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I posted this in the original thread, but thought know one would see it so thought I would start a new one.
Can anyone help me? Or is my business model not fit this forum? Just to be clear, I am close to full time. Have 40+/- dealers of my products in 5 states. I have a product that sells, and need some advice if anyone has it.
Or - build a retail website, and price the products the 5-10% higher than the brick and mortar stores, then spend some money for google and facebook ads. Offer repeat customers a small discount for volume orders through the website. The brick and mortar stores would get a wholesale price.
Stop driving around delivering product. Customers will pay for shipping, but don't pay you to deliver.
You are the salesperson. If you hire anyone, it should be to help you make products.
If 40 dealers can't provide enough orders to put you in a full time woodworking job, you might not have a viable product line.
Hey Rich, thanks for the advice. Not to pick on you, but this is an example of why this might not be the best forum for me.
You see 40 dealers and that seems like a lot.
It's not in the gift market.
Out of those, 15 are core dealers. 15 are fringe dealers. 10 may never order again.
So it's different than cabinets or furniture.
Who is your end customer?
Do you want to sell these to the guy who puts the letters on his house or the guy who sells to the guy who puts the letters on his house.
40 dealers is a lot. But I guess your description of a dealer is different than mine. 10 businesses that may not order again are not dealers. Before you go to a big wholesale show, you should already have interviewed people and have a core group of prospective employees. There are businesses that will box and ship your product. Just drop off inventory and addresses and then get back to work. Two ways to prepare for more business before you ever go to the show. What will hurt you on a big show is the time to build inventory for it, and then not selling. It kills your current production time, and then you're stuck with samples or inventory.
Concerning your 40 accounts (really 30 for sure or could only be 15). Do they have enough sales to cover your income full time at this point? Why do you deliver? That is a lot of time that could be better spent in production. Use UPS or FedEx, as they can do it cheaper than what it costs you in lost production.
I sell retail products to retail outlets as well as direct to the consumer. I have done the Atlanta Gift Show 7 times over the last 11 years. It is expensive and you do meet a lot of potential customers. However, my best retail outlets have never met me at a trade show. They found me through the internet. So I am no longer attending trade shows and putting my money into my website and marketing on the internet to retail websites, retail stores, and catalogs.
I would suggest using the $8k for the trade show and build/update your website to include a page about wholesaling to gift stores.
Also, use the site to sell to your retail customers where you will make more money as you are selling retail. Do you have an ETSY store? This is another way of getting your product out to the market.
It is my opinion that the consumer is shifting from buying smaller items, such as what we make, from the local gift shops and are now buying them more on the internet. I feel that this will only continue.
So for this reason, I increased my spending on marketing to the final consumer so I can generate more profit from each sale by selling retail.
We used to sell oak breadboxes through mom & pop kitchen stores. We opened 42 stores in 70 days. If this who you want to sell to there is a way to do this.
Puzzleman is right about the internet.
I think your post is a perfect fit. We do a bit of wholesale to gift shops as well and I know exactly what you mean. You may have 30 shops that stick with you and order a few here and there because its simply not something a shop is going to sell 150 of per week.
I couldnt agree more with the website and a wholesale component to the website. We did this in a past business and will be doing it again here shortly. It handles your salesman position for you while your small and growing.
Also agree with getting away from the outside the shop side of it (deliveries). Cut your visits to your outlets down to once every other month. Start using UPS, FedEx, or USPS flat rate boxes, and stay in the shop making.
I live within a 3 hr drive of 4 major cities. I deliver to each region once a month. Every once in awhile I will stray from that for a good customer, but not very often. So its not like I'm spending half my time delivering. I don't think shipping it would save very much time. I would spend a whole day packaging everything. Delivering also allows me to sell small furniture that would not be able to ship fedex/ups. Delivering has been part of my business plan from the beginning. Not saying I wont change, but not at this time.
For various reasons, I wish to stay 100% wholesale. Again, I may change, but not at this time.
Some weeks I have plenty of orders to pay full time salary, some weeks not. I have a new product(picture frames) that a lot of my stores are pretty excited about. I am hoping they help put me over the top.(along with a few more stores)
I do have a wholesale only area in the works for my website. Just not done yet.
I sell to gift shops, florist, primitive stores, and a few furniture stores. My idea is to find one good store in each town in every region and guarantee delivery once a month on a set schedule. So far it is working pretty well, just getting harder to find time to sell.
My terms are payment do upon delivery, no credit cards. So far, it works.
One negative that I cant seem to shake is that some stores don't think of me as a legit supplier. I have been to stores that would sell the crap out of my products, but turn their noses up at me for some reason. I have business cards, brochures, catalogs, website, etc. I don't know what else to do to change this. Any suggestions?
