Marketing my product wholesale. Questions.

I have an idea for a product and am taking the risk to have a die made and an initial run of 1000. (injection molding)

I want to wholesale these only.

The fewer I sell at a time the more hassle and $ it will be though.

Any thoughts on minimum order amount? A sliding scale on quantity?

Product will be $19.95 and will sell to small tool and supply houses on up to say, an Enco sized supply company. I guess that would be lucky.

Point being it's not a consumer wal-mart product and I don't expect to sell millions...100-1000 a month might be exciting enough for me though.

Any advice regarding contacting buyers, war stories, what not to do, how these things are normally dealt with, initial order quantity, reordering, etc...

Will be appreciated and probably interesting to others too.

Thanks,

James

Getting a good idea is the easy part. What kind of research have you done so that you know it will sell?

If you gave us an idea as to what it can do then there is a chance you can see the responses and reactions.

A good injection mold isn't cheap.

My son in law just went to a trade show (in Louisville) and signed on a few buyers for a new product. That may be the ticket for getting your product on the market ASAP.

I'm not quite clear which is the pain point; is it manufacturing in small quantities or selling in small quantities? It's hard for me to think of making a run of 100-1000 parts and having a tough time selling them onesey-twosey (that's what shipping & handling are for but you should still be able to streamline this). For the volume you're hoping to reach, hiring a grunt to fill orders shouldn't be an issue.

The other option is to find a fulfillment company; they basically hold your stock and fill orders for a per-order fee. This gets the 100-1000 parts of inventory and all the shipping infrastructure out of your plant and into their warehouse.

3rd option is to go to industrial supply houses or better yet, a distributor who supplies them. You simply sell to them. Your main issues there is hoping that your product is "complimentary" to their product line. If it's competitive you may have difficulties and the other two options may work out better. Distributors (and retailers) like to sell "lines"; coming in as a one-trick pony can be tough.

That's my somewhat-limited knowledge in this area; hopefully someone can expand on these a bit more.

Good luck, I hope it flies!
The Dude

First, you need to give your customers appropriate markup. I went to a trade show and was amazed at what some individuals expected their potential customers to work on.
[edit] ISTR a guy retailing for 1200 and trying to wholesale for 1100, no one is stocking that item]

When I was a kid, working after school and weekends at Kmart, the ordering books had a 'net' number between 40 and 60 , meaning the cost was 40-60 percent of the retail

As a manufacturer it is galling to 'give' all that money to a guy that does nothing but stock a few parts[if that] but here's the deal:

No one is dialing your phone number.

People call Enco and whoever all day long and whenever they place an order then the shipping for your item becomes 'free'

Be loyal to your customers and they will be loyal to you. I have many times received a retail phone call/email and my first question is 'where are you located' then 'OK, call this guy, he is one day UPS from you'. Those dealers of my product do not forget that

I do in fact offer to sell retail, but at a price and terms that are unattractive; 10 percent higher than average retail and send me a check etc, no credit card......

I sell an item that is around 200 max retail, and my best highest volume customers are just below 100 percent markup. Smaller outfits can drift under 60 percent.

I would say cheaper products need more markup[who would bother selling a product that makes them 10 bucks a month?] while more expensive products it will frequently go down. I do sell some odd items in the 5 dollar range, and I think they retail around 20, but the reorder cycle is long[IOW I make the customer buy 50 or 100 and they reorder in a year or two].

If you have no competition, your margin can be higher. If you own the means of production your margin can be higher. I you sell in bulk and expect your customer to do packaging your margin will be lower.

Tool and Supply houses seem to sell a lot of stuff that is drop shipped from the mfg., so having a system where you physically ship the stuff direct to the end customer might be key.

More and more technical things are for sale on amazon, some by amazon themselves (just about the entire mitutoyo catalog) others via vendors.

Thanks for all the replies, they help, and I'll try to answer some of the questions.

What it is isn't important right now. I did do some testing and it satisfied me enough to go for it...

I could sell them retail but I don't want to. I don't want to box them up individually and ship. This precludes drop shipping too.

My preference is to sell them wholesale to someone who can ship them 'free' with the rest of your order.

I do think these will be a very complimentary product for several different venues.

I do understand about leaving room for the retailer...I'm going to wholesale for $10 and they are going to sell for $20 (+/-, I understand).

I have a list started of companies that may be interested, but a place like https://www.lehighvalleyabrasives.com/ where I buy my flap wheels would be the type of small company with web sales that might be a good fit.

I guess my ideal is to sell a box of 50-100 to these type places and when ordered they throw one in the box with other items and out they go.

What I'm interested in hearing about is how some of you got (or didn't get) low volume products into the sales stream.

Initially I knew the retailers and knew the market.

The product I was competing with I undercut by almost 100 bucks a unit. While some might say I left money on the table I feel I understood the market and would sell a much higher volume at a more attractive price point. It worked and I now am still able to undersell all my legitimate competition because my supply chain is tight and I make a wider variety than most of my competitors.

Buck up and start dialing for dollars. Cold calling was my most effective strategy. I have customers from one round of cold calls 15 years ago that are still good customers.
Knowing who to call is the hard part. Large companies are hard to navigate. Start with the small supply houses where you can actually get through to a decision maker

I started pre internet, and you may want to do things differently. Setting up an amazon or ebay presence selling at full retail to gauge the market may not be a bad idea. Nothing sells better than potential retail customers calling your potential wholesale customers looking for your product.

If this is an innovative product and likely to eventually attract imitators, you also want to trademark the "perfect" name for your product. The process is cheaper than building a mold and often worthwhile.

Eventually you want customers asking for it by name, dealers wanting to stock it, and imitators getting threatened for trying to use your name.

