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Forum nameBiz Ideas
Topic subjectRE: Thoughts on Custom Designed/DIY Wedding Invitation Business?
Topic URLhttps://www.businessownersideacafe.com/forums/dcboard.php?az=show_topic&forum=103&topic_id=2216&mesg_id=2232
2232, RE: Thoughts on Custom Designed/DIY Wedding Invitation Business?
Posted by holibyte, Fri Mar-14-08 07:54 AM
I don't know about what would be considered acceptable in terms of commission rate for what you're looking to do in particular but my suggestions would be first to determine your hard costs, figure out a basic reasonable markup (not what you really want, just what you could live with). Then when you approach the retailers be prepared to offer them a commission up to the point you hit your bottom price point.

So say for example a box of DIY cards costs you $5 to manufacture. We'll say a basic profit margin for you should be about $2.50 per box (it's a small margin but remember...this is just what you could accept at a bare minimum). So say $7.50 is your minimum sellable price.

Now if MSRP for a box of these cards is $19.95 then your max % commission to the retailer should be about 60%. Whether that's a fair number or too high/low will depend on you and the stores you approach.

Of course if the MSRP is even higher or your margins are better than you have a lot more flexibility with the commission structures you can offer.

The important thing before you start negotiating is know your absolutely bottom rate and then negotiate in your favour above that. You don't want to be trying to do calculations on the fly during a negotiation.

I'm positive I can give you a hand finding some business up here. Contact me at craig@holibyte.com and we can talk further.