# Selling Honey to Local stores



## Ben Little (Apr 9, 2012)

What kind of discount do Beekeepers give " Mom and Pop" Stores to sell their honey ? Is 10 % off on case lots , good / bad ?

Thanks
Ben


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## jean-marc (Jan 13, 2005)

If I understand correctly you want to give 10% of the store because they bought a case of honey or more? Another way of saying this is for example if you sell your honey for $15/kg you are asking if you should give a 10% break because they purchased 12 bottles? So instead of paying 12 x $15 = $180 you would sell it to them for 10% less or $162. Good or bad/ Pretty good for you, not so good for them. Typically in my limited experience stores mark up 30-40% so they can earn their margin. So using the 30-40% margin it would mean you would have to sell them that case at $11/bottle so they could add their 30-40% margin and have their honey come in at $15/kg. If you can negotiate a better price for yourself by all means go for it. You can probably negotiate a better price for yourself close to home. I would think that as you travel further from home you will encounter competition which will keep your price in line with others.

Jean-Marc


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## BMAC (Jun 23, 2009)

We sell our honey at a 20% discount of OUR retail price of the honey and tell them to mark it up accordingly for them.


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## Laurence Hope (Aug 24, 2005)

When I priced my honey to the small chain I sell to, and they added their markup, the price was quite a bit higher than I had been selling it at my retail pricing. I fairly quickly raised my retail to equal theirs. The quantity that they buy makes it a thing of loyalty not to undersell what they need to sell for. After all, I told them what I would have to have wholesale. They accepted that and two price increases since. I have had their customers since come to me to see how much lower my prices would be, and when finding out that I could not morally undercut their retail pricing, the customers have understood a little more about marketing. All product producers must sell wholesale at acceptable pricing not only to their cost of production plus a reasonable profit, but one that allows a fair mark up to retail. In the long run, I have benefitted from this arrangement - a lot of volume going at a fair profit to the reseller and more profit on my retail sales - the best of both worlds.


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## sqkcrk (Dec 10, 2005)

Ben Little said:


> What kind of discount do Beekeepers give " Mom and Pop" Stores to sell their honey ? Is 10 % off on case lots , good / bad ?
> 
> Thanks
> Ben


It's a bad idea to give anybody a discount. Decide what price you need to set to make what you do worthwhile and stick to it. If you have to discount your price to get shelf space you will loose money you could have earned.

My philosophy is that if a store owner or grocery manager doesn't think my honey is worth what I am asking for it then I will find another outlet.

When I approach a Store owner or manager about having my honey on their shelf I tell them that they won't loose anything because if it doesn't sell fast enough I will buy it back at the price I sold it to them. The only honey I ever have to buy back is from a small farm stand which closes down after Halloween.

I do not put honey out on commission either. I sell honey. Stores buy it and sell it. W/ the buy back guarantee.

Oh, I bet you are asking about discounting your Retail Price. When I started selling honey I approached a store near by here and asked them how much I would have to sell it to them to have the shelf price equal the price of other honey on their shelf. I didn't start out w/ a Retail price of my own. I did it sorta backwards.

So, maybe what you might aught to do is look at what the other honey is selling for and ask the store owner what their Markup is. Then figure out whether that pricing equation would work for you. If you have the honey, you will have cashflow all year round, which is worth something.

Make sure that your honey has a higher price than other honey on the shelf. Also try to get into the Produce Section of the store, not the grocery shelves. When I sold honey to five P&C Stores in my county those stores had my honey displayed at the end of an aisle in the produce section of the store. Boy did that look good. I can't imagine the impulse buys that displays like that instigated. Have fun.


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## Ian (Jan 16, 2003)

My honey house price is usually lower that brand name packed honey on the shelf by quite a bit. They buy mine and mark it up accordingly. Works out about right. Ill sell more honey through the retail outlet which is marked up more than what I sell off the farm. Convenience is a huge factor for consumers buying honey. Make sure you charge accordingly.
I sell for $7 per kg, they sell for$9-$10 per kg.


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## Daniel Y (Sep 12, 2011)

Well that stinks. I wrote a really long but good post but don't know what happened to it.

I don't have time to do it again. but the short version is take a careful look at your costs. Such as you pay for bottles and labels. You also pay for show fees transportation to those events and back often multiple times plus your time in selling your product. Figure out which of those costs are removed from you by selling through retail locations. That alone is a straight up you saved it so pass that on discount. then you can decide how much if any it is worth to you to have someone else sell you honey for you. I know I don't work for free and if you came at me thinking I did it would probably kill the deal. Retail stores have a huge investment in their name, reputation and have a ready made customer base. As real life example I have spent many years building a reputation among certain groups. It is not lent to other interests lightly. So in short as a retailer I would be more interested in why your product should set on my shelves than the cost of it. I know if you had an idea or product you wanted presented by me to these other groups. You would have your work cut out to convince me it is a product worth presenting to them. it does not happen often.


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## Ben Little (Apr 9, 2012)

All really good information here ! I am first going to find out from some places if they would consider carrying our Honey and then figure out a price after that.

Since I don't have as much honey to put against my expenses for the year , it does cost more than most larger producers and thus making my honey a higher price . So until I get 10-15000 lbs of honey per year , my honey is sold at 7.00/lb . and that is not really a bad price for good honey IMHO.

