The Entrepreneur Forum | Startups | Entrepreneurship | Starting a Business | Motivation | Success

NOTABLE! [STEP BY STEP] How I Got Picked Up by 5 U.S. Sales Reps… With 6 Hours of Work

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
I stepped up my wholesale game this month in a big way. I’m leveraging the time and connections of showrooms and sales reps to get my product distributed into retail stores.


This Thread is For:
  • People with products/brands selling only on Amazon/ecommerce, who want to expand offline.
  • People looking to increase the multiple for which their product business is worth
  • People looking to get some CONTROL in their business model.
  • People who are trying (and failing) to get into wholesale by adding 1 store at a time.

A year ago, wholesale was new and “scary” to me. There was a lot of mystery shrouding the process and the terminology. Before I get to my process, I’m first going to walk through some of the pre-requisites and terms that you need to know for selling wholesale. This is not an all-inclusive list, and the requirements by industry may be different for you.


What is a Showroom?

Showrooms are generally set up in a Market Center, with lots of other showrooms. Think of a Market Center like a shopping mall for wholesale buyers, and Showrooms as the stores in that mall.

Dallas Market Center:



A showroom in Dallas Market Center:



Permanent showrooms are open 9-5, 5 days a week. Some showrooms only open for a week every 2-3 months for the "Markets". Some showroom reps will also set up at some “pop-up” trade shows in nearby cities.

A “Market” is a once a quarter industry-specific event, like a trade show, where wholesale buyers visit the Market Center en masse.

Wholesale buyers like to buy from showrooms because with one contact, and one check, they can buy an assortment of different brands and product lines. It is much more convenient then dealing with each individual brand directly. Brands like it, because with one contact, your product will get placed into many different stores.


What Do I Need Before Approaching a Showroom?
  • A Product Line - A range of products that are cohesively grouped together. Showrooms/distributors don’t usually pick up just one product, they pick up a whole product line.
  • Line Sheet: A “mini-catalog” that showcases the products in that product line. Fit onto 1 or 2 pages, designed to be handed out to prospective wholesale buyers at a trade show (or emailed).
  • Price List: Usually included with line sheet (if prices are not on the sheet). Has wholesale prices, suggested retail prices, shipping info, minimum order info, display options. Mine is set up in Excel like an order form, where buyers can fill out quantities on the form, and put their CC info and shipping info at the bottom.
  • Proven Sales/Customer Demand – Having proven B2C sales helped immensely in my case. If you’re product is good or unique enough, this might not need to be a huge amount of sales. I attached a line graph to my follow-up emails, that showed a line going from $0 to $xx,xxx/mo in 2 years, and it impressed many reps.
  • Retail-ready packaging – There’s a lot that can go into nice retail-ready packaging, and it’s different for every product. Google it.
  • Display options – Having at least one product display will be essential. New stores are more likely to give you a chance if you have some sort of display unit. Google or Pinterest it and/or walk around your local big box stores and see what other brands are doing.
  • A Healthy Profit Margin – Showrooms/Distributors will take a percentage of the revenue. It varies by industry… my showrooms range from 10% - 17% commission. Know your numbers, and have a target commission range in your mind before getting into a negotiation. Showrooms will also charge a once a month, or once a quarter "Showroom Fee", to cover their overhead.


How Do I Get My Products Into a Showroom?


This process was so simple, that I will give you the exact steps…

1. Find all relevant wholesale market centers for your industry via Google. For example search: “Kids wholesale markets” or “Biggest kids wholesale market centers”. For me, this was Dallas Market Center, L.A. Kids Market, New York Kids Market, and Americasmart in Atlanta. If you sell housewares, Chicago and Las Vegas are big ones. Try to find market centers in each of the “Big 4” territories: West, South, North East, South East. Midwest if you can.

2. On the market center website go to “Showroom directory” or “Exhibitors”. Sort the directory by relevant niche/industry.

3. Go through the entire directory, and take 10-15 seconds to click on each showroom and see if your product would be a good fit with the other products that they sell. Showrooms tend to sell product lines of a similar style.

4. Any showroom that seems remotely relevant, grab their email from the directory, which 99% of the time goes directly to the decision maker, and add it to a spreadsheet.

5. Repeat this process for the all the top market centers in your industry that you can find in google, until you have a big list.

