Direct, Retail, Wholesale

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WHERE DO YOU FIT IN THE MARKET PLACE?

You need to consider where in the market place your product will fit. Also what people would likely be willing to pay for it. From the retail selling price you should develop a wholesale price. That is the price retail stores would pay. Quite often a big buyer will tell you how much they would pay for your product and the percentage they would add on for their mark up. The reality of the market place may come as a real shock but don’t give up. You must have a minimum that you will take no matter how large the order. Unfortunately in some cases you may find that the thing you are making is costing more than anyone is willing to pay. On the other hand you may be surprised how much your efficiency will improve after getting a little experience. If you do a time study of direct selling you may find the individual packaging and handling is not cost effective. Think in terms that 6 seconds is .1 of a minute or 1/10 of a minute. Time can be your enemy or your friend but in business you need to be very time aware. If you sell Direct it does not take long before thoughts about a better way to market comes to mind. This is important. Direct selling to a consumer you must collect your money on every sale every time. So Direct selling gives you the retail price but for that you have to package the product, ship to the customer and collect your money. You have to do it every time, it is very time consuming. For my money selling at wholesale to retailers is the way to go!

Let me give you an example of what we did when we had collected carving bark from cottonwood trees. An ad was placed in the classified of a taxidermy magazine. It said “carving bark for sale, minimum order 200 lbs” and an e mail address was given for a response. This limited our offer to carving supply businesses. It greatly reduced packaging problems and 30 day credit was given to established accounts. The ad was successful. The bark was shipped in 50 lb boxes and we used to get defective boxes from a commercial tree planting nursery. At the time good carving bark was retailing for US $10.00 per pound and we were wholesaling it for $4.00 per pound. I think the shipping cost $2.00 per pound. Sometimes if you are selling from one country to another you may benefit from a currency differential. When you are on the right side it is the great happiness. Good luck in your marketing efforts.

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