Bulk Soap Prices

[candicec003]

Hello Soapers!

I have recently struck one of my first wholesale deals with a health food store that would like to sell my soap I was so excited to be striking a deal that after leaving the store and thinking about it, i didn't barter with her. I knew my bottom dollar and when she offered her price i accepted it (which was my bottom dollar). This is bulk pricing, she is taking 96 bars (kinda just want to make it an even 100) for 5.00$CAD. Which equals out to 3.89$USD. When i sell my soap i sell it for 7.00$CAD. My soap is all natural and organic. My question is, would it be inappropriate to come back to her a few days after our conversation and establish a minimum amount of soap for the bulk pricing we established? We didn't talk about that in person. I want to tell her if she orders less that the 96-100 bars the price will go up. And by how much? I want to say 5.00$ for 100 bars but below 100 bars the price will go up to 5.50$ per bar. Does that seem reasonable? Looking for input/advice. Thank you!

 

[SparksnFlash]

From your post I'm assuming you have a verbal agreement at this point. If so, the smartest thing you can do is set up a written contract (ask a really good business person or preferably an attorney for some help). Incorporate your understanding of the verbal agreement, which would include the minimum order for bulk pricing and you can also include a price for lesser bulk or individual bar orders. You may also want to set out specifics regarding what is "bulk", or you may end up making 20 bars of xyz soap, 20 bars of abc soap, 20 bars of cba soap, etc., which will cause you untold headache and work.

A verbal contract is as good as the paper it's written on. There are too many ways for misunderstandings to occur.

Oh, and GOOD LUCK

 

[toxikon]

You may want to phrase it in terms of the percentage of discount she'll receive when buying in bulk. It feels good to 'get a deal' and it'll be a good reference point for you for future orders.

As an example:

1-30 bars: $7.00 per bar (full price)
31-60 bars: $6.30 per bar (10% off)
61-99 bars: $5.60 per bar (20% off)
100+ bars: $4.90 per bar (30% off)

Another thing to keep in mind... offering bulk discounts only makes sense if it's EASIER for you to make more soap than less soap. If it's more of a headache to buy bigger molds and equipment, spend more time cutting bars, don't have enough room to store them all while they cure... then why the heck are you getting paid less? :mrgreen:

 

[BrewerGeorge]

I think it makes perfect sense to go back in a few days with a written contract that encompasses what you discussed.

 

[shunt2011]

I agree that it would be perfectly acceptable to provide a contract with minimums. I do wholesale and I have a contract with minimum product (6 bars of any fragrance minimum=1 case), I don't have a bar minimum but have a dollar amount, delivery time table and they are responsible for shipping, payment terms etc. I however had it all together before ever speaking with them.

 

[Saranac]

My very honest opinion--

If you haven't already, sit how with a pencil and paper and write down everything you discussed that could be considered a verbal contract.

And then--stick to it!

My DH (who acts as my sales rep) gave me some very good advice shortly after I picked up my first WS account--you don't want to come off as someone who's constantly changing the rules of the game. Whether that's bottle color, or fragrance names, or sales terms. Even if you're not 100% happy with something, stick with it for a little while.

Now, with that said, I have been in the position where something important didn't come up in a meeting. If it's minor, I've been known to sneak it into a written contract. But if it's major (and I would consider anything to do with money to be major!), I'd chalk it up to the learning curve and ride the wave for a while (6-12 months). After that time, I would phrase it as a "due to the economy, or gas prices, or whatever, I've had to make a small change to our pricing strategy."

And one final note--just because you have this contract with one account, doesn't mean you have to do the exact same thing with another. The first 2 accounts I picked up get delivery free (because I was afraid it would make things too expensive); now, everyone else pays for it!

 

[TBandCW]

I'd suck it up and consider it a lesson learned. You want to be professional. After a year you can renegotiate, but make sure you bring in a wholesale list with every price, etc. I charge 3% if my wholesale accounts want to pay by credit card. Lo and behold, when I went to collect from one of my accounts it was a credit card and didn't want to pay the 3%. It was there in black and white on the wholesale list. I was ready to walk away and now they pay by cash every time!