R Has a Plan B Hypothesis

Hey R,

This is complicated, and now that is see the product in the pix, I have 1,000 words of explanation...

I can see why the guy offered you a straight ten percent....  you won't get away with a mark-up since any customer will simply go direct and cut you out of your mark-up...

Exclusives cannot hold in int'l trade, so that won't work.

The maker needs a sales person, since the product is ready to go...

To your questions...

Questions: 

I am really caught up on the concept of minimum orders. What should I expect, what is a reasonable quantity and price point? 

***Well, you will be offering to retailers, who will have a one box minimum...  but I think you need to know the distribution system in Canada...  my guess is a distributor with 500 small retail clients in in say Vancouver (and there would be say 10 total in Canada...) would buy a minimum to stock and there would be 500 retailers with a  sample set.  But find out:  this is wall covering...  how is wall covering distributed in Canada?  Do you know someone in the biz?  Do you know someone who has bought high end wall covering in the last couple of years?  How does it work?  That is what you work within...***

He sells his flooring and wall coverings by sheet. So would the order be in weight or number of sheets??

*** M2...  ***

I have sent along some photos hopefully it will give you an idea including part of his pricing sheet that's in American dollars. Each sheet is around $100! What's your opinion on that price?

***My opinion is always the same.  What is the customers opinion of the price?  Usually no opinion.  The opinion that matters is of the product, since in that specialty market the price does not matter.***

Also should I include in my proposal that I will be buying from him in Brazilian dollar? That would be ideal for me! I don't make Canadian dollars anymore ... Shucks ....

*** It very well may be the only reason he exports is to get USA dollars...  but then he gets paid in brazil currency domestically so he is used to it..*** 

The brown box is full of samples, the entire box can be left with prospective buyers! 

***at $10 per box, times 500 boxes?  You got that?  If you pursue this, start with maybe one distributor and he tests with ten of his clients.

What is your hypothesis on this plan b proposal?

" I believe if I can get this high end wall covering into distributors (appropriate?) they will market it to retailers who in turn will buy enough to cover the suppliers minimum in a workable amount of time, profitably."

Is that your hypothesis?  If so, then you need to affirm to whom you would be supplying (since it is not you in Canada) and then test to find out if the distributor is not better off going direct.  (What value are you providing?)

If you will be in Canada soon, you can check this out fairly easily...  some pointers:

1. Do not discuss this with friends and relatives.  They are not customers.  Any time spent talking to them is time not spent talking to people who would be customers.

2.  Do not figure out how to overcome the market structure to get around any preference the market may have for going direct (exclusive, secrecy, etc).  Look for a trade line that is not being served and no one else will work in...  EG, you buying wholesale direct in Brazil against orders from NA and shipping 12 m2 ($2000) at a time to a specialty design firm that uses the stuff as an accent in wall covering in tiki bars...  find a market that no one will serve, as opposed to trying to outsmart everyone in a market that is served.

the 10% commission offer only makes sense if you'll live in Canada.  The next rational thing is to sell to a Canadian importer, but that entity will simply go around you.  It seems to me you market is whatever else is not being served.  You need to test that hypothesis on your next visit....***

John

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