Thanks for all the advice.
Oh, I forgot to mention, I do have a couple semi retired guys lined up to do delivering for me when I get enough business to do so.
Maybe legit companies look different from you? How many of them have the boss show up to do deliveries for low cost goods? If I was a buyer, I'd be wondering about your ability to deliver quantities on time if you showed up at my door, having personally performed a function that can be so easily outsourced. You might think that it's charming, but others probably see it differently.
I agree with Paul as to part of the perception of your potential customers. Also, your terms are not the norm in business. If you wish to be perceived as a legitimate business, you should act like one. This means having delivery companies (UPS, FedEx, USPS) do the deliveries. This means extending credit or accepting credit cards from your customers. If these are not something you wish to change, then people's perceptions will not change.
Concerning your volume change from one week to the next. Having only 15 accounts that you can count on is not very large (unless one of these accounts has several dozen or hundred stores). You need to expand your reach to customers from just what you can drive to. By having many customers, you can level the work flow (also cash flow) as one will pick up when another falters. You also need more customers as they may go out of business, ownership change or for whatever reason they no longer carry your product.
I know that it is tough to start out. I have been there and some days feel like I am still there.
As far as your decision to not sell retail. You have your reasons. I understand that. However, I feel that you are missing a large opportunity to increase your volume of work and increased profits. Businesses do not pass opportunities to earn income whether it is wholesale or retail. When I started out, I was 100% retail and now I have switched it so that my work is 80% wholesale. I continue to work to improve my retail presence (sales) and my wholesale presence (sales).
If you really want people to view you as a business, act like one.
Paul you make a great point and I have thought about it in that way. But these stores judging me for being different is extremely hypocritical. They specialize in different, lol. Also, most of the owners work the showroom floor, unload trucks, etc. You could say the same for them. This is one issue, but it isn't the biggest issue.
Puzzleman, All of the stores that buy from my love my business model and have zero issues with not accepting CC. The stores that turn their noses, it never gets to that point. If it comes up, I have it available.
There are plenty of stores in my territories that I haven't got to. So I don't feel that I need to expand my territory, just reach more of them.
Going to shipping would not save me anytime. The one day a week I deliver would easily get eaten up by packaging. I have delivered 200+ pieces in a week. Some of could go into one box, but a lot of it couldn't. Not to mention that I have over 100 different sized items. Which means I would have to invest in a ton of boxes/packaging to make it viable idea to ship. I know that the stores pay for the boxes, but I have to inventory them which would require space I don't have.
Someday I might ship, right now I will not.
Are there salespersons in the gift market that carry multiple lines and visit stores on a regular basis? Kinda like furniture? Sorry if this is a dumb question, but I honestly don't know the answer.
Gift stores divide into small Mom & Pop highly fragmented operations or else are larger entities with several stores under one umbrella. In the small shops the typical owner spends half of his life looking for merchandise and the other half staffing the retail side. He spends all of his life waiting for Christmas because 100% of his lifeblood comes from that season.
The larger operations tend to be more conservative and will only buy from you if you look like you can deliver. Part of looking viable is having the wherewithal to ship product. Just like you have very little time to drive around they have very little time for random people that show up on schedules they don't control.
The typical gift shop carries a wide range of product. They need some glass, some brass, some wood, some cloth & paper products. They only have a limited amount of shelf space for wood. They need to have a variety of products because their typical customer is just browsing and tends to make opportunistic purchases for souvenirs etc.
Most of the product on these shelves come to them from manufacturer's reps who either show up on a regular schedule or display at a trade show. These salespeople know that the buyer's for these stores are busy people. Their offices are stacked to the brim with samples, post-it notes and coffee cups. The salespeople have about three minutes to make their pitch.
The manufacturer's rep knows that the store only has a limited amount of shelf space for wood products so tends to promote the ones that pay the highest commission. A typical percentage to a manufacturer's rep is at least 25% and can go higher. You will give over half of your profit to the salesperson if you go this route.
The stores that can buy & sell a lot of your product (and pay you on time) won't talk to you if you try to sell them on a cold call basis. For the same reason you would not want random salespeople just showing up neither do they. This is not about personal relationships.
The money and time you spend being on the road is better spent doing other things.
Great post Cabmaker. I agree with everything. I used to run a retail business(furniture) so I totally get it. Although in furniture the commission is 5-6%. Kind of a shock gifts would be 25%. Figured it would be higher, just didn't expect that.
