers out of this with relatively little work.

The follow through:
Add customers into a CRM, probably Hubspot. This will allow me to follow up on orders, set reminders for reorders and new stock.

About 70% of my list that I've built does not have email addresses attached to the business listings. I will sort these out and target the most likely business types to stock my product and start a phone call campaign. Buying customers will be added to the CRM flow. If I can get a contact email, they will be added to a separate automated funnel which will try to convert warm leads.


To build the email list I used BotSol from botsol.com However, I imagine most google maps scrapers will do the trick. The main goal for mine is to obtain email addresses, so you'll want a scraper that specifically targets emails addresses. This is important, because google maps does not list this. Your scraper needs to actually go to the website to pull the email.

A trick I do is to search key term, in my case "natural food stores" and do it by area. I googled "list of cities in Florida by population" and just went down the list. "Natural food stores near Jacksonville, natural food stores near Miami, natural food stores near Tampa, etc etc" Combine the whole list into one master one.

Now its time to clean up your list. First, add filters to your headers. The first tab I went to was business category. You'll find a lot of random store categories that don't match yours at all. For example, google pulled a lot of pet food stores, beauty salons, pharmacies, gyms. I delete all those entries. Next, for the sake of this campaign, targeting big box stores was not the goal. So, I sorted out store names. Delete all the big stores, Walmart, CVS, Kroger, Riteaid, Wholefoods, etc etc.

After that, do conditional formatting. You'll want to highlight duplicate entries in the store names tab. This way, if say "Tom's Natural Foods" has 5 locations in 3 different cities, it will highlight all 5. You can sort out by cell highlighted color. Remove duplicates. For the purposes of this list, you are emailing the stores, so unless each store has an individual email address, delete duplicates.

Next, sort A-Z by email address. This will bring all the listings with an email address to the top of the list. I went through and found listings with multiple emails. I would create a duplicate listing for each individual email. The thinking behind this is, if it lists bob@bobsfoodmart.com, susie@bobsfootmart.com, tim@bobsfoodmart.com I don't know who the best contact is, so why not email all three? Sorting them into individual listings will make it easier to add to your email platform later.

After this, I sift through the listings with emails to make sure everything looks kosher. I found about 10-15 listings I'd missed that just didn't fit my target, i.e. delis, restaurant, juice bars.


I'm using MailCheat(Chimp) for my emails. Its free and simple. My campaign flow looks like this.

First email:
Basic email, 3 lines, plain text. "Hey, is this the correct cantact for the person who makes buying decisions for your store? I'm Scot, owner of BLAH BLAH Co. If not, can you please forward me to that person"

Second email condition : If contact did not open email 1

Follow up, plain text, a little longer. Ask similar question, change up the subject, add a little more info about your business/product. Keep is less than 2 paragraphs.

Third email condition : Follow up 3 days

Start marketing, add product info. Add graphics. Make this a sales piece, get creative.

Fourth email condition : Send 2 days later

Get crazy. Lost of images, marketing, sell sheet. If they're not going to respond to you, last ditch effort to wow them.


That's it for now. I've got 200 emails between Florida and Georgia I'm going to plug into this system on Monday. We'll see how it goes.
 

MidwestLandlord

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I can hopefully get a 5-10 new customers out of this with relatively little work.

Surely you don't mean 5-10 new locations after all that?

I'm running about an 80% success rate on new retailers, in the same general category. I get 8 of 10 I approach. I'm selective on who I approach though.

So...in an area your size, you should gain much more than 5-10 locations (assuming you approach retailers that are a likely candidate, which may be hard to know without physically visiting the location first)

3 states, approaching mom & pop grocery, I would think more like 50+ locations gained. (let's say 10% of 500 total approaches to account for the type of marketing you are doing...i.e, not in person)

Also, your closing rate should increase as you adjust who you approach AND adjust your marketing to include the success your brand is having. The more locations you have, the easier it is to gain even more. (it's far easier to get your 20th location than it is your 2nd)
 

Scot

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Surely you don't mean 5-10 new locations after all that?

I'm running about an 80% success rate on new retailers, in the same general category. I get 8 of 10 I approach. I'm selective on who I approach though.