Ben


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## Ian (Jan 16, 2003)

That's a good price


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## sqkcrk (Dec 10, 2005)

Ben Little said:


> All really good information here ! I am first going to find out from some places if they would consider carrying our Honey and then figure out a price after that.
> 
> Since I don't have as much honey to put against my expenses for the year , it does cost more than most larger producers and thus making my honey a higher price . So until I get 10-15000 lbs of honey per year , my honey is sold at 7.00/lb . and that is not really a bad price for good honey IMHO.
> 
> Ben


I wouldn't spread my honey out amongst so many stores that you can't keep shelf space all year round. I doubt that very many stores are going to want to make room for you on a seasonal basis. They might, but it would be a bother for the Grocery Manager.


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## Ben Little (Apr 9, 2012)

I am just getting a future reference for what is to come , next year I will be getting 100 packages and I currently have 36 hives , so even with some losses , I "should" have a decent crop for next harvest .
And I want options for selling it.

I wouldn't go to a large grocery store unless I knew I had lots to sell.

That's why I was asking about smaller Mom and Pop stores , they tend to have less stock.

I know from similar experience that our (family) small business has a repair shop and we don't keep 500,000.00 of stock , more like 50-100,000.00 and it has been that way since 1965 .

I will just have to crunch some numbers to figure what I absolutely need to have for our products to even come out on top opcorn:

Ben


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## Ian (Jan 16, 2003)

do you have a place to sell your honey wholesale? close or to Toronto?


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## Ben Little (Apr 9, 2012)

No , I have nothing set up to sell wholesale , I believe I need to be inspected by the CFIA to do that. In a year or so I should have the honey house built that will be inspected by them, we are growing each year , and I would like to keep paying things off as we go along, and the honey house didn't fit in the budget this year , possibly not next year either 

I am doing the best I can with all of this.


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## Ian (Jan 16, 2003)

so your gearing your hives for pollination then? How much honey do you expect off your hives this next year?


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## Ben Little (Apr 9, 2012)

I have been told that the packages do quite well once they are done pollinating blueberries , they only go out in early June , then come back home and make a crop . There is one commercial beekeeper that told me he had over 100 pounds from some of his packages.

Plus a guy can dream can't he LOL :lpf:


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## GaSteve (Apr 28, 2004)

A couple things I have noted about selling to small local retailers.

1) They all seem to like about a 30-40% markup, but they are often willing to put less of a mark up on quality local products and make it up elsewhere. This allows for higher wholesale pricing.

2) They REALLY like year round availability. They want customers to develop a dependency of knowing they can always get the local stuff at their shop without having to look all around town. Loyal, dependable, repeat customers seem to be what keeps them going. Customers that can't get what they came for just one time may find it in another store and not return to the original store.

Also, unless you sell off your front porch, retail pricing often ends up being closer to wholesale pricing by the time you figure cost of setting up at farmers markets, driving to/from, time to pack, unpack, man the booth, sometimes few sales due to bad weather, etc. etc.


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## Ben Little (Apr 9, 2012)

Found a store that really wants to sell our honey and I have to tell them what I can give them as a discount and they are going to mark it up a bit over my "Farm Gate" pricing per jar. 
I have factored in most of my higher costs and came up with a maximum discount of 20 % and I am about to offer it this week. They want to start off with a couple cases and go from there without knowing my offer.

What do you all think ?


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## BMAC (Jun 23, 2009)

I think you are well on your way to feeling out your local market and see how it goes. Remember once a store is no longer profitable to you, drop them as they will certainly drop you. Good Luck


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## Roland (Dec 14, 2008)

I believe you want to price your honey on their shelf slightly LOWER than your honey on your shelf. That way it does NOT look like you are undercutting their retail price. When your retail price is less than their retail price, you look bad.

Crazy Roland


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## Daniel Y (Sep 12, 2011)

The price thing above is not true. Not with the correct stores. Stores offer more such as convenience and consistency. Those features cost. People pay more to have them. Any time I talk to a store owner I consider I am paying them (with my discount) to sell my honey. I expect to get what I pay for.

As far as a discount. It depends on how much they are going to buy. I have a good idea what it costs me to market my honey. I save by simply selling cases of it to one location. As well as continued sales to that same location. So that cost saving to me is applied directly to the discount to them. they pay those costs now and are probably have them reduced since they do it every day.

I like to shoot for a 30% discount depending. On a single case purchase they are not going to see a big discount. ON a multiple case purchase the discount will go up. It costs me less per bottle to bottle up 60 jars and deliver it all at once than it does to make up 12 jars 5 different times and make 5 trips. Discounts take this into consideration.


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## Ben Little (Apr 9, 2012)

The Lady I am dealing with told me that she is marking it up a bit higher then what I am selling it at the farm gate/home. I don't think it makes me look bad, I have to get my price to turn a profit to stay in business I don't want to adjust my pricing to accommodate a store, which is actually a convenience store in a high tourist spot that isn't close to any other stores, they sell a lot of local products and I think they can charge what they want to and still get it.



Roland said:


> I believe you want to price your honey on their shelf slightly LOWER than your honey on your shelf. That way it does NOT look like you are undercutting their retail price. When your retail price is less than their retail price, you look bad.
> 
> Crazy Roland


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## Roland (Dec 14, 2008)

Ben - I guess if she is happy with your pricing policy, then all is good. My fear was that she would thin k you are undercutting her price to lure away customers from her. 

Crazy Roland


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