Supply to high street - quantities?

[ReverendCounter]

I sell a low cost product which is manufactured for me in the UK. It’s more of a project than a business due to the small quantities in which I buy and sell at, but it’s profitable and consistent year on year since I started selling, which has always been through ebay or amazon. The product can be described as a clothing/fashion accessory and would be new to the high street.

The plan is to offer the product to retail groups to see if they’ll sell it in store. How many should I have manufactured as a minimum, in order that there's a decent amount ready to be delivered, should there be interest? I'd rather prepare the minimum so I don't have a load of stock sitting around if things don't go as planned. Any thoughts please?

[akirk]

ReverendCounter said:

I sell a low cost product which is manufactured for me in the UK. It’s more of a project than a business due to the small quantities in which I buy and sell at, but it’s profitable and consistent year on year since I started selling, which has always been through ebay or amazon. The product can be described as a clothing/fashion accessory and would be new to the high street.

The plan is to offer the product to retail groups to see if they’ll sell it in store. How many should I have manufactured as a minimum, in order that there's a decent amount ready to be delivered, should there be interest? I'd rather prepare the minimum so I don't have a load of stock sitting around if things don't go as planned. Any thoughts please?

what is your manufacturing lead time?
I would expect most retail groups to have quite a long order lead time - you won't pop in and they will say yes, let's have it in the stores tomorrow! So you should be able to get an order from them and then manufacture to order without missing their lead time - is there also a need for POS materials etc. which will need agreeing / producing? Do you need to agree with the retail group where it will be placed in the store - how many items need to be available (e.g. if you provide a stand holding hairbands and capable of holding 300, their ordering 20 is going to always look as though they are out of stock!) I would be very wary of over-ordering to meet a hypothetical short order timeline with no guarantee of any orders... so perhaps maximise the ordered number that you would be prepared to sell through Amazon / ebay if no orders materialise...

[singlecoil]

Is there enough profit in it to allow for the markup the retailers will expect (maybe 50%)?

[Simpo Two]

ReverendCounter said:

I sell a low cost product which is manufactured for me in the UK. It’s more of a project than a business due to the small quantities in which I buy and sell at, but it’s profitable and consistent year on year since I started selling, which has always been through ebay or amazon. The product can be described as a clothing/fashion accessory and would be new to the high street.

The plan is to offer the product to retail groups to see if they’ll sell it in store. How many should I have manufactured as a minimum, in order that there's a decent amount ready to be delivered, should there be interest? I'd rather prepare the minimum so I don't have a load of stock sitting around if things don't go as planned. Any thoughts please?

So, if you have a stockpile of, say, 100,000, and nobody in retail wants to buy any, can you shift them (eventually) through your current channels or will you be left with a garage of embarrassment?

[ReverendCounter]

Thanks, you’ve given me a bit to think about.

akirk said:

what is your manufacturing lead time?

I would say six weeks, perhaps down to a month at a push.

akirk said:

you won't pop in and they will say yes, let's have it in the stores tomorrow! So you should be able to get an order from them and then manufacture to order without missing their lead time

That was the main worry other than having way too many manufactured

akirk said:

is there also a need for POS materials etc. which will need agreeing / producing?

No, the product is suitable for retail hangers or ‘dip in’ bowls, ie it's small

akirk said:

Do you need to agree with the retail group where it will be placed in the store

No

akirk said:

how many items need to be available (e.g. if you provide a stand holding hairbands and capable of holding 300, their ordering 20 is going to always look as though they are out of stock!)

Not sure, I think that would probably come from a conversation with a buyer

akirk said:

I would be very wary of over-ordering to meet a hypothetical short order timeline with no guarantee of any orders…

OK. I was planning something like 25k ready to go ‘just in case’ - I thought it would be great to be able to confidently say that if there was interest at a trade show.

akirk said:

so perhaps maximise the ordered number that you would be prepared to sell through Amazon / ebay if no orders materialise…

I tend to order around 500 units per year on average so would make cashflow a little easier to manage if I don't go ahead with a 25k order which hasn't been placed.

[Saleen836]

Also might want to be prepared for retail groups to want/insist on minimum 90 day credit terms

[ReverendCounter]

SpeedBash said:

I'm assuming your manufacturer has a low minimum order quantity but it may be worth asking him how quickly he can scale up for larger quantities and pricing for larger volumes.

I would imagine the high st retailers you approach will ask you this at some point.

I haven't had that conversation with suppliers yet but any reduction will be welcome, currently some of the manufacturing costs are based on low volumes.

[ReverendCounter]

singlecoil said:

Is there enough profit in it to allow for the markup the retailers will expect (maybe 50%)?

I was working on a retailer wanting to sell at 2.5x the purchase price - if they are happy with 50% markup, so am I!

[ReverendCounter]

Simpo Two said:

So, if you have a stockpile of, say, 100,000, and nobody in retail wants to buy any, can you shift them (eventually) through your current channels or will you be left with a garage of embarrassment?

Exactly what I want to avoid! I haven't even worked out how much space 100k would take up - if I had to pay for storage that would hit turnover.

[ReverendCounter]

Saleen836 said:

Also might want to be prepared for retail groups to want/insist on minimum 90 day credit terms

Completely forgot about that, thanks

[akirk]

so, you sell 500 p/a and were thinking of ordering 25,000 - 50 years worth of stock!
I don't know your industry in detail but I would be surprised if there is less than a month from agreed order to stocking in the shop, and you need to understand the detail of any contract before you go ahead - at what level will they first order, what about re-orders, returns, etc? lots of chains will test in a few stores before going national, so that would give you a chance to ramp up... do you even know that there is that market if you currently only sell 500 p/a through 2 of the biggest market places on the planet?!

get talking first, don't assume until it is signed and sealed...