6. Email everyone on your list (or have Quickmail do it). If they don’t respond to your first email, follow up with another email every 3 business days until you get a response. Many showrooms responded to me same day, after I sent the first email. These people are GOOD at responding to email (MUCH better than B&M store owners). Here is the exact email I sent out:

Subject: Appropriate Person?

Hi,

My name is [NAME] and I'm the owner of [BUSINESS]. We’ve shown good growth in B2C sales in the last 2 years, now averaging [$XX,XXX] in sales a month, and I am looking for a distributor/showroom to help us scale our wholesale sales.

Could you please direct me to the person that handles new vendors for [NAME OF SHOWROOM]?

Thanks so much for your help!
7. Showrooms will look up your website and check it out, and if they like you, they will respond back and ask questions and set up a phone call. If they don’t like you, you’ll get an “I’m sorry, but our showroom is not taking additional lines at this time”.

8. Work out the details of their paperwork, requirements, and set them up with a display and product for their showroom.


What’s the Catch?

There isn’t one. Literally, after 6 hours of work, most of it spent going through directories, I nailed down a showroom in Atlanta, Dallas, Los Angeles, 1 Midwest rep, and am currently in negotiations between 2 showrooms in NYC and Boston. I have the entire U.S. covered.

I can’t tell you how many hours I’ve spent in the last year running cold email campaigns on lists, and doing countless follow up, and the end result was only getting placed into 60-ish stores. I’m glad to have that extra income now, and it was good for me to learn the wholesale process, but overall it was a huge waste of time.

I will be selling my business soon, and I hope that this wholesale growth will increase my sale multiple by 0.5% - 1%, as having offline income makes my business more legitimate and less risky than being “Just an Amazon business”.



I hope that was helpful for some of you. Feel free to Ask Me Anything about the process, or share your own experience getting into wholesale.

I'd also like to hear any perspectives of people who have dealt with showrooms/reps from the buyer side.


Take action on getting into wholesale this week.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Last edited:

Scot

Ductus Exemplo
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,759
12,644
2,796
Florida
This is very interesting stuff! I've never heard of the showroom thing before.

Question, you're getting into the showroom, but have you actually secured any distribution deals?
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
This is very interesting stuff! I've never heard of the showroom thing before.

Question, you're getting into the showroom, but have you actually secured any distribution deals?
Getting into a showroom is the deal.

They take the orders, follow-up for the re-orders, and then they tell me what and where to ship.

Showrooms do not buy or stock any inventory from me, which is the main difference from a Distributor. Showrooms also take less of a cut.

However, though Showrooms are not Distributors, they will help me significantly increase the distribution of my product. The terminology is a little confusing. I used "distributor" in the thread title, as more people might recognize that term, vs. showroom.

Think of showrooms as "premium sales reps". Like, if a sales rep had many wholesale buyers coming to see them 2-3 times a year, rather than having to hit the road and go out and find buyers. My Midwest guy, is a typical sales rep that I found from an industry specific Midwest sales rep group... as their aren't really any showrooms servicing the Midwest in my industry.

The difference between a distributor vs. a sales rep - Lucky Break Consulting Blog
 
Last edited:

Scot

Ductus Exemplo
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,759
12,644
2,796
Florida
Getting into a showroom is the deal.

They take the orders, follow-up for the re-orders, and then they tell me what and where to ship.

Showrooms do not buy or stock any inventory from me, which is the main difference from a Distributor. Showrooms also take less of a cut.

However, though Showrooms are not Distributors, they will help me significantly increase the distribution of my product. The terminology is a little confusing. I used "distributor" in the thread title, as more people might recognize that term, vs. showroom.

Think of showrooms as "premium sales reps". Like, if a sales rep had many wholesale buyers coming to see them 2-3 times a year, rather than having to hit the road and go out and find buyers. My Midwest guy, is a typical sales rep that I found from an industry specific Midwest sales rep group... as their aren't really any showrooms servicing the Midwest in my industry.

The difference between a distributor vs. a sales rep - Lucky Break Consulting Blog
Ok so then the showroom acts as a broker. The broker has a big shopping mall of products and say, a Target buyer comes to the mall and says "I want these items, this qty" and he places the order through the broker/showroom rep?