So...in an area your size, you should gain much more than 5-10 locations (assuming you approach retailers that are a likely candidate, which may be hard to know without physically visiting the location first)

3 states, approaching mom & pop grocery, I would think more like 50+ locations gained. (let's say 10% of 500 total approaches to account for the type of marketing you are doing...i.e, not in person)

Also, your closing rate should increase as you adjust who you approach AND adjust your marketing to include the success your brand is having. The more locations you have, the easier it is to gain even more. (it's far easier to get your 20th location than it is your 2nd)


I only expect that from a lazy automated email campaign.

Once I start sitting through the list and building a targeted calling campaign, I definitely expect the close rate to go significantly higher.
 
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MidwestLandlord

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I only expect that from a lazy automated email campaign.

Once I start sitting through the list and building a targeted calling campaign, I definitely expect the close rate to go significantly higher.

Just wanted to make sure you're thinking big!

I'm gaining about 2 retailers a week on that one brand in the same (ish) category, and your town has 40% of the population of my entire state...
 

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Crazy useful thread!

Applying all of this to my online store now
I'm going to follow the same process as you with the automated emails, except I'll send them out manually, purely because of the MailCheat(Chimp) footer, as well as I have very few stores to reach out to (+-15).

I'd like to know your opinion on the footer? It seems against mail chimp TOS to scrape emails, as well as it being VERY obvious to the person you're sending it to that it is an automated email. Going to investigate other options for this.

(I've deleted out all sensitive information, but it lists your email address and your address in the footer aswell)

IMG_6285.PNG

My flow will probably follow this:
- Manually send out a templated email to stores.
- Schedule follow-ups (following your MailCheat(Chimp) flow) using a CRM
- Stores which show interest / buy wholesale will be added to a MailCheat(Chimp) list for promotion, education, media etc.
- Call all stores at the end of the flow, whether they show interest or not.
 

Scot

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Crazy useful thread!

Applying all of this to my online store now
I'm going to follow the same process as you with the automated emails, except I'll send them out manually, purely because of the MailCheat(Chimp) footer, as well as I have very few stores to reach out to (+-15).

I'd like to know your opinion on the footer? It seems against mail chimp TOS to scrape emails, as well as it being VERY obvious to the person you're sending it to that it is an automated email. Going to investigate other options for this.

(I've deleted out all sensitive information, but it lists your email address and your address in the footer aswell)

View attachment 21527

My flow will probably follow this:
- Manually send out a templated email to stores.
- Schedule follow-ups (following your MailCheat(Chimp) flow) using a CRM
- Stores which show interest / buy wholesale will be added to a MailCheat(Chimp) list for promotion, education, media etc.
- Call all stores at the end of the flow, whether they show interest or not.

As far as MailCheat(Chimp)’s TOS.. what mama don’t know, won’t hurt her. Since you’re sending to 15 ish emails, the odds of one or more reporting you for improper emailing are super rare.

If you dumped 1,000 emails, yes.

However, plain text emails may not be a bad idea either. An app like boomerang for gmail sets auto reminders to follow up. It all depends what you want to send via email.

If your end goal is a phone call, using emails to make this a warm contact, then I’d just plain text via regular email.
 
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Scot

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As a follow up to that, I only expect this email campaign to have a 1-5% conversion rate. This was simply a “do a few hours of work for low hanging fruit.”

If you only have 15 targets you’re going after, you should be picking up the phone or going in person if you really want to convert these
 

Xolorr

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As far as MailCheat(Chimp)’s TOS.. what mama don’t know, won’t hurt her. Since you’re sending to 15 ish emails, the odds of one or more reporting you for improper emailing are super rare.

If you dumped 1,000 emails, yes.

However, plain text emails may not be a bad idea either. An app like boomerang for gmail sets auto reminders to follow up. It all depends what you want to send via email.

If your end goal is a phone call, using emails to make this a warm contact, then I’d just plain text via regular email.

As a follow up to that, I only expect this email campaign to have a 1-5% conversion rate. This was simply a “do a few hours of work for low hanging fruit.”

