# Branching out to wholesale - looking for advice



## jibbster (Jan 14, 2007)

Hello all! I currently have a retail dessert shop and we do a variety of things (cheescake, mini bundts, brownies, bread pudding, chocolate truffles,etc.) 

I just got reclassified with the health dept to be a wholesaler/processor and I have some appointments set up with some local restaurants, coffee shops, etc.

My question is do those of you who do similar things actually enter into a contract with the customers , or do you just let them order x dozen a week, etc. as needed?

Any other suggestions, advice, road bumps you encountered, etc. would be greatly appreciated!


----------



## jcakes (Feb 18, 2007)

Decide on your menu - what do you want to offer (consider shelf life) and minimum quantity (of each item, of each order), establish terms; on delivery, net 15, net 30; days of delivery, lead time for orders. Decide if you care if they are selling your product(s) as their own "house-made" or if they will advertise it comes from you (which is a dual edged sword - what's to stop those customers from going to your shop to buy the same item - they should be priced the same so you aren't sabotaging their business or yours). Some of my accounts only buy from us during holidays (Easter, Mother's Day, Thanksgiving, Christmas) and others buy from us weekly.

Choose who you want to do business with from the perspective of how much business *they* do; and go from there.


----------



## foodpump (Oct 10, 2005)

Contracts usually mean....
A) You are locked into a certain price for a certain period of time.

B) You are locked in to “eating” product that nears its expiry date, may have to “eat” theft and damaged goods.

Both scenarios are lousy, which is why I avoid them.

That said, for wholesale of any packaged goods you will need bar codes and nutritional labels.


----------



## fatcook (Apr 25, 2017)

foodpump said:


> That said, for wholesale of any packaged goods you will need bar codes and nutritional labels.


Not necessarily. In the US if your sales are below a certain amount per year, you can get a waiver for the nutritional label, and whether you need bar codes depends on the customer.


----------



## foodpump (Oct 10, 2005)

Ummm...right.... If the customer is a restaurant or bar, you don't need a bar code. These customers ( bars, restaurants, cafes) are best put on a c.o.d.basis, as there will be no regular ordering and always last minute orders. Basically, these are customers you really can't count on, and relationships last a few months at best. At least that's been my experience .

If you want to do any kind of packaged goods for the retail markets, no retailer- including the mom&pop
ethnic retailer, wants items without barcodes. You might get away with frozen who.e cakes and thaw and bake pastries, but the preferred market is packaged sku's . Its almost 2010 and virtually every store functions on barcodes, heck most inventory systems rely on barcodes, individual pricing is only for produce, and even then, 50% or more of the produce is prepackagedwith barcodes. But it's the retailers that you want the relationships with, they order in advance, have automated paying systems for vendors ( unlike cafes...) and usually follow a steady ordering pattern. This is assuming your product sells, of course.

Another option to consider is the fundraising market: You approach schools/churches/sports teams with a catalogue of sorts, a case of 4 frozen pies costs / ethnic pastries /cookies is x$, and the suggested selling price is y$ per case, get your orders in by -- in time for your fundraising blitz. You can bypass barcodes and nutrition labels and push hard on the "locally made" bragging rights. It's not a bad way to go, albeit very cyclical, and fundraising committees are almost always embarrassingly ignorant on how small, local businesses operate/survive. D.a.m.h.i.k.t. .........


----------



## chefpeon (Jun 14, 2006)

foodpump said:


> Ummm...right.... If the customer is a restaurant or bar, you don't need a bar code. These customers ( bars, restaurants, cafes) are best put on a c.o.d.basis, as there will be no regular ordering and always last minute orders. Basically, these are customers you really can't count on, and relationships last a few months at best. At least that's been my experience .


I worked a long time in a retail shop that had wholesale going out the back. Our customers were restaurants and coffee stands. We learned early on that relying on those customers to order reliably and with enough lead time was foolish, so our policy was that we called them once a week on a Monday to get their orders. We were aggressive about getting all orders in by Tuesday afternoon. It was a win-win for everybody.