So instead of it being a traditional distributor, it's a way for a broker to pull everyone together to attract retail purchasers to buy from them..?
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
Ok so then the showroom acts as a broker. The broker has a big shopping mall of products and say, a Target buyer comes to the mall and says "I want these items, this qty" and he places the order through the broker/showroom rep?

So instead of it being a traditional distributor, it's a way for a broker to pull everyone together to attract retail purchasers to buy from them..?
Yeah, you got it. This is exactly how it works.

I think the biggest value a traditional distributor adds is when you're selling product in another country, and don't have the infrastructure or knowledge to ship out individual orders.

It is no big deal for me to have my warehouse guys ship out orders that a showroom takes in. I don't even have to stock extra inventory, because in my industry (kids apparel & accessories), the norm is to deliver product 1 to 3 MONTHS after a big Market event. So, I can just wait for a bunch of orders to come in at a Market, then pay my supplier and have them make the exact quantity of product that I need, then ship out to customer.

I have enough inventory on hand to handle day-to-day re-orders from current customers, of course. Re-orders I'm able to ship in 1-2 business days, and my wholesale customers love it.
 
Last edited:
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
What kind of profit margin would you recommend before getting in to wholesale? What margin do the buyers look for?
Margin norms vary widely by industry.

In kid's apparel & accessories, stores want "keystone pricing", where retail price is double the wholesale price. And for my products, the wholesale price is double my COGS.


I make close to the same amount of profit, whether I'm selling B2C on Amazon or my Website, or whether I'm selling wholesale.

Selling online costs more in Amazon commission fees and/or ppc costs.

In wholesale, my only extra costs are my 15% commission to the showroom, and the monthly showroom fee.

When I sell direct to B&M stores, the per-unit profit is BETTER than selling online, however, it is difficult to scale, and is time consuming (For example, a store that I reached out to in July 2016, just placed an order... and that was after I consistently followed up with them every couple of months).
 
Last edited:

Scot

Ductus Exemplo
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Jul 10, 2016
2,759
12,644
2,796
Florida
Yeah, you got it. This is exactly how it works.

I think the biggest value a traditional distributor adds is when you're selling product in another country, and don't have the infrastructure or knowledge to ship out individual orders.

It is no big deal for me to have my warehouse guys ship out orders that a showroom takes in. I don't even have to stock extra inventory, because in my industry (kids apparel & accessories), the norm is to deliver product 1 to 3 MONTHS after a big Market event. So, I can just wait for a bunch of orders to come in at a Market, then pay my supplier and have them make the exact quantity of product that I need, then ship out to customer.

I have enough inventory on hand to handle day-to-day re-orders from current customers, of course. Re-orders I'm able to ship in 1-2 business days, and my wholesale customers love it.
Nice, this is pretty cool. I'll have to see if this exists in the consumer packaged goods space. I know in the food industry we have brokers, but this seems like a much better deal than a traditional broker.
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
Nice, this is pretty cool. I'll have to see if this exists in the consumer packaged goods space. I know in the food industry we have brokers, but this seems like a much better deal than a traditional broker.
Yeah, I thought about you food industry guys while I was typing up this thread.

I'm not sure that something similar exists for you.

A "showroom" for food products would be kind of weird, TBH.

I know for sure this method would work for anyone in apparel or housewares.


My method was more of a guide... and if you are in a different industry, then it will spark some ideas or give you clues on how to approach the wholesale process in your industry, in case there is something similar.
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
So when Target shows up and wants $50k in product. They order through you or the showroom? How and from whom do you get paid?
Buyers order through the showroom. Reps try hard to get an order on paper before that Buyer walks out the door.

However, showroom owners have told me that sometimes Buyers will take a catalog to look over later, and then end up contacting the brand directly to place their order. Via the terms of the agreement with the showroom, I am supposed to send over commission for this order if it occurred in their territory. However, if I took the order directly, they might not ever know, but then you risk getting dropped by the showroom if you're caught doing that.

The orders I've gotten so far have been credit-card numbers on an order form, emailed to me by a showroom rep. So, Buyers are paying me directly, and then at the end of the month, I create a list of orders placed and the commissions due, and send the showroom a check.

