business-legal Selling powders at a retail store

SadisticPeppers

SadisticPeppers

eXtreme Business
Recently, I stopped in to a small mom & pop store near me that sells a wide assortment of teas, seasoned salts, powdered spices, and other items. They did have ghost pepper infused salts, but no superhot powders, at least nothing hotter than habanero. When I spoke to the gentleman who ran the shop, he seemed genuinely interested in purchasing superhot powder from me when I could finally produce some from the plants I'll be starting next week.

My main question is, has anyone had prior experience with such an arrangement (selling powders to a small shop for them to have on the shelves) and how much would you all say is a fair price per ounce. I obviously don't want to overcharge, but I also want to make at least a little something off the arrangement, even if it's only a couple bucks.
 
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Straight up dried and ground peppers with nothing added?

I've been selling those at a farmer's market for a few years now. Prices a little different based on pepper, but $6/oz for habanero (and below), $9/oz for hotter. They sell fine. The guy at the general store I frequent says those are reasonable prices. Wholesale to him runs half my market retail.
 
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HellfireFarm said:
Straight up dried and ground peppers with nothing added?

I've been selling those at a farmer's market for a few years now. Prices a little different based on pepper, but $6/oz for habanero (and below), $9/oz for hotter. They sell fine. The guy at the general store I frequent says those are reasonable prices. Wholesale to him runs half my market retail.
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Nice, thanks for the info, that price seems fair.
 
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salsalady said:
Here's a commercial outlet for hot chile powders. They deal in bulk, so their prices will reflect that. Homegrown etc, will command a higher price. https://www.firehousepantrystore.com/bhjopepr.html

Check to see if any licensing or processing regulations are needed. Don't want to get in trouble...;)
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Good call, I'll check!

Edit: A quick check of the Florida Cottage Food law on the state website states that "dried herbs, seasonings and mixtures" are permitted to be produced & sold in person, online or via direct mail. I just have to make sure the powder is properly packaged & labelled with weight, ingredients and some standard verbiage the website provides that says its preparation & packaging falls under the Florida Cottage Food Act. Basically anything that doesn't need to be refrigerated like dried/dehydrated fruits, powders, cereals, cookies, the list goes on, I'm good to go.
 
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SadisticPeppers said:
My main question is, has anyone had prior experience with such an arrangement (selling powders to a small shop for them to have on the shelves) and how much would you all say is a fair price per ounce. I obviously don't want to overcharge, but I also want to make at least a little something off the arrangement, even if it's only a couple bucks.
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Start off with a consignment arrangement. The shop owner does not have to buy inventory but makes commission on every sale. This is usually a beneficial to both parties and it also allows you to adjust pricing if sales are low without the shop owner not placing any reorders, so you have the ability to test pricing. Since it is commission they are more likely to keep up a stock if they have space, and if it starts selling, bonus. At this time you could arrange to sell them directly or keep up the commission agreement. 40% is standard to the shop owner. 30% minimum if they are comfortable with that. See if you can create a display you could put on the counter near the register. At least as an introductory offer before it goes to the shelf. Multiple displays, multiple shops, commission to start. Get it out there!
 
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The Hot Pepper said:
Start off with a consignment arrangement. The shop owner does not have to buy inventory but makes commission on every sale. This is usually a beneficial to both parties and it also allows you to adjust pricing if sales are low without the shop owner not placing any reorders, so you have the ability to test pricing. Since it is commission they are more likely to keep up a stock if they have space, and if it starts selling, bonus. At this time you could arrange to sell them directly or keep up the commission agreement. 40% is standard to the shop owner. 30% minimum if they are comfortable with that. See if you can create a display you could put on the counter near the register. At least as an introductory offer before it goes to the shelf. Multiple displays, multiple shops, commission to start. Get it out there!
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Thanks THP. I was looking into doing just such a thing, as my mom did a similar thing years ago for something kinda similar.

As an aside, one thing I've given some thought to and am looking to potentially do is buy a plant nursery. A plant nursery owner in my area happens to be selling a 10-acre one in my area for $250k (the owner is looking to retire by the end of 2025). They already have a space devoted to fruits & veggies, which they sell at farmers markets, and if I start an area solely for peppers, and make enough money from the pepper side of the biz, I could slowly increase the space devoted to them until I have the entire space to peppers and related products, as there's more than enough plant nurseries around here.

If I get a settlement reasonably soon from the lawsuit I have relating to what happened to me last year, I'm 99.999% sure it'll be more than enough to buy it (even after paying what debts I need to), and slowly transition away from my VA and IT jobs, which have been sources of increased stress on their own the last couple of years. I could also build out a space on-site to dehydrate and grind up peppers for powders and/or make bases for sauces and find a co-packer in the area to bottle them for me to sell.
 
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