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I've been selling boxes of hand filled molded truffles this season, but am starting to think about a line of "luxury candy bar" for next fall. I have no retail location & would have to sell wholesale to local stores/supermarkets. Before going too far down this road though, I need to figure out what kind of mark up retailers might expect/demand. I know a lot of Bean to bar makers have suggested retail prices from $8-$12 for 3-5 oz bars, which strikes me as excessive. If a 3oz filled, molded bar sells for $2.50 retail, what can I sell them to the store for? Thanks for any thoughts on this.

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If you wholesale you have to consider not just store mark up but distributor as well.  I know for natural food the standard mark up is 30% for distributor and 40% for retail and 40% minimum for yourself.  So figure yours from cost then dist. than retail and you will have your sell price.

Thanks Julie. Distributor like a Sysco? Is it similar to beer where we're required to use a distributor or can I simply make direct sales/delivery? At least locally to start.

You can sell directly to local stores to start out.  Get market data and refine your operations. 

In California you need to register with the state to sell wholesale.   (DFR Application)

When your business is ready to scale, distributors will be an essential part.  Most of the big stores require that you use their distributor (I think).

Michael is right.  You can start out selling direct to the smaller stores (gourmet, specialty).  You can leave in the dist. % if you think you will eventually be going that route.  In the meantime you will have some leeway to put your product on sale.  The larger chain and grocery stores have their own distributors and some prefer you go with one of the ones they currently work with.  There are smaller regional distributors and there are the big guys like Sysco.  I would start with a local distributor once you get enough interest.  You will need to build up to that first.

Yes figure on profit margin not markup.

Hey Ben,

Depends where you want to sell your bar.  Pulling from my last Fancy Foods Show, specialty food shops typically run on 40%-50% margin  (which is quite high because they don't have the volume to support lower margins).  Please note that margin is different than markup.  Supermarkets are in the 15%-30% margin realm.  While $8-$12 dollars is certainly high, specialty food customers typically have higher disposable incomes, so price is not a big factor in their purchasing decisions.  These customers are the same people paying $10-$15 for a jar of sauce or salsa. 


Hope this helps.  I actually just got my first wholesale customer the other day, so I might be able to help you out with other questions about wholesale as well.

Regards,
Mike

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