Our First Two Stores & A Note On Wholesale Pricing December 19 2013
That's right Brooklyn Delhi is now being carried in two physical stores. It's kind of surreal to go from the idea of a product to actually seeing it on a store shelf. We have been lucky in that friends in the food community in Brooklyn (Jackie Gordon AKA Singing Chef, Dara of With Love From Brooklyn & Allison Robicelli to name a few) have helped to spread the word about our achaar before we even approached any stores. The two stores which we'll always keep dear to our hearts are Greene Grape Provisions in Fort Greene and ALC Italian Grocery in Bay Ridge. We're so thankful to them for giving us a shot!
So if you are looking to get your food product in stores, there are a couple things you should know. The first is that you should have a sales sheet prepared that has information about your product and a brief story or rationale for why the store should carry it and why a consumer would want to buy it. You will also need to determine your wholesale price.
There are a couple terms that you should be familiar with before you come up with your wholesale price - markup and gross margin. Markup is basically the percentage difference between your wholesale price and the retail price or what the store is selling your product to consumers for. For example, if your wholesale price is $1 and the retail price is $1.25, then the markup is 25% and is calculated as follows: (retail price - wholesale price) / wholesale price.
That is a figure to be familiar with, but the more relevant term to apply when coming up with your wholesale price is the gross margin because that is usually what stores use to calculate their retail price. This equation is calculating the percentage difference between retail price and profit for the stores. Usually for speciality food stores, their desired gross margin is in the 40% range so using this as our assumption, the retail price is calculated as follows: retail price = wholesale price / (1-0.40). That said, if your wholesale price was $1, your product would sell for $1.66 in the store at a 40% gross margin.
All in all, you should make sure that you are selling your product at a fair price to a consumer and that you are not losing money.
I hope this is helpful and feel free to leave a comment or email if you have any other questions on the topic. It can get a little confusing!