mark-up from import to retail

FAIRLANE

I plan to import toiletries from far east & hope to sell to retail chains. I have the impression that the average mark-up after all cost on my part is considered, should be 30-35%. Does this sound reasonable or am I way off?

Swampy

forget about mark-up, you should be looking for a profit margin of 30 - 35% at the very minimum but impossible to say with out seeing your figures.

Do your math and work out what your overheads are and what price you need to sell for to cover your wages, overheads and leave you a profit. Vehicles are very expensive to run, not to mention storage.

Clytus

Iv never found it that straight forward. In fact I do in reverse...you need to know what price the market will accept..and control your material costs and overheads accordingly.And if you have a few lines on the market dont expect to maintain margins at the same rate on all.

If your told what price the retailer is willing to pay...youll be amazed how quickly you will see areas to trim some fat...Best of luck OP!!!!!!!

delllat

be careful you secure a contract before making a large order
a lot of retailers will not accept goods that havent been sourced either locally or from autherised supply distributers and they will require proof(as in purchase reciepts,maufacturer or distributers telephone number to validate your goods came from official supply chain etc
most will not take a chance and put goods on their shelves until they can trace right back where said goods originated and serial numbers are valid etc

you dont want to be stuck with a lifetimes supply of toiletries!

DubTony

As a retailer I'd say these goods need to be either dirt cheap or grey market imports. Supermarket gross margin on toiletries is in the region of 20% to 25% unless there's a BOGOF or other special offer where the margin is reduced. Having said that, during the last couple of years margins have been squeezed quite a bit, as retail prices haven't increased.

Branded goods are still where it's at with toiletries, I assume you're talking about deodorants, shampoos etc. In my opinion the cheaper end of the market has never really taken off (I don't know about Aldi and Lidl). But there are very few, if any, own brand products in this sector.

Selling to retailers isn't as simple as it used to be. Outside of the multiples and discounters, the symbol groups have the market wrapped up. Many Centra, Spar etc. retailers are tied into buying agreements and rarely buy outside.

Buyers for the main symbol groups, Musgrave (Centra / SuperValu) and BWG (Spar / EuroSpar / Mace) must go through a "screw the supplier to the wall" course when they get the job. I have it on good authority that Musgrave charge an enormous amount of money to get goods into their warehouse for central distribution, and that's after you get past the buyers.

Independent retailers are rarely interested in unknown brands unless the price is rock bottom and even then with good margins.

Clytus

DubTony wrote: »

As a retailer I'd say these goods need to be either dirt cheap or grey market imports. Supermarket gross margin on toiletries is in the region of 20% to 25% unless there's a BOGOF or other special offer where the margin is reduced. Having said that, during the last couple of years margins have been squeezed quite a bit, as retail prices haven't increased.

Branded goods are still where it's at with toiletries, I assume you're talking about deodorants, shampoos etc. In my opinion the cheaper end of the market has never really taken off (I don't know about Aldi and Lidl). But there are very few, if any, own brand products in this sector.

Selling to retailers isn't as simple as it used to be. Outside of the multiples and discounters, the symbol groups have the market wrapped up. Many Centra, Spar etc. retailers are tied into buying agreements and rarely buy outside.

Buyers for the main symbol groups, Musgrave (Centra / SuperValu) and BWG (Spar / EuroSpar / Mace) must go through a "screw the supplier to the wall" course when they get the job. I have it on good authority that Musgrave charge an enormous amount of money to get goods into their warehouse for central distribution, and that's after you get past the buyers.

Independent retailers are rarely interested in unknown brands unless the price is rock bottom and even then with good margins.

I never really had trouble with MSVC...but if you want trouble theres no-one better than Tesco. Total nightmare....from start to finish...although youll get the volumes.Lidl and Aldi are by an far the most simple to deal with.

DubTony

Clytus wrote: »

I never really had trouble with MSVC...but if you want trouble theres no-one better than Tesco. Total nightmare....from start to finish...although youll get the volumes.Lidl and Aldi are by an far the most simple to deal with.

I recall talking to a company owner a few years ago about his negotiations with MSVC, and he said it was the most terrifying thing he had ever done. The buyer (do they call them trading managers?) made him feel like his products weren't worth selling. When he got to his car he had to ring the office to double check that he hadn't just put himself out of business. Scary stuff. Maybe the buyer was having a bad day.

FAIRLANE

Thanks for all the replies......some great advice to take onboard.
In regards to the chain stores If a contract is signed & order put through how do they pay? are they all different or is there an industry standard ie; in advance, COD, monthly, quarterly????

Many thanks

Clytus

It depends..one of the German discounts sends a cheque for every accepted delivery. Most pay monthly....BUT alot will seek rebates for long term agreements...can be 1% of annual sales...so that needs to be factored if applicable.