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    5 Replies Latest reply on Sep 18, 2008 11:27 PM by HigherProfits

    Need urgent advice in marketing .

    idisol Newbie
      I sell height adjustable coffee tables expandable into dining tables for 10. ( The product is great, everybody who bougt them love them and I even have about 120 back orders. But I did not expect that $ will go down so badly. Usially I bought just one container of these tables and everyting was OK. But now in order to maintain or even reduce retail prices I have to order 5 containers. - 5 times more than I can handle. -It will kill me with warehouse expenses.
      Is it the way out from this situation - to sell about 300 - 400 hundred of them at wholesale prices while they will be in transit, and keep just 100 as usial, or the idea is bad?
        • Re: Need urgent advice in marketing .
          LUCKIEST Guide
          Need advice in marketing, Welcome Vadim,

          Tell me more, The more you share, the better our answers to you. How long have you been in business??
          Do you have an Accountant?? Have you done a Cash Flow or Cash Budget Projection??
          Do sales usually pick up in the last quarter of the year??
          Do you have the funds for 5 containers (not counting warehouse expenses)??.

          How soon do you need to make this decision?? LUCKIEST
            • Re: Need urgent advice in marketing .
              idisol Newbie
              Reply to Luckiest :
              This site is new for me, still trying to figure out how it works. - Tried to reply directly - does not work. OK, I do not run secret operation.
              So, in this business I am just 2 years. Have another one which has nothing comon with this one, which I have been runing since 1996.
              I do not have an accountant, because I was able to do it myself, using my PC. As to cash flow - I can see it clear from my Quick Book.
              Cash Budjet Projection - can tell nothing about it, because in this business it is UNPREDICTABLE when the sale will happen. - And it does not pick up
              in the last quater. - I even wood say it goes down, - Christmas is time for small/cheap (relatively) gifts. - Who wants the X table at this time?
              And I do not have funds for all 5 containers. But the terms are: 30% within 10 days after accepting the samples. The remaining 70% against shipping documents(Bill of Loading). - This will give me about 50-60 days.
              I will have the samples at the end of september. And my plans are: 1) Imediatelly make photos. 2) Flyers 3) emails to all customers who are on wishlist
              4) Video promotion on youtube 5) Video advetising on TV in NY
              But ... too many tables. And even the price will be 1/3 of CALIGARIS (they have some similar but ugly tables at sky high prices- about $1200.00) - this still will be not for Christmas.
              I hope I answered all questions.
            • Re: Need urgent advice in marketing .
              Lighthouse24 Ranger
              Welcome to the community. It sounds like you are being compelled to order 5 containers to get more favorable pricing from your supplier, so you end up with one container you can retail quickly and four you have to hold in storage that eat up your profit. Is that the problem?

              Wholesaling (instead of warehousing) the additional containers is the option you're asking about. The issue might be the cost of reshipping those containers (or the 300-400 units in them that you referred to). If you pay transportation, insurance, etc., to send them from you to a buyer, it could cost you more than warehousing. If the buyer pays for that, it could eat up his/her potential profit (plus, if the buyer could handle that many units, why wouldn't he/she just buy direct from the supplier like you do?). Also, if you're importing those tables, wholesaling a load of them will likely cut into your retail sales.

              One option to consider would be a change in pricing. If "everything was OK" when you were ordering one container, and if you had retail backorders when you were operating that way, it suggests that your margin was satisfactory and that demand exceeded supply. So why not keep ordering one container, only increase the price to cover whatever additional the supplier is charging you for the smaller quantity order? Consumer demand may decrease slightly, but you have backorders now, and your unit margin will increase to offset the decline -- plus it would seemingly improve your inventory control and customer fulfillment, too.

              Another option (if the numbers won't work for a price change) would be to form a partnership with whoever you were thinking you'd sell all those units to wholesale -- and then get together to buy collectively as one entity. You'd each get the advantage of quantity pricing, only pay for shipping once on the portion of the units you were receiving, and only receive the number you could handle in your existing retail space.

              I hope that helps some (or stimulates another idea that does). Good luck.
                • Re: Need urgent advice in marketing .
                  idisol Newbie
                  Thank u for your answer. But the matter is a little bit more complicated. - The problem starts when $ went down about 40% against Euro. At the same time because of energy cost rised, manufacturers increased their prices by 10%. Plus delivery cost increased terrible. - Looks like I started this business in a wrong time.
                  So, the problem is: - even having back orders, I just can not offer these customers 50% icrease in price. - Would it work? - I am doubt.
                  I new where everything is going last year and in October (Last Year !) started looking for a new manufacturer. Spent a lot of time and money, and finally found the REAL one (I hope). - The preliminary sample looks good, and the final 2 new models should be ready by the end of this month.
                  But for this factory the X tables is completely new line of product. They like the concept, the product, but they need moldings, lines, special supplies, packing and other stuff to make it work. And because of wholesale price was the main criteria after the quality, the production of these tables will be profitable at the quantity 500 and more. - I understand their position very good. - Even they love the tables, they do not want to risk too much.
                  As to competition, I will have 1 year exlusive rights for the US market. And even a big company will decide to produce them, it still will be at least 1 year behind.
                  As to a partnership - I live in San Diego, but need it in NY,- my best market. But I do not know anybody there. Any ideas how to find such person in NY?
                • Re: Need urgent advice in marketing .
                  HigherProfits Wayfarer
                  Have you considered creating a distribution channel and then you would potentially be able to handle a MUCH larger volume of them, although earning slightly less on each.

                  That would be the best bet from just briefly reviewing your situation.

                  To Higher Profits,