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You’re not selling wholesale?

Scot

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At what stage of the brand launch process would you target wholesale customers?

I started the minute I had actual product in hand.

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

For your situation, and most others, this question answers your first one.

Always validate your market first. You may need to pivot or change things before you make it to mass market.

In my instance, there just isn’t anyone making this product for a growing market. But, if you’re launching into a crowded or well established market, you need to make sure people are willing to vote with their wallets first.
 
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njord

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Such a great topic!
Iv learnt so much here and it has given me new ideas.
Right now Iv just started with FBA and I am expecting my first shipment to arrive at amazon on november 30th.

Im really exited to try out whole sales as soon as i have validated my market!

Excellent thread @Scot and thanks to @amp0193

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 feel we are at a simar spot only I havent started FB adds yet, why start before your product launch? I was planning to do it as soon as my product is avalible so my customers dont have to wait.
 
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Paul David

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Such a great topic!
Iv learnt so much here and it has given me new ideas.
Right now Iv just started with FBA and I am expecting my first shipment to arrive at amazon on november 30th.

Im really exited to try out whole sales as soon as i have validated my market!



I feel we are at a simar spot only I havent started FB adds yet, why start before your product launch? I was planning to do it as soon as my product is avalible so my customers dont have to wait.

I have started building an email list via facebook ads so that as soon as the inventory hits Amazon i will already have a list of 20,000 targeted customers who i can offer my product to immediately at discount price. This will increase Amazon rank via sales and also reviews.

Previously when i have launched products on Amazon i have waited to build a list until the product is in Amazon. One of the other reasons for launching this new brand is that my other products are in different niches which makes it harder to cross sell. I have to build new lists each time. This brand is going to be ultra niche targeted.

As Amazon gets more saturated it becomes harder to launch products on Amazon. It's therefore very important to have a pre-sold list of potential customers.
 

Scot

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And once you both validate your market, get good reviews, and show a documented sales trajectory, all of that can be put into a marketing effort for wholesale.
 
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njord

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I have started building an email list via facebook ads so that as soon as the inventory hits Amazon i will already have a list of 20,000 targeted customers who i can offer my product to immediately at discount price. This will increase Amazon rank via sales and also reviews.

20,000 ? that sounds like alot to me how much dit it cost you?
Im new to the hole fb adds thing and need to look it up
 

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20,000 ? that sounds like alot to me how much dit it cost you?
Im new to the hole fb adds thing and need to look it up

At the moment i have 6000 from last 4 weeks which has cost me around £800.00 in facebook ads.
I'm running a free competition to win a 4 night holiday using tool called Upviral which encourages customers to share the competition on their social media pages in order to be given extra entrees into the competition therefore more chances of winning. Holiday is going to cost me around £800.00 on top.

Therefore it's going to cost £3000-4000 for 20,000 leads but long term it will be worth it.

If you have anymore questions please feel free to PM me. I don't want to take @Scot thread in a different direction!
 

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At the moment i have 6000 from last 4 weeks which has cost me around £800.00 in facebook ads.
I'm running a free competition to win a 4 night holiday using tool called Upviral which encourages customers to share the competition on their social media pages in order to be given extra entrees into the competition therefore more chances of winning. Holiday is going to cost me around £800.00 on top.

Therefore it's going to cost £3000-4000 for 20,000 leads but long term it will be worth it.

If you have anymore questions please feel free to PM me. I don't want to take @Scot thread in a different direction!

How do you ensure that most people on that list are actually interested in your product and will be likely to buy later on, rather than just giving up their email because they are more interested in winning a free vacation?

I would give up my email for a free chance to win a 4 day holiday without caring at all about whatever your product is.


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Paul David

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How do you ensure that most people on that list are actually interested in your product and will be likely to buy later on, rather than just giving up their email because they are more interested in winning a free vacation?

I would give up my email for a free chance to win a 4 day holiday without caring at all about whatever your product is.


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Very true. However my product is required by someone going on holiday so therefore very relevant. My facebook ads are also targeted to people interested in Travel.
I am also running facebook ads offering people my product free of charge.
 

Scot

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Psst @Paul David and @njord as informative as this is, let’s try and keep this thread in topic to wholesaling. Building email lists for amazon won’t help anyone pursuing retail distribution.
 

Paul David

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Psst @Paul David and @njord as informative as this is, let’s try and keep this thread in topic to wholesaling. Building email lists for amazon won’t help anyone pursuing retail distribution.

Agree! And speaking of this does anyone have any experience of selling to hotels?


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njord

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What I would like to know is how do you start whole saling? How do you finance it?

Im starting with my first brand with amazon FBA, when I get that ball running and know there is demand for my product ill contact stores to sell whole sale to.

