IG Live:Insider Economics: Working With A Local Reseller

This month we’re digging into the dynamics of working with a local reseller. In the live we covered: making a good vendor match, pricing, display, marketing, and sales in comparison to farmer’s market work or trying to get retail customers to come to our farm.

Some notes from the talk:

Earning the right vendor:

-Do you have something DIFFERENT to offer them? Ideally, you have flowers and they don’t. 

-Do they get nice traffic through the door?

-Who are their customers? Are they YOUR customers?

-Do they understand working with produce? They will understand produce waste and storage?

-Do their values align with yours?

Pricing:

-We sell wholesale. We sell $12 bunches. Every year or two I increase the price with inflation.

-We offer $12 products only. $12 for 8 tulips in the winter. $12 for mixed bouquets in the summer. Same size wrapper. Same price. We apply a “Keep It Simple Stupid” philosophy. Simple for us, simple for billing/invoicing. Simple for the clerks at the store.

-We send them floral buckets with 6 bunches in them.

-The store marks up prices to $17-19. This markup is less than what they are used to. 

-We put in an emphasis on selling quantity, not fewer marked up bunches. We all make more money if the price is kept at a place that is appealing to the customer. If the store gets greedy and goes too high, people buy less and the store re-orders less. 

-The produce manager emails an order to me the day before or I check in the same day and see if they want an order.

-I give them a paper invoice (with carbon copies) upon delivery. They like this system. It works best for them. It also allows them to pay on their schedule, independent of me sending an electronic invoice. 

-They payout by check mailed to me. 

Display:

-Location: Interrupt the customer’s travel through the store. Take advantage of exit points (entrance/exit points if possible). Do not allow the reseller to “sprinkle” your products around the store. Your customers need to be able to learn where your display is and how to find it quickly. 

-Flowers are either a thoughtful purchase or an impulse buy. The “thoughtful” buyers will seek out your product. YOU need to seek impulse sales. Your products need to be top of mind. They need to insert themselves into the path of the customer. 

-Height - display your flowers at a height where your typical customer can see the tops of the flowers. This means they probably should not go on a counter. Can a shorter woman see the flowers? Can a child see them? A child’s sense of wonder can be a motivator for a sale. 

-We bought this set of nesting plant shelves for our store to use. I own the shelves. I bought them to insure proper height for our flower sales. The shelves are condensed when flowers run out/there are few to display.

Marketing

-Choose a reseller that is going to at least try to be a partner with you for marketing. Flowers are perishable and you want to move them fast. A good partner will help you spread the word in a timely manner. They will AT LEAST re-post/share your social media announcements.

-Red flag: the marketing from a prospective reseller is blind to holiday sales. The reseller is not creative / demonstrating they can connect their current products to their customers. A retail shop ALWAYS has something to sell. At the very least you should see them making an effort to sell gift cards for their store.

Sales summary:

For Nori’s Village Market: We deliver 36-48 bunches of flowers on Tuesdays and 42-60 bunches on Fridays, depending on the season. These are regular week (non-holiday orders). 

Weekly total: $936 to $1296 on a regular week at 1 small town grocery store. 

Average: $1,116 per week

(Valentine’s Day and Mother’s Day: $2,400 - $3,000. (average = $2,700))

Total: $55,800 regular week sales + Valentine’s Day & Mother’s Day $5,400 = $61,200 Sales Goal

This is work that could be done by one person and delivered twice a week on your way to other things you need to do, if you’re able to find a vendor in your area. Now, what if you can find 2 or three?

Comparison:

Farmer’s Market sales for us:

Weekly: $400-$800 at one high traffic market. $200-$300 at a low traffic market. (2 market days, one on a Sunday and one on a Wednesday)

Average income per week at 2 farmers markets in our area: $850

Total expected seasonal income if market season is 16 weeks: $13,600. But - in addition to the labor of making flower bunches and traveling to the market we also need to factor in the market fees, insurance costs, labor for packing the market stand up for travel, setting up and taking down at the farmer’s market, standing there all day twice a week, waste of product if unsold. And the market is seasonal.

If I have to choose between earning $13,600 for 4 months or $61,200 for 12 months, plus more time to make other sales, savings on labor and other resources, and zero loss of sellable product — I’m choosing the latter. Maybe it makes sense for you to try and do both. Or maybe farmer’s markets work out better for you.

I also encourage you to think about the kinds of sales you COULD be making or the ways you might be able to impact the growth of your business if you are not at a farmer’s market all day long.

Could you be landing an event client? Could you be finding a different reseller or delivering to one or more other resellers?

If you feel dependent on farmer’s markets or they ARE more profitable for you in your situation than for me, maybe it makes sense to have other people selling the flowers at the market so that you can pursue some different opportunities for your business. I think these are all important things to consider as you determine how you’d like your business to grow and work for you.

Please share your comments, questions, thoughts in the comments below. I know our method is not for everyone. But I hope that you can benefit from learning what works for us here.