[The Moose]

Turn the slightly longer lead time into a selling point.

Can you brand it to their brand, customize the product in a different color/pattern/flavor/something else?

Please don’t order 50 years of your stock without a known outlet for them!

[anonymous-user]

Let me put a downer on it for you to consider - if I am wrong, great.

If you have had this product on the go for a few years and are still only selling about 10 a week and there hasn't been a copy launched already, what makes you think a retail group is going to be interested?

Finding an ecommerce company that is better at selling clothing / fashion accessories than you are would, imo, be a better option.

[ReverendCounter]

akirk said:

...and you need to understand the detail of any contract before you go ahead - at what level will they first order

Yes, this is the reason for the main question behind the post, what is the most likely quantity that will be ordered - my thoughts being that if the buyer knows they can get the product on their shelves within a week, it might further enhance the proposal.

akirk said:

what about re-orders, returns, etc? lots of chains will test in a few stores before going national

Well, yes...there are a lot of unknowns which won't be clear until a supplier contract is in front of me.

akirk said:

do you even know that there is that market if you currently only sell 500 p/a through 2 of the biggest market places on the planet?!

I don't advertise the product but if you google the most likely keywords about a particular problem, my product comes up near or at the top of results on the first page. It's an uncommon product which solves a common problem and I think when the product is seen on shelves, that people will realise there's a low cost reliable solution.

In addition, when I tested the product in its first iteration on ebay a few years ago, someone bought within 30mins. That suggests they were searching for a solution to the same problem.

akirk said:

get talking first, don't assume until it is signed and sealed...

Agreed! Thanks for the advice and questions.

[ReverendCounter]

The Moose said:

Turn the slightly longer lead time into a selling point.

Can you brand it to their brand, customize the product in a different color/pattern/flavor/something else?

Please don’t order 50 years of your stock without a known outlet for them!

Yes, but no!

Yes I can definitely rebrand/offer it white label but no I won't be ordering 50yrs worth (still don't know what the magic number is!).

[ReverendCounter]

JPJPJP said:

If you have had this product on the go for a few years and are still only selling about 10 a week and there hasn't been a copy launched already, what makes you think a retail group is going to be interested?

People do search for a solution to their problem and see the product and they are more likely to buy than not buy, as the ebay Performance stats for conversion rate was 75% in July, currently 60% for the past month. I think with more work in gathering and representing stats properly along with showing the results some advertising, that the facts would make a convincing argument - but although its great when an order notification comes in, I'm less interested in selling a few units at a time (people very often buy several in one order), I want to get it on the shelves.

JPJPJP said:

Finding an ecommerce company that is better at selling clothing / fashion accessories than you are would, imo, be a better option.

Hmmm....yes but it feels the time has come to try to (cringe) 'take it to the next level' if you'll excuse the cliché!

[ReverendCounter]

The Moose said:

Turn the slightly longer lead time into a selling point.

Not sure if I follow - did you mean to say 'shorter'?

[akirk]

ReverendCounter said:

JPJPJP said:

If you have had this product on the go for a few years and are still only selling about 10 a week and there hasn't been a copy launched already, what makes you think a retail group is going to be interested?

People do search for a solution to their problem and see the product and they are more likely to buy than not buy, as the ebay Performance stats for conversion rate was 75% in July, currently 60% for the past month. I think with more work in gathering and representing stats properly along with showing the results some advertising, that the facts would make a convincing argument - but although its great when an order notification comes in, I'm less interested in selling a few units at a time (people very often buy several in one order), I want to get it on the shelves.

This was a question I asked as well - and to me it is the biggest concern...
In an era where the high street is in decline, and online shopping is increasing, you already have your product in the two biggest online marketplaces.
So the outlet for your product is already in front of shoppers.
If there is an acknowledged need for it and it is already being searched for, then they will find it in those two outlets - they are heavily google indexed
Having it on the shelves of high street shops is unlikely to make it available to many more people / broaden the market - so the simple reality at present is that sales are in the order of 500 p/a - if the market capacity is so vastly bigger - why are those people not buying already?

i.e. - if you believe the market to be in the 10s of thousands a year - why are you only selling 500 - retail won't give you that proportion more customers...

so the two areas which could lead to change are:
- improve your marketing (and sell more where they are already)
- improve your fulfilment logistics - and I could see retail helping you to do that - but at quite a high cost, and surely Amazon and moving to Fulfilled by Amazon would be a better option?

I just don't see where the evidence is for anticipated sales 50+ x your current sales and that the increase could be driven by stocking the item in the high street - doesn't stack up for me...

[DSLiverpool]

ReverendCounter said:

I sell a low cost product which is manufactured for me in the UK. It’s more of a project than a business due to the small quantities in which I buy and sell at, but it’s profitable and consistent year on year since I started selling, which has always been through ebay or amazon. The product can be described as a clothing/fashion accessory and would be new to the high street.

The plan is to offer the product to retail groups to see if they’ll sell it in store. How many should I have manufactured as a minimum, in order that there's a decent amount ready to be delivered, should there be interest? I'd rather prepare the minimum so I don't have a load of stock sitting around if things don't go as planned. Any thoughts please?

You do a soft launch in say 10 stores to asses the pull and reaction, your chosen retailer will tell you the quantities they will commit to, you then get them made.
You ask your supplier lead time on 500 / 1000 / 5000 and add a week then relay this info to your retail partner.

[technodup]

ReverendCounter said:

The Moose said:

Turn the slightly longer lead time into a selling point.

Not sure if I follow - did you mean to say 'shorter'?

No, he means explain away the delay as an opportunity or them to have it customised.

Change "Sorry, the lead time for the widget is X weeks", to "You can have this widget custom branded and it's available in just x weeks"