I wish I had better luck with emails, internet, etc. I just haven't. Well over half of the people buying from me right now 100% ignored emails I sent them before just driving there and showing them the product. Then they bought.
One store responded to my emails, and then decided not to buy. I went to her store so she could actually see/feel/touch the product, and she bought that day. She said she didn't realized they would this good of quality.
I have yet to sell anything not face to face.
Could we bring the focus back on selling rather than shipping/delivering? I'm not changing that part anytime soon so its kind of a waste of time.
Sales are the easiest part of the transaction but you got to stop selling and focus instead on making it easy to buy. To do this you have to get inside the store owner's head.
The store buyer is more motivated to not lose money than he is to motivated to make money. The concept of potential gain is theoretical. The concept of actual loss comes out of his pocket.
The store owner is less impressed buy how much profit they can earn by selling your letters than they is haunted by those cases of underwear they bought last spring and have to walk by each time they go through the warehouse.
In short, your customer has to like your product a whole lot more than 51% - 49%.
The best way to make this happen is for you to make it easy to buy.
The best way to close sales is to give away product. Make it easy to evaluate.
The best way for your client to evaluate your product is to just ship them a free sample so they can see the quality in person. This gives them something to touch and something to put on the corner of their desk. If it is on the corner of their desk other people can walk through the office and say "This is interesting, are we carrying this?"
Tell them if they don't like it they can give to their neighbor, burn it or put it in the dumpster, The point is to get it in their hand so they can get peer review of your product.
This is much different approach than you standing in the doorway like Willie Loman. Stay out of their face. You are as much of a pest to them as salespeople who show up unannounced at your office. Even with an appointment you are a PITA. Appointments just add more post-it notes to the store owner's life.
Include a small brochure with the product and a link to a website so they can ricochet your brochure to others.
If this method works step up your game and send out a batch of 30.
Thanks cabmaker, this is perfect! I thought of something like that, but the way you layed it out makes sense. Cost is materials is pretty inexpensive.
One of my most impressive products is a 3" thick letter cut from 16' pine timbers. Saying it or seeing it in a brochure is one thing, but actually holding a letter with both hands because one wont do the job is impressive.
You have some good advice here, but it seems to be falling on deaf ears.
1) Stop delivering your product and start shipping them immediately. Here is a source for shipping boxes where you can order as few as one at a time. https://www.uline.com/Cls_04/Boxes-Corrugated?dup=3
2) Start accepting credit and debit cards immediately. It will cost you somewhere around 3% of the sale, so raise your prices 5% to cover that cost immediately. Here is a link where you can get credit card processing for about 3% without equipment rental, recurring monthly fees and other unnecessary expenses until you reach a level where you are processing card transactions nearly every day and over $10K per month. https://squareup.com/
3) Start charging for shipping immediately. Perhaps you ship for free with a minimum order of $500 or some other several hundred dollar figure. Otherwise, charge the buyer for it. It will encourage larger minimum orders to reach free shipping levels.
4) Get out to see more new prospects with the time you have saved doing deliveries. When you build your customer base to cover 1.5 times your average weekly salary, you may then want to let up a bit.
5) If you treat this as a business, you need to act like a smart businessman. Sales is your lifeblood. You can always pick up the phone between new sales calls to contact your favorite past customers.
6) Modern commerce is done everyday with ordering from a website on the internet, and paying for things with a credit or debit cards. You need to get your business to that level immediately.
7) You've already cost yourself untold thousands of dollars in lost sales by not accepting credit cards, by insisting to deliver your products yourself, by not having a website where customers can order and pay for their order and by not beating the bushes for more accounts. Stop doing the stuff that isn't making you money and do the things that will put you in line for more sales and more profits.
2. The credit card thing is a complete 100% non issue. The only reason I brought it up is because someone said I will be carrying the mom and pop stores. Getting a check hasn't not been an issue. I had one store ask about CC, I said I prefer not to. She said that is fine and wrote me a check. I haven't had one potential customer balk because of CC. If I did, I have a square account and I wouldn't care about the 2.75% if it meant closing a deal.
3. This I have thought about. Eventually I may start.
4. Already addressed. I will save zero time packaging and shipping vs delivering. Remember, its 4 days a month. Those days would be used to package, label, deal with broken shippments, etc.
5. Contacting existing accounts is something I need to improve on.
6. I have my reasons for not selling retail. There are lots of companies that don't. The main reason is that I got burned out on retail couple years back. Dealing with end consumers sucks. At least business owners have a knowledge of how the world works. Consumers are clueless. I know e-commerce would be different, so I am not ruling it out.
Also, some of my stores do not want me to sell on the internet.
