Distributor Opportunity - Question about Pricing to Retailer

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jfaudet
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12 Jun 15 11:40:10 pm
To members that have experience in dealing with retailers as distributors

Like it is mentioned in the title, I have an opportunity to become a distributor for a product in my area. In the last days I become more familiar with anything that surrounds this kind of work but I have still lot to learn and maybe you can help me on something.

Today I was asking myself: Ok, I have a pricing strategy but how much to ask as "down payment" when a retailer is interested? I mean what is the amount I should ask for BEFORE placing an order with my manufacturer? Full amount? 50% before shipping and 50% after delivery ?

I don't want to put myself in great financial risks on the deals. I don't want my retailers to say something like "Well you know what we changed our mind and don't want your products anymore" when they receive their shipment. I would be stuck with the products and fund the deal with my own money. No good for me!

By the way, this is for small regional retailers, not the Walmart or Costco giants that has a hard time paying their suppliers on time.

What is your experience regarding this and what would you do?

Thanks!

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fudjj
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Joined: 27 Jul 07
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13 Jun 15 01:26:24 am
I worked in B2B sales for many years and I've never heard of any retailer fronting any cash for an order I have to say. Usual business practice is to buy on account, you would struggle to find a retailer who will even pay COD.

To get a new customer, you really have to be the one to make the deal as sweet as possible for the retailer or they will usually just wait for the next deal, and trust me, always someone trying to sell them something walking through the door right behind you.


Mark (fudjj)

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Full Member
jfaudet
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13 Jun 15 07:30:57 pm
Thank you for your fast answer,

not quite what I expected though. I am disapointed about the way retailers do business with distributors. Therefore, if rretailers doesn't pay upfront or doesnt even do COD, distributors dont have any guarantees that they will get their money back + profit margin.

Doing business nowadays seems hard no matter how you do it.

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fudjj
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13 Jun 15 08:16:22 pm
B2B is probably the hardest from of selling to be honest, I would rank it right up there with door to door and I've had plenty of experience doing both. Unless you've got a product that a retailer knows will sell like a hot cake, it's a hard push to get anywhere and then when you do get there, that 30 day account they insist on can stretch to 90 days in a lot of cases, even beyond.

There aren't many business's that will give you a guarantee unfortunately, business by its nature is a gamble. The art of it is to eliminate as much risk as possible really, but near impossible to eliminate all of the risks involved.

Is it a product that you could market direct to the public, that would present you with a much better opportunity of getting a percentage down up front.


Mark (fudjj)

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Full Member
jfaudet
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Joined: 02 Nov 06
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13 Jun 15 10:07:44 pm
Yes indeed.

I,ve been doing internet marketing for about 6-7 years and I was lucky enough to meet someone who sells designer and brands items to distributors. I've seen a good opportunity there to do B2B but it seems complex and hard.

Because they are brands, I know that the public are likely to buy. They are popular items but ecommerce is high in competition and because of this price are much lower than retails making it difficult to get a good margin.

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fudjj
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14 Jun 15 12:02:23 am
OK, here's an idea from left field, but would the products lend themselves to party plan sales perhaps?

Party plans are have been growing in popularity again over the past 10-15 years, so that might be an avenue to consider?


Mark (fudjj)

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Full Member
jfaudet
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14 Jun 15 12:34:16 am
I knew party plan was popular for MLM products but not so for an independant distributor for 1 kind of product. Could investigate more about this avenue.

Thank you for your help.

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fudjj
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14 Jun 15 12:47:06 am
Yeah, might be an interesting avenue to explore, see if you could make that work as a party plan model. Let us know how you go.


Mark (fudjj)

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