A few questions about selling to retailers

[Fishbowlz]

My company is a manufacturing start-up looking to sell our first product to local fish stores and online retailers. Before I approach prospective buyers I would like to have some understanding of how the industry works. First off, Ive read that the average dry goods markup at the LFS is ~100%. How accurate is this figure and what factors influence it? Do most mfgs. require a minimum orders from retailer and if so how much? (assuming the product retails for $50). What quantities would dictate a higher discount? Also, is there anything to look out for when dealing with online retailers?

Basically I'm looking to understand the established supply chain a little better before jumping in. Any basic info would be much appreciated

 

[Anonymous]

Most independent pet stores buy their dry good from distributors. Some of the higher end stuff (lights, skimmers, etc) are purchased direct. The majority of the stuff, (tanks, suuplements, salt, gravel, etc) are purchased through a regional distributor.

 

[Fishbowlz]

Do online retailers also buy solely from distributers? I have already been approached by one online store (a smaller one) and am curious to know if this common practice. Also, how would I get in touch with a regional distributor?

 

[Anonymous]

You should probably get in touch with the APPMA (American Pet Products Manufacturers Association). http://www.appma.org I'm not sure who online etailers buy from.

 

[Robwsup]

Etailers usually have to buy one step further from the manufacturer than B&M stores. For example, Euroreef won't sell directly to me, but my source for them charges me quite a bit less than their posted prices.

This allows me to make a little bit of cash, but I don't get as good of a deal as a true B&M store, which could buy from Euroreef directly. B&M stores are really what carry the average hobbyist, and interest new people in the hobby, so it's fair.