7. My business model has largely been a success. Just as I get closer to full capacity, its getting harder to find time to establish new accounts. Yes, there has been a few stores here or there that turned their nose up at me. Its not like its the majority, or even a lot.
CWWoodworking, Can't help myself, I have to ask. Why did you ask for business advice? You seem to be really pleased with the way you are now.
Rich, I asked for advice on establishing, contacting potential accounts. Half the responses are about shipping and CC. CC is such a joke it's funny. It wouldn't even crossed my mind if someone didn't bring it up.
Whether you like it or not, my shipping is what it is for the time being. I asked to move on and yet here we are talking about it again.
I am grateful for the advice for establishing new customers. As for as the shipping, let it be.
I i am far from knowing it all. Quite honest, i question weather this will work or nkt daily. Just can't stand repeating myself like I'm talking to my 11 yr old. Lol
Read your initial post. You want advice on establishing new dealers as growth limits your time constraints. You mention showing at the Atlanta gift show, why? You have no interest in growing your business beyond your local area and stubbornly reject any business model adaptations that include modernizing/expanding your current methods.
Hire a salesman, why? Any legitimate, successful salesman will repeat a lot of the advice you've already rejected. Why would they want to work for a company that's run by someone that resists common sense and refuses to implement simple steps to promote growth?...They wouldn't.
Perhaps you should focus on adding another semi retired salesman to the stable of semi retired delivery guys you plan to employ because they won't really care whether your business survives or not.
Shipping saves no time over spending at least 4 days a week in your truck? Complete BS. No explanation needed.
Client couldn't tell the quality of your products until shown in person. Are you not clear on the signal that sends? That's Chinese for your website/product imagery sucks. I would encourage you to hire a professional photographer/designer that's capable of setting up a professional photo shoot with high quality images. I'm confident you have a reason why your existing marketing isn't the issue.
When you start a thread asking for advice on growing your business then walk back your initial inquiry by suggesting your not currently full time business model is a success, have little to no interest in expanding or amending your business plan and comment that you feel like your talking to children, don't be surprised when business owners with years of experience have no interest in replying to any future inquiries you may present.
You've posted here before, learn from that experience. It's a public forum and you'll get a range of opinions whether you want to hear them or not. Despite the tone, most are trying to help. You don't have to respond with bullet point explanations to every comment.
Launching and maintaining any small business is a challenge that needs constant navigation of changing currents and tides. Your business plan is a guide, it's not a concrete foundation and needs to be fluid. Keep an open mind to any number of opportunities to grow, even if they aren't ways you envisioned your company proceeding. I've been involved with three separate businesses, none of them resemble the initial concept that was conceived at their launch. Each one adjusted to market demands and opportunities. Each one would have probably failed had they not adjusted on the fly.
Nothing wrong with feeling good about your successes, but don't mistake small gains for more than they are. Your business is on precarious footing and will continue to be for years to come, embrace that and use it as motivation to continue experimenting. If your shop is too small and constricting growth, find a larger space. Getting traction and growing involves taking risks, often before the money's rolling in.
Take any feedback as data points and don't focus on each one, assess the sum total, discard outliers. That applies to your product line as well. Keep developing new products and don't hesitate to drop ones that aren't selling. You mentioned a wide variety of sizes, think about streamlining your offerings if it helps simplify production and maximize your time. You don't have to offer shipping on every product. If some items can be easily packaged offer those to start with or sell them in quantities with 'free shipping' as someone else mentioned and make sure to cover shipping costs when determining pricing. Remember, you're not just selling wooden letters, your selling a brand. If you get any sense you're not viewed as a legitimate supplier and this is costing you sales, don't take it personally, be proactive and take whatever steps are necessary to enhance your company's image.
Thank you for your responds. I realize my business plan is, to say the least different. I get it. Believe me, you, or anyone else hear isn't the first to tell me. But until it becomes a hinderness and not an asset, I will continue with it.
Almost 100% of my "success" has been because of my plan. So forgive me, if I am not gonna change it over night.
The bad part is this. I wanted help with establishing new clients easier.
I think 3-4 post helped with that. And here we are, what, 20+ deep.
I asked politely to drop the shipping thing, because I am not gonna change it at the present moment for various reasons.
And that was all that was talked about afterwards.
Yes, I have products that could ship. I have offered a reasonable shipping plan so each and every store could take special orders on said products, and so me and them could make money. ***NONE*** of them took me up on it. They liked the once a month plan.
Despite being a "specialty store" product, almost none of them want to take a special order. They just want to sell of the shelf.