I am not sure how a big box would pay for a $50k order, but I'm sure it wouldn't be by credit card, and it would probably have terms attached. I'm also sure the showroom would want their commission for this. TBH, I don't think that big box buyers are shopping around in these places.


I will say this: When looking through all of the lines carried by all of the different showrooms in the country, my general impressions is that the lines carried are small to medium-sized brands. I recognized some of the names, but there weren't any nationally-recognized brands carried by showrooms. This suggests to me that there comes a point in a brand's growth where they "outgrow" the showroom, and maybe at that point start going direct to stores. I guess this happens at the point that you have so many stores coming to you to stock your products, that you don't need a middle man anymore.
 

Don't like ads? Remove them while supporting the forum. Subscribe.

Last edited:

BlakeRVA

Bronze Contributor
Read Millionaire Fastlane
Aug 24, 2015
35
106
131
25
So when Target shows up and wants $50k in product. They order through you or the showroom? How and from whom do you get paid?
My dad has been attending these trade shows for 25+ years and I have worked at two of the big Markets in Atlanta.

From my experience, it is uncommon for some big box retailers to come strolling through your showroom. These shows have lots of small and medium size business owners and buyers walking around making purchases, but it is rare to have a squad of buyers from Bed Bath and Beyond walk in.

Keep in mind though that these companies are often spending $XXX,XXX to have these showrooms year round (which is why renting a section of the showroom is so sexy). Many of the showrooms and companies my Dad has represented do 7-figures in sales at the show and the weeks following. This is a great opportunity to do high volume selling and get some face time with larger customers.

As a word of caution, be selective of which showrooms you decide to work with. One of the companies my Dad consulted with rented out space in a showroom who seemed to have a shared aesthetic and would be an easy sell. They set up their products and merchandized everything well, but the sales reps in the showroom could hardly be bothered to sell for another line. The line had such a disappointing performance at the market that they ended up discontinuing the contract.

I do not say this to discourage anyone from doing this - it is a great way to get yourself up and going. I am saying however that don't think anyone who is willing to take you in is a good fit. Be selective with who you allow to represent your brand.
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
As a word of caution, be selective of which showrooms you decide to work with. One of the companies my Dad consulted with rented out space in a showroom who seemed to have a shared aesthetic and would be an easy sell. They set up their products and merchandized everything well, but the sales reps in the showroom could hardly be bothered to sell for another line. The line had such a disappointing performance at the market that they ended up discontinuing the contract.
Ok, so the situation you're describing is a bit different.

There are some large brands that will open a showroom that is mainly, or exclusively, their own products. It sounds like in the situation above, the company rented out space in a showroom like this... and it worked out about as well as I would have expected it to.

The showrooms I'm referring to in the OP have reps that showcase 12-24 different brands, and are not partial to any of them, other than the ones that consistently make them the most commission, I suppose.

I do not say this to discourage anyone from doing this - it is a great way to get yourself up and going. I am saying however that don't think anyone who is willing to take you in is a good fit. Be selective with who you allow to represent your brand.
This is good advice. This is why I recommended going through an entire directory and starting with only those that you think your product would be a good fit with. Would a buyer for those other products be likely to buy your product.

When you're getting started, it's hard to know beyond that if someone is going to work out well or not, other than by listening to your gut.

In my case, I took the shotgun approach, and took what I could get. I got 1-3 interested leads per geographic region, and made my choices from there, based on email and phone conversations.
 

Vigilante

Legendary Contributor
Staff member
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
Oct 31, 2011
9,848
57,533
4,655
Gulf Coast
So when Target shows up and wants $50k in product. They order through you or the showroom? How and from whom do you get paid?
Big box buyers don't go to the markets.
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
So 2 showrooms are up and running and have had their first markets.

Dallas Market reportedly was very slow this year, but they managed to take 3 orders from new accounts.

California Showroom has sent me 2 orders from new accounts from their market.

Atlanta Market takes place this month, as does NYC. Midwest sales rep will hit the road with my products in August.


Results are not what I hoped they would be, but I'm going to give it the rest of the year and see how we do.

It would have been better if I had set this up 1 or 2 years ago, before the niche really exploded, and when there were very few wholesale options. My product is basically a commodity, and many stores who already wanted to sell the product, likely have another brand they are selling.
 