I know that a lot of people marketing products are selling through Amazon these days. Set up a couple product pages in their system with photos and descriptions, and they'll do the rest.

One customer of mine I know is doing this after having sold direct off of his website.

I have a good friend that developed several innovative and time saving items for electricians and sold them himself for years, on purpose. His intent was to prove the market so that he could sell the patents and traemarks to a larger tool company, which he did. He no longer works.

Another early marketing trick (apart from cold calls) is to set up a small booth at whatever trade show is most relevant to the product and have at least two folks to man the booth. Ideally, you'll have a crowded booth, sell a bunch, visit all the major distributors, have them see your product surrounded by customers, etc.

Depending on your product and market, could be an efficient use of your time.

So I've identified several potential businesses that may sell these.

How do I word the sales pitch?

Should it be "Here's my product, minimum order is 200, price is X?"

Should it be emails/calls until I find the right person in each company?

Should I send a sample?

I guess I'm needing nuts and bolts.

Thanks for the replies thus far, much appreciated.

I used to do wholesale, and disliked doing retail for some of the same reasons.
It sounds easy to just pack and ship- but its a big pain. You need to be on it- retail customers these days are used to same day shipping, and two day free delivery, spoiled by Amazon.

I had my best success with trade shows.
In pretty much any market category, there are usually at least two national shows a year.
It aint cheap to get a booth, and you have to fly there, pay for food and lodging, and so on- Even a cheap trade show would end up costing me a minimum of 3 grand or so- and, if you had to do one in Jacob Javits, in NYC, add ten g's to that number.

But- at a trade show, the people who actually make the decisions are there for one reason- to buy. They sure arent there for the five dollar cokes and ten dollar hot dogs, or the decor.

You cold call a store, and, nine times out of ten, you get a minimum wage clerk who has zero decision making ability.
You happen to get the boss, and he is busy, thinking about other stuff, and usually will blow you off.

You want to catch the buyers when they are buying. Thats what trade shows are good for.

Minimum order depends on the industry, and the price point of your product, but as a newbie, I would set it high enough to cover your packaging, but not too high- maybe 200 or 300 dollars.
And, there are no two ways about it- you are going to HAVE to accept net 30 terms.
Nobody is going to buy an unknown product from a new company for cash up front, or COD.
You are going to have to risk giving credit.
The bigger the store, the worse the terms. Some of the big boys pay net 90, sometimes even more.

The standard method is that you identify likely customers, send them a personal mailing containing all the details, then call them a week later and ask what they thought of the product and whether it was something they could use. Try offering it for free to initial customers.

If this something that needs to be distributed, then do step 1 (above) first to prove that it works and is useful. Then step 2 is to talk to a "rep". There are guys who "rep" products into supply chains. Basically they are brokers. Find one that handles your type of good.

I never had luck sending mail first. I called and talked to someone so i could put their name on it. I also emailed them after contacting them and getting permission to send them email. Never send a spam email or you will get black listed and your email will stop working, a friend had that happen.

I also had success with trade shows. I would hire a Kelly Girl to help in the booth to take the leads and pass out brochures. Or to just talk to them if I was busy with someone else. I also sold wholesale and the bigger companies wanted 40% and the smaller guys wanted 25%.

It sounds easy until you have to lay out the cash for making and having an inventory, liability insurance, book keeping, overhead, etc.. a real pain in the butt to make a buck. Need a patent ? Then get ready for more out of pocket $$... Rich

All I can say is, if you're going to sell a product for ten bucks and make a living, it had better cost you about a nickel to make. And it should be habit forming.

50% of the retail price should get most retailers onboard, if the product actually sells at your price point.

Far and away the easiest way to prove out the market is Amazon.com. Set up an amazon shop, or have your brother/friend/wife/dog set one up. Use a generic sounding name that isn't your new company name. Look up Amazon's rules for retail packaging (bar codes, UPCs, size imits, etc) and comply with those. Then ship them a box of 200 of them.

They charge about 20% depending on category, plus a fee for shipping. All in all it'll cost about $8-10 per sale, and they do 100% of the work. You handle support and deal with the occasional return. You set the pricing. Never, ever discount here. This is important later.

Now you have a company making the product and also a retailer (who may or may not be you) selling that product on the largest and easiest e-commerce platform on earth. The reason you use amazon and not Ebay is Amazon won't raise eyebrows with other vendors. Ebay means cheap grey market crap, and the price wil drop as soon as another vendor takes any inventory.

Sell your product on Amazon for a while and collect responses. If the product is good, then you'll legitimately pick up some customer reviews. Don't write your own and for God's sake don't pay one of those astroturfing companies to write fake reviews for you.

Once your product is solid, you've used Amazon to prove our your price point and that the product is saleable and you have some good public feedback, then you can approach other retailers.

Oldwrench said:

All I can say is, if you're going to sell a product for ten bucks and make a living, it had better cost you about a nickel to make. And it should be habit forming.

Click to expand...

I don't need to make a living with it. I have a business and sell the products I make...just thought this was a good idea and can afford risk it...

I do agree that it's generally not worth my time to sell anything under several hundred dollars, thus the questions on wholesaling. Also, this whole process so far has been interesting, so I'm expanding my horizons a bit.

Thought I'd update my experience:

I took the advice from several on this forum.

1. Per PeteM I came up with the "perfect" name...Ha. Maybe not perfect but I liked it and I think it works.

2. Several people here mentioned Amazon and I went with them for fulfillment.

I did have one company I sold wholesale to as well.

___________

What happened was another company bought the mold, name and remainder of stock from me. They are selling it now.

Product here:

Hel-Hook Welding Bottle Helmet Hanger - - Amazon.com


Proof of concept product, which got 'picked up' by pinterest ironically and sold well:


Hel-Hook Welding Bottle Hook Kit – RLCWELDFAB