Maybe my plan should be the obtrusive guy who just stops by once a month? One of my dealers just tells me to bring her some stuff. lol. One other dealers is somewhat interested in some Picture frames. We are having schedule conflicts, so she said just drop an order off and I will send a check.(and she would)
Crazy women is 95% of my clients. Just trying to make sense of it.
I think I'll stick to reading and not posting. Despite what people think, I read hear all the time and rarely post.
I was asked to check back in a year when I asked if bandsawing letters was a viable option. I will check back then. Still don't know.
What is your wholesale pricing like? How much do you sell your 11" and 7" letters for? You could be one of those people who say you're "wholesale" but you charge retail pricing. Ever go to one of those "wholesale" cash and carry shows? Nothing but vendors who are selling "wholesale" for more than they sell it on the street retail at craft shows for.
Your business plan sucks, that's why retailers who are serious about their business won't buy from you.
Besides margins, a number of great concern to any legitimate retailer is INVENTORY TURNOVER. Under your half baked business plan, the maximum turn a retailer could have on a hot selling product is 12x. If they sell out they have to wait to catch you next month when you're in the area. Any real business would want to be able to re-order inventory and get it in stock as soon as possible.
You said all your clients are within a 3 hour drive from you. That should be a UPS/FedEx Ground Zone 2. You can ship a big box of letters for less than $20 and they will have it the NEXT DAY. You get overnight delivery within a 150 radius with Ground service. But under your brilliant plan you would rather spend 3 hours driving there, and 3 hours back to save that $20, plus the cost of fuel and wear and tear on your vehicle. You're valuing your time at a 1980's minimum wage level. Don't cry about boxes. You make 11", 7" x 5" letters. You can find one size box that these will fit in.
I don't necessarily agree with all the guys on here who say just charge for shipping, people will gladly pay it. That's not true, and is becoming more untrue every day in the retail world. Small store owners are cheapskates who will fight you for every penny they can get. So maybe offer free shipping on orders of $200 or more, and charge under that. Don't be one of those cheapskates who is going to cry over $20. It's a cost of doing business. Don't you dare ship them product (especially for free) and then wait to get a check. Credit card or PayPal in advance. Again something that any REAL business does. Don't cry about the 3% fee. Don't be one of those bozo's who tries to pass it on the the customer either.
I understand you wanting to get out in the field to meet with your clients, and try to sell them larger items that cost a fortune to ship. There is absolutely nothing wrong with that. However you should consider that a relationship management and market research activity, not your daily operating procedure to stock their shelves. That's not how you grow a business.
Only allowing one small-town store per city that's run by a crazy woman who needs a hobby is not how you scale your business either. You're making a product that can easily be knocked off by anyone, you're not making an exclusive product. It's also somewhat of a FAD product now thanks to Fixer Upper. Make all the money you can while you can. Get your product in every store you can. If you don't someone else will.
Getting good, new customers is always difficult. How potential customers view you and your ability to produce to their requirements is every bit or more important than the product you are pitching. I have to admit, if I was making what you are I would be selling on the net. A slick website with lots of links can make anyone look like a legitimate business.
Hey guys thanks for everything. I think I am just being too impatient. I have only been doing this full time since April. I have added new dealers at least 1-2 week.
I think I have to come to realization of 2 things- 1. some store are just broke and not doing very well. 2. Some are very long in the tooth, and wouldn't buy a golden egg from me just because there grouchy, lol.
When delivering gets to the point that its an hindrance, I will start offering shipping. But it hasn't been for the most part.
Jerry, I'd rather not post wholesale prices. Lets just say that 99% of the stores buying from me are happy with what they are making and the margins are on par with other products they sell. I have asked these questions, cause I am new to the gift seen.
Also, I can say with a good amount of certainty that any of my store would be thrilled with 12 turns a year. And as I said, I offered a quicker shipping program, no takers. It was more than fair.
Honestly, guys, The delivery day seems to me one of my most productive days. I get paid, ship product, show new product to existing customers, write orders, establish new customers.
I think the misconception is that I sell items that are cheap. Which is true. 5-80$. But when in reality, I delivery thousands of dollars of product at a time. Just like if someone sold a kitchen that was an hour or two down the road. Its not much different except I have a lot less invested(materials/equipment wise), and have to make more stops. That's it.
Well I guess my advice to you is that if you're happy with your results then keep doing what you're doing. If your customers are happy then that's even better.
Since I was in your exact position 20 years ago, I can definitely say that doing a wholesale show (such as Atlanta Gift Mart) would probably be a huge waste of time and money. Back then in those days that was HOW trade business was done, and to the small producer the costs involved just did not provide many results.
Whether a great wholesale website, or retail website, your money will be much better spent there than in Atlanta.