But how do i finance it? will the stores really pay for a product they have to wait 2 months to arrive? (1 month manufacturing + 1 month transport)

Im just starting off so i dont have the liquidity to pay upfront and in Holland my i have to pay off my credit card at the end of every month so i cant use that unless i want to pay massive rent + iv got a small maxium limet.

I also have a morgage on my house so i cant just lend extra money from the bank too.

How do you guys do it?
 

Scot

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How do you finance it?

When i figure out this $1billion question.. I’ll let you know haha

You mentioned you’re in Holland, so that changes my answer. I would say the best instrument for funding is a Line if Credit. In the US, it’s possible to get a Line through the Small Business Association. I have no idea if your government or the EU have any similar programs. See if there are any methods for a government agency to subsidize your business loan/Line of credit.

will the stores really pay for a product they have to wait 2 months to arrive? (1 month manufacturing + 1 month transport)

No, they won’t. Check back early in my thread, most of your customers will pay on terms. Essentially, they’ll place an order, you send it, and they pay it after a set amount of time, i.e. 15, 30, 45, 60 days.

You won’t find any stores that are willing to prepay for essentially dropshipping. Especially since you’re a completely unknown brand/risk.

You will need to have inventory already manufacturered and in your warehouse to ship once you get the order. 1 month lead time is pushing it. The only exceptions to this are if you are a brand new product that the customer knows you have to produce specifically for them. But that will only work for the first order.
 

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I only have 1 launched right now. However, I’m waiting for the rest of my line to launch next month before I push for more stores.
Hi Scot, I'm not sure about what your product is but let's say hypothetically I'm selling a unique woman's shoe. I want to wholesale to B/M and LLBean and London Fog and Macys and also get on board w/ Amazon. Do I need to strategize about not trying to sell to competing outfits? Second, since I've never done this, is there an ideal ratio? (I've heard it's best not to put all of your eggs in the Amazon basket.) Thanks for doing this thread man, Greg
 
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Wolfman

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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.
 

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Hi Vig, That must be a mystical photo with lots of hidden meaning. (On its surface it's also a nice pic.) Us newbies can always use a bit of inspiration so please share.
 

Wolfman

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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?
Hi Cat, So I looked at Anthropologie's online catalogue. Hypothetically let's say I have a better/cooler umbrella than their $32. Could I go in and pitch the owner on selling my umbrella in his store as opposed to the one in their own catalogue? (Good product for Portland. hehehe) Greg
 
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Scot

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Hi Scot, I'm not sure about what your product is

I mention very often in this thread what my product is and what market its in.. grocery.

Hi Vig, That must be a mystical photo with lots of hidden meaning. (On its surface it's also a nice pic.) Us newbies can always use a bit of inspiration so please share.

If you go back and read the thread, you'll see the picture he's referencing in the thread...

Go back and read the whole thread, because I feel like you're missing a lot of the points here.

Why would you try pitching to LL Bean or London Fog? They're brands, not stores. They don't wholesale other company's products. Unless you're referring to a private label deal, which this thread is not about, and I cannot provide any guidance on.

You don't wholesale to Amazon, so no need to pitch them.

Your ratio will be completely unique to your business. I prefer to have a higher ratio of brick and mortar vs ecommerce because of the logistical costs for shipping direct to consumer for my products. That's a decision you'll have to make yourself but can maybe base it on what other comparable companies are doing.
 

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I mention very often in this thread what my product is and what market its in.. grocery.



If you go back and read the thread, you'll see the picture he's referencing in the thread...

Go back and read the whole thread, because I feel like you're missing a lot of the points here.

Why would you try pitching to LL Bean or London Fog? They're brands, not stores. They don't wholesale other company's products. Unless you're referring to a private label deal, which this thread is not about, and I cannot provide any guidance on.

You don't wholesale to Amazon, so no need to pitch them.

Your ratio will be completely unique to your business. I prefer to have a higher ratio of brick and mortar vs ecommerce because of the logistical costs for shipping direct to consumer for my products. That's a decision you'll have to make yourself but can maybe base it on what other comparable companies are doing.

Hi Scot, Thanks a lot for clearing up some stuff that I should have learned the first time through. Sorry for missing your product and other stuff.
When I go to LLBean online catologue, outdoor accessories (possible fit for my product) more than half the items are not branded by LLBean. So those are private label deals?
I'm probably missing something again. What is the difference if I went to a brick and mortar LLBean, walked into the outdoor accessories dept. and bumped into their purchaser?
For example, almost all of the knives they sell are outside brands. What's the channel for the manufacturers to get their product/brand into LLBean's store/catalogue?
This is important for me because I will want to build my own brand for an exit down the road. Thanks again (and sorry again), Greg
 

Scot

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What's the channel for the manufacturers to get their product/brand into LLBean's store/catalogue?


I don’t know the specifics for this market.

I also didn’t know the specifics for grocery before last year.