IGP

Gold Contributor
FASTLANE INSIDER
I've Read UNSCRIPTED
Speedway Pass
Aug 24, 2015
506
1,329
426
46
@amp0193 - Seeing how these are wholesalers already, what stops them from just going and sourcing the product themselves? Or do you find that is not an issue.

I've got a solid product in the baby niche (I assume your old site was in a similar niche), we've done over 500K in revenue this year. I've managed to build a solid brand around it, but the product is easily sourced an my concern would be a wholesaler in the baby niche would just go directly to the source. Thoughts?
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
@amp0193 - Seeing how these are wholesalers already, what stops them from just going and sourcing the product themselves? Or do you find that is not an issue.
Who, the sales reps? They are managing like 20 brands, and 100s, maybe thousands of skus. They don't have the time or desire to source things themselves, or to carry any inventory. They're model is to sell other people's stuff, in exchange for a commission.

If you mean the stores, then they have even less time to source products (unless their name is Trader Joe's or Buc-ee's and that's their business model).

I've got a solid product in the baby niche (I assume your old site was in a similar niche), we've done over 500K in revenue this year. I've managed to build a solid brand around it, but the product is easily sourced an my concern would be a wholesaler in the baby niche would just go directly to the source. Thoughts?
Yes, it is simple to source this product, relatively. However, if someone has never sourced a product before, they wouldn't know where to start. Importing stuff from another country is scary.

And again, they don't want to carry inventory.
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
Update to this thread:

I sold the business last week, and by the time we closed I had 3 showrooms sending me orders regularly, and 1 sales rep in the midwest doing the same. My NYC showroom was unable to get any new accounts in her first month, so she dropped me.

Some final numbers from the time of sale:

100 accounts total.
31 accounts came from sales reps in the last 3 months.

My guess is at this time next year, the total number of accounts will double to 200, with no work done by the new owners of the business, and relying solely on sales reps.


Most importantly for me, was that developing the wholesale income for the business was a huge value add that helped get my business sold.

If you're only selling on Amazon, you should think about diversifying off-line.
 

IGP

Gold Contributor
FASTLANE INSIDER
I've Read UNSCRIPTED
Speedway Pass
Aug 24, 2015
506
1,329
426
46
Update to this thread:

I sold the business last week, and by the time we closed I had 3 showrooms sending me orders regularly, and 1 sales rep in the midwest doing the same. My NYC showroom was unable to get any new accounts in her first month, so she dropped me.

Some final numbers from the time of sale:

100 accounts total.
31 accounts came from sales reps in the last 3 months.

My guess is at this time next year, the total number of accounts will double to 200, with no work done by the new owners of the business, and relying solely on sales reps.


Most importantly for me, was that developing the wholesale income for the business was a huge value add that helped get my business sold.

If you're only selling on Amazon, you should think about diversifying off-line.
What was a typical order unit wise? I assume you have minimums like 50,100 or 500 MOQ? Or is that something that sales reps frown upon.

I would think that the bigger the order the better for a sales rep, but it may also be more work to get someone to commit to a 500 unit order.
 
OP
OP
amp0193

amp0193

Legendary Contributor
EPIC CONTRIBUTOR
FASTLANE INSIDER
Read Millionaire Fastlane
I've Read UNSCRIPTED
Summit Attendee
Speedway Pass
May 27, 2013
2,695
11,532
2,454
United States
What was a typical order unit wise? I assume you have minimums like 50,100 or 500 MOQ? Or is that something that sales reps frown upon.

I would think that the bigger the order the better for a sales rep, but it may also be more work to get someone to commit to a 500 unit order.
It completely depends on the product.

You should probably have an MOQ. It just needs to make sense.

My MOQ was $150, which was about 6 weeks of stock for the average store. I did free shipping and counter display on orders over $300.
 

Create an account or login to comment

You must be a member in order to leave a comment

Create account

Create an account on our community. It's easy!

Log in

Already have an account? Log in here.



Don't like ads? Remove them while supporting the forum. Subscribe to become an INSIDER.

Post New Topic

Please SEARCH before posting.
Please select the BEST category.

Post new topic

New Topics

Fastlane Insiders

View the forum AD FREE.
Private, unindexed content
Detailed process/execution threads
Monthly conference calls with doers
Ideas needing execution, more!

Join Fastlane Insiders.

Top Bottom