wholesale distribution of candles in the...
TRANSCRIPT
WHOLESALE DISTRIBUTION OF
CANDLES IN THE US MARKET
A corporation must be opened in the state you
are based in.
Warehousing
You must have a substantial amount of stock
warehoused in the US.
It is very inefficient to ship small and medium
sized shipments to clients from overseas.
Fast lead time is a factor with many clients who
order last minute.
US wholesale customers are accustomed to
dealing with their vendors within their borders.
Getting Started
Professional Services
You should retain the services of an accountant to
assist you with any tax issues that may arise.
You should retain the services of a lawyer to assist with
any legal issues that may arise.
Accepting payments
About 24% of all business in the US is conducted in
corporate checks.
About 1% of all business is cash.
About 75% of all business is done with credit cards. You
need to set up a merchants account to accept credit
cards.
Keeping the financial end of your business
organized in the US is very important for several
reasons,
The US government periodically audits US
corporations to make sure they are paying their
taxes.
A US company with a “good credit rating” has easy
access to financial loans and terms with their
vendors – which is key to investing and growing
your business.
Who are the candle buyers?
The market is divided in two major
segments:
Retail Market
Business to Business Market
Retail Market
Retail shops selling to individual clients.
Department stores
Mom and pop shops
Chain stores
Gift shops
Sales are usually steady and predictable at each location.
The retail market is very trendy – always looking for fresh new ideas.
A quality product with unique packaging is what retailers are most interested in.
Business to Business Market
Businesses that buy candles for their own use.
Restaurants and bars
Event planners
Event Halls
Sales are usually low price, high volume, repeat
orders.
Prompt availability and competitive pricing is what’s
most important to these clients.
Should you focus on only one
segment of the market?
No. You can and should sell to both target
markets – you need the capability to cater to the
needs of both markets and that means:
A diverse product line.
Availability of products.
Quality products.
Fast delivery or shipping of orders.
How to Reach New Clients
Trade Shows
Direct Marketing
Hiring Sales Representatives
Trade Shows
One of the best ways to get in front of a lot of
customers and prospects in a relatively short
amount of time.
At a typical national trade show, with 10,000 attendees
and 1,000 exhibitors, you can realistically have 200
visitors per day.
Very costly – A major show will cost you $7,000 –
$10,000 – but worth it if done right.
Follow up after the show is very important.
Direct Marketing
Putting together a list of potential clients.
Cold calling these potential clients and seeing if they
would be a possible client.
Goal is to get a sample of your quality product in their
hands for them to test.
Very costly - you have to pay for the samples and
shipping.
Very effective – these are clients who already use or
sell that type of product.
Persistence is the name of the game – it may take
several follow-up calls and lots of samples.
Hiring an Independent Sales Representative
Independent sales reps usually sell several products from
multiple manufacturers.
They may only cover a certain territory, ranging from local
areas to several states.
You may have several reps covering different territories.
There are several ways to meet and interview potential
sales reps.
During trade shows
Word of mouth
Industry directories
Their pay structure is commission: usually 15% of sales.
For the Gift Industry
Glass scented candles
Pillar scented candles
Candles with special color effects
Candles with religious designs and/or shapes
Candles with abstract shapes
Popular products sold in
the US market
For the Business to Business Industry
Pillar unscented candles of all sizes
Votive candles (regular and glass)
Taper candles
Tea lights
Floating candles
Scented candles tailored to the specific need
Packaging
Pricing
Quality Control
Preparing your product for
the US market
Packaging
Packaging is extremely important in the US market
– especially for the retail market.
Your packaging needs to be attractive and unique
from the competition.
Packaging must contain detailed information about
the product:
Weight in oz. and in kg.
Approximate burn time.
Description of product.
Type of wax: paraffin, soy, palm, beeswax
Packaging must have “how to burn” information and
disclaimers.
How to prevent fire
Maximum burn time if glass candles
Packaging has to be cost effective.
Your packaging should not exceed 20% of the total
cost of the candle.
You need to strike a balance between an impressive
looking product and one that is competitively priced.
Here are some examples of
successful packaging:
Letters of the Alphabet Theme
Religious Theme
Floral Theme
Pricing
You need to know where your competition is pricing their products.
Search the internet.
Visit trade shows.
Browse shops, boutiques and anywhere candles are being sold.
In pricing your candles, keep in mind that most retailers will multiply the wholesale price by 2.5 times when they resell a product.
You must keep this in mind throughout the whole process of developing your product.
Quality Control
The US market is very demanding and a quality
product is extremely important.
The four components to what makes a quality candle
in the US market are:
Fragrance throw – your scented candle must have both
a strong cold throw (point of sale) and hot throw
(customer loyalty) – both are extremely important.
Durability – your candle’s durability should be directly
related to it’s cost. In developing a new product, the
durability must be equal or greater to that of other
candles in the same price range.
Cost per burning hour - US consumers are very
interested in the “burn time” – Your candle needs burn
efficiently in order to compete in this market.
Burn quality – your candle should not produce any
noticeable soot. Thorough wick testing should be
done to ensure a clean burning candle.
RETAIL DISTRIBUTION OF CANDLES IN THE US
MARKET
Internet Sales
Retail Store
The internet offers an efficient and profitable way
to retail your candles.
The margins are very high.
Growth is steady and progressive – building up your
client base and name recognition is the key to
successful internet sales.
Competition is fierce – your website needs to be
professional and user friendly.
Internet Sales
Your website needs to be professionally designed User friendly
High quality pictures
Ability to charge a credit card (shopping cart)
Customer service (toll free number)
You need a system in place for processing the orders – timeframe between when you receive an order and shipping it out the door should be no more than 2 days. Candles must be “in stock” for a fast turn around time.
Materials for packaging small shipments must be organized.
Shipping account must be opened with FedEx, UPS, etc.
Policies for returns, broken items and other customer service issues must be in place and “in writing” on your site.
How to retail your candles in the US online
Retail Store
Too much work.
Employees problems.
Always innovating to keep clients coming back.
Time locking.
You must wait for clients to come to you.
Stores that sell only candles have not had a high
success rate.
Usually have to source out other types of merchandise to
complement.
Only stores with a widely recognized brand will be
able to stay in business if selling candles alone.
Conclusion
Entering the US candle market can be a huge opportunity for any company.
Knowledge and organization are the keys to success in this market.
The American consumer is educated and has thousands of choices – if you have a quality product and the homework is done to make sure that price and packaging is right, your chance of success is very high.