Starting A Wholesale Chocolate Business
I have a question about starting a wholesale chocolate business.
I sell chocolate candy lollipops, favors, etc., on-line at etsy.com. I have recently been approached to sell to someone who has her own business (not candy) at a wholesale level.
She would like me to sell to her at a rate of 30% discount. She works with a party planner and many other companies at a wholesale level and will offer my company to others at wholesale.
My question is, where will I see a profit if I start selling my goods at wholesale? Is 30% reasonable.
She states that at times, I will not need to worry about the final packaging of my items because they will be included in her items to make a large centerpiece.
I just can't get the concept of where I will eventually be making money, if I sell to her and others alike at wholesale?? Do you have any thoughts?
First of all let me say that I had never heard of etsy.com (shocking, I know), so I had to take a quick run over there to have a look around. Very interesting! It seems a bit like ebay, but for hand made items. Am I right?
Do you sell much via etsy? I'm curious as to how much traffic you get there (since I'm online a lot and have never run across it).
As for your question, I can see your dilemma clearly. It is not unusual for people who are starting a wholesale chocolate business to buy at one price and sell for a much higher price (30% is not unusual).
The problem comes in when you consider selling
at wholesale prices. You need to still have a profit margin, or what's the point?
The only solution or suggestion I would offer you is to take into consideration
your own costs and add a profit margin that you are comfortable with and make THAT price your "wholesale price" for this woman and her group of wholesalers.
It isn't necessary that you give them 30% off of the price you sell on etsy or elsewhere. You can just say that you are already selling at wholesale prices. ;-)
For instance, if I were to come into an agreement with you (interested?), I would ask you what is your lowest price you are comfortable selling your handmade chocolates for, and then I would add on whatever amount I wanted to make above that and list them here on my site.
When I made sales, I'd then send you the order and you'd fill the order at the agreed upon price. Make sense? That's sometimes referred to as dropshipping. I get the order and you fill it.
That's the type of thing you could work out with this woman. If she is selling via her "party planning" she can add whatever percentage she wants to the cost when discussing the quote to her clients. If she needs a receipt for the client from you invoicing the full amount, you can provide that and then pay her the difference on a commission basis.
The easiest way, though, is for you to sell at what price is comfortable for you and let her worry about her mark-up.
There's absolutely no reason in my mind why you can't make a profit and she can too. Handmade chocolates for special events aren't inexpensive, so the market will probably be higher than what you are currently selling them for on etsy.
Does that help at all? I hope so. If I've misunderstood your question in some way, let me know. Keep me posted on how it all turns out!