I’ve laid it out here in this thread though. Start looking for people on LinkedIn with the title “buyer” or “category manager” then start emailing and calling.

Have you tried calling LL Bean and asking what the process is for a new vendor submission is? Have you googled that?
 
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Just coming back in here to give props to @Scot
I went to work on creating a new wholesale plan after viewing this thread. New pricing, literature and samples.
I've reached out to retail stores in Australia and so far im 4/4

Wholesale purchases change the game for sure. 1 wholesale transaction can eclipse a whole week of internet sales
 

Scot

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Im going to give them a few months, but @AllenCrawley has a new wholesale strategy and killer sales manager. He also has a large catalogue of products to sell too.

After you catch your stride, would you mind posting an overview of what’s working thr brand?
 
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Scot

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Wholesale purchases change the game for sure. 1 wholesale transaction can eclipse a whole week of internet sales

Exactly!

My first wholesale order was bigger than all the online sales I did up to that point.

Great work implementing this. Rep+
 

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Im going to give them a few months, but @AllenCrawley has a new wholesale strategy and killer sales manager. He also has a large catalogue of products to sell too.

After you catch your stride, would you mind posting an overview of what’s working thr brand?
For sure. I will be posting a new progress thread on the Inside soon.
 

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Agree! And speaking of this does anyone have any experience of selling to hotels?


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I do, in the food/janitorial category.

In my experience it has been more hassle than it's worth due to things like credit terms, incredibly low margins and an absolute difficulty getting paid in general - but I'd be happy to answer any questions you have.
 
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Hi everyone,

I am a bit confused. Do you guys brand your own products and wholesale it to stores? Or are you wholesaling existing brands to stores?
 

Scot

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Hi everyone,

I am a bit confused. Do you guys brand your own products and wholesale it to stores? Or are you wholesaling existing brands to stores?

Everyone in this thread, with the exception of @MidwestLandlord , sell their own products to stores. Midwest was a distributor. The rest of us are vendors.
 

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What I would like to know is how do you start whole saling? How do you finance it?

Im starting with my first brand with amazon FBA, when I get that ball running and know there is demand for my product ill contact stores to sell whole sale to.

But how do i finance it? will the stores really pay for a product they have to wait 2 months to arrive? (1 month manufacturing + 1 month transport)

Im just starting off so i dont have the liquidity to pay upfront and in Holland my i have to pay off my credit card at the end of every month so i cant use that unless i want to pay massive rent + iv got a small maxium limet.

I also have a morgage on my house so i cant just lend extra money from the bank too.

How do you guys do it?

This is a really late reply but I figured late is better than never...

We were approached by a very large retailer recently and had to solve this problem ourselves. We aren't using this solution yet, but I did learn about it. It seems the solution is what's known as invoice factoring. You need decent margins to make it work, but here's an outline:
  1. You receive a purchase order from a retailer for $5,000;
  2. You send them an invoice for $5,000 with net 30 (or 60, or 90...);
  3. You "sell" the invoice to a factoring company which will charge you a % interest rate per month you need the factoring;
  4. The factoring company pays you ~80% of the invoice value right away, so you get a transfer for $4,000 within a few business days of issuing the invoice;
  5. You receive the remaining 20%, less the fees, after the retailer has paid the invoice to the factoring company, say like $500 assuming you paid a total of 10% in fees.
Benefits: Cash right away, not in 3 months. Allows you to get on top of your inventory and not miss any sales. This solves probably one of the largest operational issues for growing a wholesale distribution channel, which is funding the growth itself.

Downsides: The fees can add up for long payment terms. Large retailers expect 60 to 90 days usually, so that could cost like 10 or 15% of your revenue (assuming a 3 to 5% per month fee), which is why it's important you have good margins.
 
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Scot

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Downsides: The fees can add up for long payment terms. Large retailers expect 60 to 90 days usually, so that could cost like 10 or 15% of your revenue (assuming a 3 to 5% per month fee), which is why it's important you have good margins.

One thing to also be very wary of...

Invoice factoring/purchase order financing firms can sometimes be very collections agency like. If they don't get their payment from your client within 30 days, they'll start calling. This is a very quick way to piss off your new account.

Make sure you find out what their policy is for late payment. I'd rather let it go past due and pay fees than let Walmart know you're using a factoring firm that's going to badger them daily for remittance.
 

jcvlds

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Make sure you find out what their policy is for late payment. I'd rather let it go past due and pay fees than let Walmart know you're using a factoring firm that's going to badger them daily for remittance.

Great point. Have to balance the act of not annoying your key client accounts, with keeping a sharp eye on your monthly cashflows.. cash reserves can help cushion when your customers pay late but you still need to pay your vendors. A business could be profitable on the P&L yet crumble because they ran out of cash by not keeping a tight eye on Receivables


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