----------



## fatcook (Apr 25, 2017)

foodpump said:


> If you want to do any kind of packaged goods for the retail markets, no retailer- including the mom&pop ethnic retailer, wants items without barcodes.


This may be correct where you are, but here it is not. It really will be location dependent. We supply packaged goods for several stores without barcodes (with weekly orders, our product sells well). We have researched and discussed adding barcodes in the future so we can be prepared, but so far none of our customers have requested them.


----------



## fatcook (Apr 25, 2017)

jibbster said:


> Hello all! I currently have a retail dessert shop and we do a variety of things (cheescake, mini bundts, brownies, bread pudding, chocolate truffles,etc.)
> 
> I just got reclassified with the health dept to be a wholesaler/processor and I have some appointments set up with some local restaurants, coffee shops, etc.
> 
> ...


Sorry for getting distracted and not answering your actual question!

It is always good to research what may be required, but the best way to find out is to get out there and find out what the customers in your area want. Ask questions during your meeting - but also set limits right from the start. We've found our WS customers like clear communication and we appreciate it from them as well. You may feel like setting up clear "rules" are going to scare potential orders away, but orders with headaches are sometimes not worth it. It is better to be upfront so everyone knows what to expect from the beginning.

We set out in writing for every WS customer:
* Here is a price list with the minimum order per item. They are not SYSCO prices it is not SYSCO food. These are the prices that allow us to remain in business and make quality products. If they are not prices that work with your business - no hard feelings, thanks for asking. I hate when suppliers will not just give me a price, I am not going to do that to other businesses.
* This size of an order gets you free delivery, this size gets a paid delivery, this size you can pick up. Time (and gas!) is money.
* Payment is on delivery (or pick up) - always.
* These are the days we deliver and These are the days orders MUST be in by for those delivery days. We have had to say NO a couple of times for a couple of customers (and that is scary for a small business), but they get their orders in on time now - people will treat you the way you train them to.

We are flexible on other things, but those are set in stone.

It may sound demanding from our end, but it results in less drama for both us and the customer, which they appreciate. They also know that once we commit to something, we are going to come through - no excuses. There have been all-nighters to get promised products out when unforeseen roadblocks pop up, a problem on our end is not the customer's problem.

We have also created custom recipes for two businesses and they are the only ones we make that item for - no matter how much other customers want them - in a small city like ours, reputation and whether you keep your word is everything.

Good luck!


----------



## fatcook (Apr 25, 2017)

chefpeon said:


> our policy was that we called them once a week on a Monday to get their orders. We were aggressive about getting all orders in by Tuesday afternoon. It was a win-win for everybody.


Our egg guy does this and we love him for it, sometimes we get distracted! We do send out email reminders as well to our more regular orders - in case they just forgot that week.


----------



## jibbster (Jan 14, 2007)

fatcook said:


> Sorry for getting distracted and not answering your actual question!
> 
> It is always good to research what may be required, but the best way to find out is to get out there and find out what the customers in your area want. Ask questions during your meeting - but also set limits right from the start. We've found our WS customers like clear communication and we appreciate it from them as well. You may feel like setting up clear "rules" are going to scare potential orders away, but orders with headaches are sometimes not worth it. It is better to be upfront so everyone knows what to expect from the beginning.
> 
> ...


thanks! this is very helpful! thanks for including the custom recipe part, as that's already part of the discussion. We are also in a smaller area (150,000 in the county) and I am counting on that to help expand our reputation as long as we execute well.


