Dealer Discounts

[402drvr]

I don't know where to post this so if there is a better spot maybe the mods can move it to the appropriate location.

For now, I was approached yesterday by a dealer who may be interested in carrying my work. This would be great. I am not sure what kind of discount to give him though. Is there any kind of standard you folks know of?

Thanks

 

[MGWSY]

well I know that a typical discount for shops is 40% from pretty much all distributors. Now some products have a 55% discount and others have 24% so it all depends on the manufacturer and their policies.

 

[NH Mike]

Maybe a better question might be how much or how little profit are you willing to take? If it cost you $6 to make something and you put a $12 retail price on it, would you be happy selling it to a dealer for $8? Another question might be what kind of volume will the dealer buy from you? That of course depends on demand by his customers for your product. Can or will this dealer promote your product?, and what is that worth to you? Also will you be selling direct at retail and will that put your dealer in direct competition with you? That can sometimes be a bad thing.

Generally a manufacturer gives their distributers different discounts based on quantities ordered and aggressive selling. Payment method and payment promptness is another factor in deciding a discount.

A lot to think about but the bottom line is what profit do you want after all your expenses associated with your product are covered?

 

[402drvr]

Thanks guys. Yeah its a lot to think about. I think I have settled on a number to see how we do. I do sell direct as well but right now the name is not out there and I think another venue for sale would be good. I think this is the kinda thing that it helps to be able to see it. I was struck by how many folks at the show wanted to touch the paper. Having a couple trains in front also seemed to help people judge scale better than on a website. Overall I think it would help to have it in a public venue more.