If you only have 15 targets you’re going after, you should be picking up the phone or going in person if you really want to convert these

Did the 15 plain-texts after I replied to this.
I then went to gym for an hour, and I've had 3 responses of people interested already.

I know its small fish compared to what you guys are doing, but baby steps!

Thank you Scot!
Rep+

Now it's time to seal the deal :)

Btw, I'm using Zoho Mail (Because its free for a custom domain email), and it has some great features built in. I use the templates and the reminders, yet to explore the rest.
 

amp0193

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except I'll send them out manually, purely because of the MailCheat(Chimp) footer, as well as I have very few stores to reach out to (+-15).

quickmail.io is an automated email system that sends out plain text emails with follow up sequences from your gmail.
 
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Scot

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Update:
Just closed my first wholesale deal, T- 4 hours after reading this thread.
Great one @Scot ⚡️

BOOM. Good job taking action!

Rep+++
 

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I can only speak for grocery stores. Different store types want different margins.

$4.86 direct to store (delivered) - 35% margin for the store

$3.40 to distributor (delivered) - 30% margin for the distributor

I know a potential market for your product is convenience stores/gas stations, so @MidwestLandlord might have a better idea. As far as adult stores, I don’t have a clue what expected margins are.
Im creating a new wholesale information sheet, and confused as to what terms to use.

Are there official terms for:
- Wholesale Discounted Percentage (the % that the product is discounted by)
- Markup Margin (% margin for the store)

?
 
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amp0193

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Im creating a new wholesale information sheet, and confused as to what terms to use.

Are there official terms for:
- Wholesale Discounted Percentage (the % that the product is discounted by)
- Markup Margin (% margin for the store)

?

I've got 5 columns: Wholesale, Retail (or MSRP), MAP, Profit, and Margin.

Really all you need to get started is Wholesale Price and Retail Price.
 

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Scot

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As posted in my progress thread on the inside, I will repost this here as well.

---

Here's @MidwestLandlord method for converting B&M. All credit goes to him.


Step 1: Identify appropriate stores
Pick a geographic region and google maps scrape businesses that fit your target customer. For me, natural food stores. Clean the list up, and focus in on a small radius area. For me, its the tri-county area. Go to each store's website and see what their product offerings, store, and clientele look like. You want to pick stores that will be a good match for you. For example, stores that are super hippie, sell essential oils, and have a strict non-GMO policy got cut from my list.

Step 2: Build a sales packet
Put together a nice folder to mail to these stores. I went to Vistaprint and made customer 9"x12" presentation folders with my logo on them. Include an order form, a cover letter telling your story, any sell sheets you have. Lots of color, lots of pictures.

Mail these to each store. Important. These will get looked at and then thrown in the trash.

Step 3: Call the stores
Estimate 2-3 days after the envelope should have arrived and call each of the stores you sent a mailer to. Ask for the manager/owner/decision maker. Tell them you're from XYZ company. "Oh yeah, I've heard of you" This is now a warm contact, not a cold contact. Keep it short, simple. Your goal is to schedule an appointment to come into the store to present your products. Let them know their time is valuable.

Step 4: Go to the store, close the sale
Bring a copy of that same sales packet they probably threw away. Bring samples of your products. Sell your brand and ask for the business. This one I can't coach you threw, this is up to you. If your brand is something with high velocity, sell them an auto replenish order. i.e. We will deliver 2 cases the second Friday of every month. If your product is a little slower like mine, sell however many cases in the first sale, and keep in contact for reorders.

I am sending out my first round today, I will update in a week or so to let y'all know the conversion rate.
 

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Excellent thread @Scot and thanks to @amp0193 for posting the link in another thread and also contributing.

At what stage of the brand launch process would you target wholesale customers?
I'm still at early stage (waiting for samples) but i'd expect to have stock in the next 2-3 months. During that time i've been running facebook ads to targeted customers in order to generate a mailing list i can use for product giveways for feedback, amazon sales velocity etc. I've also set up a shopify store although it's not live as i don't have any product images yet.

Would you wait for some market validation before approaching wholesale stores to help close the deal? Ie amazon reviews, website reviews etc.
 

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