Placing Products In Retail Store?

Business By pj22 Updated 6 Oct 2011 , 1:57am by pj22

pj22 Posted 3 Oct 2011 , 9:53pm
post #1 of 8

Hi All!!

I am considering placing my cupcakes and cupcake bouquets in retail stores but don't know where to start. There is no one here who does that type of stuff but how do I approach stores and what kind of terms and conditions do I work out?

I am licensed and inspected with a tax ID and liability insurance. What kind of pricing and approach should I take? Anyone who did this before??

Thanks for reading and for the advice!!

7 replies
DuxDay Posted 3 Oct 2011 , 10:18pm
post #2 of 8

hey pj22,
i dont have the answer for you on approach and pricing, but i just wanted to make sure that you are aware of the laws in your specific state. here in MA, a home bakers permit/license does not allow us to sell to retail.. only directly to the consumer. it is a different level of license and permitting and inspection processes to be able to sell to retail establishments. is it different in VA?
If you are allowed to do this, i would suggest approaching the store manager or owner of the establishments you have in mind. hth

jason_kraft Posted 3 Oct 2011 , 10:43pm
post #3 of 8

Before you talk to any retailers you should work out your cost structure and have a minimum wholesale price in mind which will leave you with enough profit. You'll also need a good idea of how high a retail price the market will bear in your area, and if a retailer wants to price your products above that point you probably won't sell much.

If you can talk to the buyers for the retailers in question beforehand and find out their markup, you can create a portfolio of different SKUs for each retailer with the wholesale price set to produce a retail price you're comfortable with. For each SKU you will want to include details like packaging, shelf life, and recommended storage.

ReneeFLL Posted 3 Oct 2011 , 11:31pm
post #4 of 8

The previous suggestions are good and after you take care of those, I would try to find some higher end boutiques and talk to them.

MimiFix Posted 3 Oct 2011 , 11:34pm
post #5 of 8

Hi pj, selling wholesale can definitely be worthwhile. In the baking industry, the suggested pricing strategy is to find the cost of your product then multiply 3x for wholesale and 4x for retail. There are variables, of course, but this is the basic idea. Once you know what price you'll ask, do your market research and find stores to approach. Take them samples and a flyer that lists your products, prices, and any brief info they should know about your business (i.e. all scratch, gluten-free, made with love icon_wink.gif etc).

I strongly suggest you only accept COD and do not take returns.

Good luck!

pj22 Posted 4 Oct 2011 , 8:39am
post #6 of 8

Thanks so much for the suggestions!! So do you think I should have a wholesale price of, say, $1.60 per cupcake and a retail price of $2.25? (which is my current retail price) How can I ensure that the retailer does not price over $2.25?

Is there a contract that I could sign?

What kind of high end boutiques should I keep in mind?

Thank you for all your help!!

jason_kraft Posted 4 Oct 2011 , 9:48am
post #7 of 8
Quote:
Originally Posted by pj22

Thanks so much for the suggestions!! So do you think I should have a wholesale price of, say, $1.60 per cupcake and a retail price of $2.25? (which is my current retail price)



It depends on your cost structure. If you are comfortable with your hourly wage and profit margin at $1.60/cupcake (keeping in mind that wholesale manufacturing is typically more efficient due to larger volume) then that would work for you.

Quote:
Quote:

How can I ensure that the retailer does not price over $2.25?



You probably want the retailer to price higher than your current retail price, otherwise you risk the retailer cannibalizing your sales and reducing your profits.

Quote:
Quote:

Is there a contract that I could sign?



Absolutely. The contract should cover all aspects of the transaction, including your wholesale price, retail price, delivery terms, payment terms, buyback terms, etc.

pj22 Posted 6 Oct 2011 , 1:57am
post #8 of 8

Thanks so much for clearing that up for me... I appreciate it Jason!

Quote by @%username% on %date%

%body%