misc Bulk pricing and sales?

TheGoodGeneral

TheGoodGeneral

Not sure if this is the right spot for this thread, apologizes if not.
 
I've had a couple of restaurants inquire about buying my sauce by the gallon instead of the normal wholesale case price. My current wholesale case price is high by their standards at $42 per case.  I am currently selling to 6 bars/restaurants who keep it in their condiment caddys and have it in 3 retail locations.  These numbers will increase as I have decided to take an extra day a week from my full time job and devote to the Fancy Cat Sauce Co.  I still make it myself with 2 people I've hired in a commercial kitchen but plan to meet with a co-packer this week. I suspect my cost per bottle will go down once I switch to larger quantities. 
 
My question is, do any of you sell by the gallon? If so what is the typical savings to the purchaser? I have subtracted the cost of each bottle/cap/shrink wrap and added in the cost of the gallon container and that is only a $6 savings.
 
Also, slightly unrelated, there is a potential new client out of state(which gets me in a new market!) who wants to sell it retail as well as use it in a menu item. The owner/chef there loves the sauce but asked in what quantities she would have to buy to get the wholesale down. I am currently thinking of lowering the per bottle wholesale rate from $3.50 to $3.00 if she buys 4 cases minimum. 
 
Thoughts?  One thing I know I need to do is a cost breakdown. I had it locked in but since the last production increase and factoring in the two part timers I pay I lost track of my current cost per bottle.
 
 
 
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This will not answer your question and I am not a sauce guy but there was a thread about this in the past. The one difference, the restaurant WOULD NOT take plastic gallon containers of hot sauce and wanted glass. I'd make sure plastic is fine and if so the experts I am sure will chime in here. :) 
 
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In my opinion, you have two things going on here.  Restaurants using your sauce in the kitchen and on the table.  I would think the kitchen must be by the gallon but if it's in the table it needs to be in a bottle.  That is your advertising and if they put it out in a bowl, nobody will know where to find it.
 
I have heard that having your sauce in a restaurant can be very lucrative.  I know of one company that sold it to restaurants for just over cost and that's when his business took off.  This is a major hot sauce company we all know.  I would think you should at least give them the distributor price because they are doing you a favor more than the other way around.  Let's face it, they can get Cholula or Tabasco for less than you can sell yours at cost.  But if your bottle is sitting next to a bottle of Tabasco, which one do you think they will try.  Yours!  Then they will see your website and where to buy it locally.
 
I plan to identify three popular restaurants that have a menu that all my sauces would work w/ and approach them.  I will sell at slightly over cost.  Just my thoughts on the subject.  I have been thinking about this much lately.
 
Ken
 
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My only concern w/ that would be they are using the same hot sauce bottle over and over. Top it off and don't clean it?  Clean it and the label is shot. Does it need to be refrigerated?  If not then maybe it's less of an issue. Good luck.
 
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One local pub uses our Ghost Fire Hot Sauce, refilling clear plastic condiment bottles (2) that have labels that get replaced as needed from a gallon jug, and they sell 5 oz bottles out of their front gift case. 
 
Wholesale price for the gallon is $45, wholesale price on 5oz bottles is $4.80 (24 bottles per gallon, someone do the math.   :lol: ) 
 
The pub has a wall rack with various hot sauces, they don't utilize caddies for each table.  The plastic squeeze bottles can be cleaned and refilled from the gallon jug as needed.  The labels are high quality gloss labels and hold up well, don't smudge with water, but eventually will wear on the edges from handling.  They peel off the plastic bottles just fine and replace with a fresh label. 
 
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Make sure you do your research on utilizing plastic. We have had a bit of a halt on a HUGE order because there was a concern from the manufacturer about our sauce in question holding up in plastic....whilst this is a long (and annoying) story, we hope we are close with not only the remedy but also a pretty piece of paper that explains about said remedy.
 
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can't wait to hear the end of that story, FeistyParrot.
 
 
 
GoodGeneral- I figure it costs about $2.50 per bottle in CoG which leaves $2.30 in profit and to pay for my time.  $2.30 x 24 = $55.20   
 
Considering the costs of glass, labels, shrink bands, and labor that I don't spend...I'm fine with $45 per gallon.  They support me as a local business, I support them, we get some retail sales of individual bottles from the front gift case.  I'd probably have to revisit that number if I were selling a lot of them.  Right now, it's one pub, 3-4 gallons a year, plus the bottles. 
 
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Right on. I definitely see the upside in getting in with a good spot and playing the long game. I think it'll help my brand get out there so I'm going to offer gallons to a select few businesses that I feel will help with my retail sales.
 
Thanks. 
 
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So in this case, is the gallon used as a honeypot to leverage a deal, SL?  The gallon is an option at my co-packer but they were adamant about no splitting kettles on the bottling. I would have to get 2 kettles of 1 G food grade plastic containers.  That's a lot of gallons, so it's not feasible for me at this time...but I see the allure of it.
 
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I look at it more like-
it's not loosing money, but I'm not making a ton of money.  The Pub doesn't sell a whole lot of bottles out of the gift case so neither of us are getting rich off of bottle sales.  But I do get several sales that mention "I tried it at the Twisp Pub".  So for me it's a good way to build brand recognition, and hopefully those customers will also buy it at the other stores in the valley. 
 
When processing/bottling hot sauce myself, if the pub needs a gallon, I can set it aside out of the batch, no big deal.  If I had to buy (???) gallons worth,  I probably wouldn't do it.   
 
If you have to buy 2 kettles of gallons, you will likely be sitting on those for quite a while.  Considering the Pub is paying $45/gallon for a table hot sauce when Tapatios/Tabasco/Whatever is probably $10/gallon, they are also taking a bit of a hit putting out free-pour hot sauce at $45/gallon.  It's a mutual "support local business" thing, and it works for that pub.  Wouldn't work for every place though, as most restaurants won't take on a hot sauce at $45/gallon just to have it squirted onto plates like catsup and wasted.
 
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