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RiverMan

markup-wholesale to retail

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I am trying to set some prices for wholesaling my tackle. I had been told that a 40 percent markup from wholesale to retail was a good "standard" to use. I was also told that some large retailers such as Wal-Mart will mark up products 100%.

Anyway, I have a good feel for what my products should retail for and have been trying to work backwards from this number to where the wholesale costs should be. I would appreciate any thoughts from you guys with more experience than myself in this regard. Thank you.

Jed

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The 40% mark is about right for packaged lures at most independent tacke retailers, so that should give you a pretty good reference point. Of course if you are offering product that other wholesalers aren't, or there is a particular demand for YOUR product, or if there are unique custom touches your product has that others don't then your pricing should reflect that to the point you think dyour market will bear. Of course you don't want to immediately price yourself out of a market, but neither do you want to begin raising prices when your products "take-off", which tends to upset dealers. Be aware also that most shops buy from wholesalers, in small quantities as opposed to mass-marketers like Walmart who buy Huge quantities on contract manufacturer direct, which enables the manufacture to know his profit margin from the word go which in turn gives a mass marketer an important negotiating tool for their best price. All of which is to say, Walmart and Joe's Tackle Shop are apples and oranges. Also with truly custom stuff people expect to pay more than for mass-produced stuff; and you should truly be paid for your time. Don't forget too, that you're eliminating the middle man and that you can give direct guarantees. Don't know if you're approaching dealers cold, but the are your best ally: be generous with some sample product and if they believe in it they will be your best salesmen. And nothing beats that kind of word of mouth. Hope this helps. :D

Dean

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Dean and others,

Thank you for taking the time to put together such a well thought response. I will carefully take into consideration your advice. I will soon be approaching dealers "cold" as you so accurately labled. I am a biologist by trade, not a salesman but will soon be finding out if anything I have will develop interest. There are many potential tackle shops within several hours drive of me that I would like to approach. What do you think about sending out some samples to some of them proceeded by or followed up with a phone call? I estimate that I could send out several samples of what I have for less than 5 dollars, my cost.

Jed

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Jed;

Be sure to send your product samples packaged as they will be for sale. Better yet deliver them yourself. Nevertheless, packging is important to the retailer, and to your sales. Your retailer will ant to see how you plan to package your item.

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Jed, I think that it is a good approach because it is a "soft" approach allowing tackle dealers to examine your merchandise on their own time--and it is generally death to try to hard-sell a salesman. Of course everbody is different, but at least you will minimize any wasting of time on everyones part. Just shoot everyone straight (maybe some of your product was developed with the analytical eye of a biologist? This product has proved productive for me under these conditions...?) If you can figure out a reason your product will be productive for their customers, then everybody wins :!: And when approaching dealers personally of course, try to do it hopefully when they suggest, or at least during slack times. Be their ally and not their adversary. Should go without saying but you'd be amazed how many people develop a chip (No offense Carolina!!) on the shoulder about their own "amazing" product that is taking the world by storm etc., you get the picture...and actually I very much like the approach, "I'm not a salesman, I'm a biologist..."

Good Luck :!: Dean

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