Does Anyone Have Experience With Wholesale Sales?
Baking By kissmycookie Updated 4 Mar 2007 , 5:08pm by kissmycookie
I have a speciality grocer who would like to establish a wholesale account with us, has anyone here done this and how did you adapt your pricing, and also were you pleased with this type of business?
Sorta Kinda.
A commercial customer of mine with a standing order of 100+ dozen a week. They dont' resell them, like a grocer would, but maybe the circumstances are applicable.
Because of the high volume, the CONSISTENT high volume, I was able to buy supplies in higher volume and lower pricing (50 lb bags of flour from Sysco at less than a penny a cup as compared to a 5 lb bag of flour at Walmart for about 20 cents a cup). This enabled me to give them a volume discount....passing my cost savings on to them. With higher volume baking, it made my baking more efficient. I wasn't firing up my oven for a couple of dozen ..... I could bake 20 dozen a day more efficiently than 24 here and 36 there.
I had no problem giving them a lower price due to volume and justifying it to other customers who requested a "volume" discount by asking them "How close to 100 dozen did you want to order?"
I think the key to remember is volume. A lower price is issued to your customer when your customer is ordering the kind of volume that enables you to save in your production costs. No one gets a "volume" discount just because they order a lot. They get a volume discount because their volume order results in a cost savings to you.
I used to work in a power cord mfg company and one of my customer was a big name computer company. They would order 100,000 power cords a week from me. Every once in awhile, they'd up their order to 105,000 or 115,000 and the purchasing guy would always ask me what kind of discount he gets for ordering more cords. 5 or 15 thousand didn't save me any production costs or save me in buying raw materials, but I'd be sure to point out that if he upped it to 200,000 I could make him a heck of a deal! 
The same principle applies here.
thank you so much for your advice, this makes sense and we have the chance to replace their existing supplier for the entire region so I am hopeful this could be a huge boost for us. We shall see, but you've helped my mindset with this and it's not a bonus if you surrender all of your profit for the account !
thanks indydebi...so is there some kinda formula as to how much of a discount you would give...maybe a percent or dollar amount in accordance with how much they order
thanks indydebi...so is there some kinda formula as to how much of a discount you would give...maybe a percent or dollar amount in accordance with how much they order
I'm sure there is somewhere! 
I pretty much made a "volume discount" schedule based on what this customer ordered. For 100 dozen, you pay price A. For 75 dozen, price B. For 50 dozen, price C.
A regional supplier! Wow! That is an awesome opportunity for you! If/when you go to the bank for some SBA monies, it will look great in your portfolio to show them your 'contract' with this client that is worth $XX,XXX.00 a year in sales!
Indy thanks, that is why we're submitting a bid on that contract in fact I discovered in our last discussion the grocer may be willing to lease us part of their large and expensively furnished commercial kitchen locally?
I expect I'll be running to the SBA soon , we hope? Thanks !
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