Start up companies; wholesaleing minis to retailers. Anyone have experience?

[jamii]

 Hello,

I wanted to know if there were any retailers here with retail shops? Be it online or physical storefront who resell minis from other producers; i have a question if may get some help on.

Is there an 'industry standard' for mark-up?

Lets say new companies are just breaking into the mini genre, and they want to wholesale their wares to retailers; Is 200% considered a good mark-up?

What i mean is, lets say an M.S.R.P. (Manufacturer's Suggested Retail Price) lets say hypothetically speaking, an MSRP is $15.00. You wholesale them for $4.50-5.00 ea. and they then mark it up to $15.00 and sell it. Their profit is 200%

Is that considered a good enough retail profit margin for them?

Considering they have overhead, minimum per day profit margins to consider, etc. etc. And sometimes they will have sales to attract customers, clear out inventory, etc. etc. etc.

Is that considered good enough?

is that good/bad?

I would love to hear from peoples thoughts if anyone has experience in the retail sector. 

Im seeing a whole new wave of entrepreneurship these days.

The industry is growing. I think thats good.  People are dabbling in all kinds of genres now.

[Dewbakuk]

Their profit is 200%

That's not how profit works. That would be markup as you correctly said initially. A shop would love those kinds of figures, they're better than they'd usually get. Assuming the product would sell etc. Those figures are a bit better than Distributors usually get them at.

[black hat miniatures]

Normal discount off RRP is 35-40% in the UK (at least).

If you are selling to a distributor it will be 60% off RRP.

I sell to me overseas retailers at 40% off RRP and they set their own end price to allow for import costs and Currency...

Mike

[jamii]

Normal discount off RRP is 35-40% in the UK (at least).

If you are selling to a distributor it will be 60% off RRP.

I sell to me overseas retailers at 40% off RRP and they set their own end price to allow for import costs and Currency...

Mike

Thank you for that, thank you both!

um, i think im misunderstanding. RRP is Registered Retail Price?

okay, let me try it simple. (please forgive my uncaffeinated brain, i need some more coffee its the middle of the day here)

if something is selling in a store for £10, you sell it to them for £4, then that means they make £6 profit when it sells, or 60%

correct?

[Quirkworthy]

RRP = Recommended Retail price.

[Dewbakuk]

RRP = Recommended Retail Price.

if something is selling in a store for £10, you sell it to them for £4, then that means they make £6 profit when it sells, or 60%

correct?

Yes, although again, that's not profit it's markup

Profit is calculated after factoring a lot of other things such as shop running costs etc.

[jamii]

RRP = Recommended Retail Price.

Yes, although again, that's not profit it's markup

Profit is calculated after factoring a lot of other things such as shop running costs etc.

Cool!

ya, ive had coffee now, thats what i meant.

It must be a challenge running a hobby gaming store, staying on top of all that. Dont know if i could ever manage that, id be awake up all night always wondering if there was any expense i missed.

Support you're local Hobby Gaming store.

[black hat miniatures]

Thank you for that, thank you both!

um, i think im misunderstanding. RRP is Registered Retail Price?

okay, let me try it simple. (please forgive my uncaffeinated brain, i need some more coffee its the middle of the day here)

if something is selling in a store for £10, you sell it to them for £4, then that means they make £6 profit when it sells, or 60%

correct?

No,

If I am selling direct to a store they get 40% discount which means they buy it for £6 and make £4 profit...

Only distributors (who then sell to stores) get 60% and they have to buy a LOT to get that discount.

Mike

[Silent Invader]

And the trade discount might be before VAT, so for the UK

If £10 MSRP (and this must include any VAT element applicable to it, which at 20% would be £10/1.2 = £8.33, => £10.00 - £8.33 = £1.67 VAT)

@ 40% trade discount

= £4 trade discount

=> £6 trade price

@ 20% VAT

= £1.20 VAT

=> £7.20 is paid by retailer but £1.20 VAT could be recoverable IF the retailer is VAT registered, etc to partially offset the VAT element that will become due from the sale price (which in this example is assumed to be MSRP)

So in actual (and extremely simplistic) cash flow terms, for a VAT registered retailer buying from a VAT registered manufacturer (or wholesaler) and with a final sale receipt that included VAT.....

Retailer buys @ £7.20 gross
Retailer sells @ £10.00 gross
Retailer receives £2.80 gross

Retailer has collected £1.67 VAT gross on sale
Retailer has paid £1.20 VAT gross on purchase
Retailer pays Government VAT £0.47 net

Retailers net receipt from £10.00 sale is £2.80 - £0.47 = £2.33



Gets a bit more complicated if overseas is introduced!

Btw: none of the above constitutes advice and has been tapped out with kind ginger on my phone so might be full of errors!  

Edit.:  see ...., kind ginger is an auto correct of one finger!

[v_lazy_dragon]

And there was I having mental images of you tapping it out with a biscuit instead of your finger!

[jamii]

No,

If I am selling direct to a store they get 40% discount which means they buy it for £6 and make £4 profit...

Only distributors (who then sell to stores) get 60% and they have to buy a LOT to get that discount.

Mike

A lot as in how much? 50-100pcs?

What if a small retailer wants only, say 20 to start out with?

I assume then you have minimum purchase orders?

[black hat miniatures]

A lot as in how much? 50-100pcs?

What if a small retailer wants only, say 20 to start out with?

I assume then you have minimum purchase orders?

It tends to depend on where the retailer is (if I have no retailer in that country I might cut a deal to get a presence) but yes there is a minimum order level.  For the paints it is 40 colours x 6.

Mike

[jamii]

well thank you for that, thank you.

I guess my next step now is to investigate laws regarding wholesaling to customers in another country. (i.e. Someone in Canada or US selling to someone in the UK and Europe.)

Ive learned about Import Duty fees, but im still not entirely sure how VAT works when it comes to someone outside the country.

Ive been able to learn a lot just by google searching.

thats actually how i found this forum. 

and im very glad i did.