----------



## jibbster (Jan 14, 2007)

foodpump said:


> Ummm...right.... If the customer is a restaurant or bar, you don't need a bar code. These customers ( bars, restaurants, cafes) are best put on a c.o.d.basis, as there will be no regular ordering and always last minute orders. Basically, these are customers you really can't count on, and relationships last a few months at best. At least that's been my experience .
> 
> If you want to do any kind of packaged goods for the retail markets, no retailer- including the mom&pop
> ethnic retailer, wants items without barcodes. You might get away with frozen who.e cakes and thaw and bake pastries, but the preferred market is packaged sku's . Its almost 2010 and virtually every store functions on barcodes, heck most inventory systems rely on barcodes, individual pricing is only for produce, and even then, 50% or more of the produce is prepackagedwith barcodes. But it's the retailers that you want the relationships with, they order in advance, have automated paying systems for vendors ( unlike cafes...) and usually follow a steady ordering pattern. This is assuming your product sells, of course.
> ...


thanks for the guidance !


----------



## jibbster (Jan 14, 2007)

fatcook said:


> Sorry for getting distracted and not answering your actual question!
> 
> It is always good to research what may be required, but the best way to find out is to get out there and find out what the customers in your area want. Ask questions during your meeting - but also set limits right from the start. We've found our WS customers like clear communication and we appreciate it from them as well. You may feel like setting up clear "rules" are going to scare potential orders away, but orders with headaches are sometimes not worth it. It is better to be upfront so everyone knows what to expect from the beginning.
> 
> ...


thanks! Great info! We have some appointments set up this week and I'll update everyone soon how they go!


----------



## retiredbaker (Dec 29, 2019)

jibbster said:


> Hello all! I currently have a retail dessert shop and we do a variety of things (cheescake, mini bundts, brownies, bread pudding, chocolate truffles,etc.)
> 
> I just got reclassified with the health dept to be a wholesaler/processor and I have some appointments set up with some local restaurants, coffee shops, etc.
> 
> ...


I did it on the quiet for 30 years.
One product to many customers.
If you try many products to a few customers you will not reach critical mass to overcome the discounted price. You will lose. At low wholesale prices you have to produce and move higher volumes than retail, and variety is the enemy of volume.

if you ask them what they want, you will lose because they will beat you to death with variety.
also they will often ask for an exclusive, forget it.

My idea of a salescall is pack 10 boxes of sample that I want to sell, its got nothing to do with what they want, it has to be what I know I can mass produce and what I know they can sell.

Pick a few locations and drop off the samples with the owner or manager with a price sheet.
No extended conversations concerning what I can make, if its not on the list I don't wholesale it and because I'm visiting a bunch of other businesses no-one can get an advantage over me or manipulate me into wholesaling something I don't want to discount.

If you have any big car dealerships nearby , those were very good for us, the service dept and showroom have snacks, we supplied croissant and mini muffins and 3 airpots of coffee.
They provide all their own cups, sugars and creamers, it was very good....better than straight wholesale, more like catering prices.

Getting paid, weekly statement must be paid or deliveries stop.
Big corp clients , such as hotels, they can be bad news. They will want 60 to 90 days, if they take $50 a day, its not much but 90 days is $4500 and you will not get a check for 4500,
fat chance... it will be more like $300-400. Thats no good, you've given them a free $4K loan .
small coffee shops are a lot safer.

do you want a day off? they often want delivery 7 days a week.
Think it through, know the answer to anticipated questions, put it on your price/info sheet.

...and of course, cash customers get vip treatment.
Good luck with it.


----------



## retiredbaker (Dec 29, 2019)

fatcook said:


> Not necessarily. In the US if your sales are below a certain amount per year, you can get a waiver for the nutritional label, and whether you need bar codes depends on the customer.


Items the retail customer can pick up from self serve display have to be coded etc.
If the wholesale customer serves it to the retail customer, in a bag or on a plate, there is no coding requirement. 
Even then, you can get around coding with a small self serve retail counter top showcase with doors.
As long as its not on an open shelf.
Many gas station food stores have those donut cases with tongues and paper bags, no coding required.


----------



## foodpump (Oct 10, 2005)




----------



## foodpump (Oct 10, 2005)

I guess this explains why Im so fixated on bar codes. My stuff, 22 varieties, most of them with a 4 math shelf life. No retailer even wants to know your name if you don’t have a barcode....


----------

