Wholesaling / Consignment / Getting my shizit into stores

[Gemini Crow Sauce Company]

Any business I have ever ran, was pretty much a DIY venture without the ultimate goal of world wide domination.
 
WIth the hot sauce, I want to explore the idea of at least getting into some local stores and shops, on top of my farmers market and expo appearances.
 
So, I went into a local farm that has a shop that carries all sort of food and condiments and seemed interested in tasting my sauces and discussing the idea of bringing some in for their shelves. I was asked questions about wholesale costs, retail price, yadda yadda.
 
I know how much each sauce costs per bottle, when you factor in the sauce, the label, the shipping of the sauce to me, etc....
 
Not sure about mark-up?  Obviously I make more per bottle selling on my own live or via my website, but the idea of having someone else doing the work is appealing to... exposure exposure exposure...
 
How much do stores like /need to mark-up a product they bring in for it to be worth their while? How much do I mark-up to make it worth it to me?  
 
Do I need to offer a return policy? If so, how long?
 
Am I missing any aspect here?    In the process of building a wholesale one sheet (im gonna use Lucky Dog's as a guide....Scott's my idol.)
 
 
There are also a few restaraunts in the area I may try to see if they'll use my stuff.... I live in a very rural area with establishments very interested in promoting locals then mainstream widely available products. I think I have a good shot in getting in some places...
 
 
Teach me. I'm here to learn

 

[AJ Drew]

You guys ( SL n LD ) are frigging amazing.

Gemini Crow, cant help with the math because oh dear god, but do have a wee bit of advice.  Google Kentucky Proud and see if you have a similiar organization in your state.  It is kind of like a universal brand for things produced in our state.  They do both full commercial and farmers market type things.  Their full commercial goods are now in every Krogers, some Walmarts, and other large scale grocery store.  it is in to buy local and the grocery stores are capitalizing big time on it.

 

[salsalady]

 
I was wondering what your restaurant sales pricing philosophy was, since you have been so successful.  I have only approached a couple restaurants. One said they do too much volume and could not afford to put three bottles on every table.  They would probably be spending $400 a month on my hot sauce, which doesn't make sense for them. The other is having their chef test the hot sauce w/ their menu to make sure the flavors are compatible.
 
My philosophy is to strategically select restaurants near stores that carry my sauce.  I charge restaurants about 15% LESS than the distributor price, so I don't want to load up on low-margin sales and be in 50 restaurants around town. I also figure they can get tabasco for less than I can sell at cost so it's kind of a favor to me as well to even carry my sauces. If I were a restaurant owner, I would consider the return on every purchase I made. For a restaurant it's one thing to say I want to support local and will buy three cases of sauce a quarter.  It's another to thing to commit to three cases a month and $3K-4k/yr.
 
Anyway, does anyone have thoughts on restaurant pricing?  I'm not sure why a restaurant would pay wholesale or retail because it can be such a large cost.  But apparently they do?
 
Ken

I missed seeing this post-
 
It is very hard for restaurants to justify buying cases of hot sauce at regular wholesale prices to put out on the tables.  THere's so much waste, and comparing to Tapatios and Tabasco....really hard to compete on pricing. 
 
I had Ghost Fire in the local pub (until it burned...again...a few weeks ago).  They had a plastic squirt bottle with a GF label they would bring to the table when customers would ask for hot sauce.  They also had a rack on the wall with a variety of hot sauces the customers could help themselves to.  The squirt bottle was refilled from a gallon jug.  I charged $45/gallon for the refill jug.  So they were serving the hot sauce, but getting a better price by using a squirt bottle and refilling from the gallon jug. 
 
The pub would also buy regular 5oz bottles at wholesale and have them for sale in the case with their beer mugs, t-shirts, etc.  They'd go through maybe 4-5 cases a year.  It was more a good neighbor thing to have the GF  in there, promoting a local business, etc.  I didn't spend any time at all chasing around town trying to keep several restaurants supplied.  Just an idea~

 

[PepperDaddy]

Wow, you really did find an old post!  I really have not pursued restaurants much.  One place stopped carrying my sauce because people walk out with bottles.  It's too easy to put one in their coat pocket.  So the owner moved them all to his retail store.  I called BS on that because I sold them to him at cost (or just above cost).  So he felt bad and bought a couple more cases at cost and said he would try the restaurant gain. I haven't checked back to see if he actually did though.

 

[salsalady]

ajdrew started it....
 
 
I can see the walk-outs as being a problem.  As well as waste when they splooge half a bottle on their plate and eat about a tablespoon.