product entry strategy

Piriz

Hi,

I am seeking advice surrounding a strategy I intend to use to bring my product to market.

Background: After about a year of toying with an idea I have developed an impressive brand for Dublin. I will submit my trademark application next week and I have sourced a local manufacturer who will print my design on womens tshirts and tote bags. The product aims to target both local Dubliners and tourists. I have identified a list of shops (mostly independent stores) who I aim to visit with a proposal to stock my products. If these products generate sales I will broaden the product range.

Prior to placing an order to produce a batch of these products I hope to visit these stores and show them the brand design and speak about the product I intend to offer. This will enable me to gauge the level of interest.

The tshirt will have an RRP of 20euro including VAT. I'm thinking of offering these to retailers at 10euro per tshirt ? Will this be considered a good offer to retailers? The gross profit for me is about 5euro based on batch orders of 100.

Should I try to negotiate with each individual store? i.e. would some stores take a mark up that is less than what i'm offering?

Also should I offer the first order on consignment? or only offer consignment if they are considering not placing an order?

I'm very new to this and would appreciate your advice, I have been reduced to working part time recently which frees up time to put into distribution etc.

many thanks...

Spice Girl

Have you done a start your own business course? Or if you contacted Dublin City Entreprise Board you can have an initial meeting and they would give you feedback on what support you may get. You can apply for a mentor, which might be a good starting point.

My concern would be if the store your approaching is already making their own stuff, they will know the cost of a T-shirt is a lot less the you are selling it for, so your branding would need to add enough value to justify 10 euro for a T-shirt they could probably have made and delivered for 2.50 - 3 euro.. Thats going to be your first hurdle.

Generally your numbers are fine and margins work for a retailer at 50% and 50% margin for yourself at 5 euro too, but I dont know this specific industry selling t-shirts and tote's other then manufacturing costs which are really very cheap.

If you run into a brick wall over this you should get your product made in India or a neighbouring country and be selling it for 6 euro to the stores, taking a 3 euro profit from that. Then you can offer a much bigger margin to the retailer and make it a whole lot more attractive. If they are selling similar stuff they are making themselves and taking 60-70% margin, they wont want your shirt cannibalising those sales and better margins.

jimmii

If its €10 including VAT to the retailer that is the standard sort of mark up for most places. As Rifle says though the t-shirt will need to be pretty special whether it be the quality of the design or the quality of the t-shirt material to justify the cost as no one likes that €2 t-shirt feel! It sounds like you are very confident on your design i'm very interested to see it! What sort of numbers are you going to be doing on the totes?

lucky john

Maybe you could consider a different route to market. Printing 100 items locally at a time and trying to sell them from shop to shop will be hard work for 5euro a time. It seems to me the design is your strength. Have you looked into licencing you design to an established company(s) and make your profit on royalties. It dramatically reduces your risk and especially your costs. You could then concentrate on more designs and base your business as a designer rather than a tshirt wholesaler.

The second option is to sell your tshirts on line yourself. There must be thousands of dubs all over the world you would then have access to. Tshirts are small and light so would lend themselves very well to delivery anywhere at a reasonable price. RRP could be 15 euro + delivery so you have a better margin.

Piriz

Deleted User wrote: »

My concern would be if the store your approaching is already making their own stuff, they will know the cost of a T-shirt is a lot less the you are selling it for, so your branding would need to add enough value to justify 10 euro for a T-shirt they could probably have made and delivered for 2.50 - 3 euro.. Thats going to be your first hurdle.

Generally your numbers are fine and margins work for a retailer at 50% and 50% margin for yourself at 5 euro too, but I dont know this specific industry selling t-shirts and tote's other then manufacturing costs which are really very cheap.

If you run into a brick wall over this you should get your product made in India or a neighbouring country and be selling it for 6 euro to the stores, taking a 3 euro profit from that. Then you can offer a much bigger margin to the retailer and make it a whole lot more attractive. If they are selling similar stuff they are making themselves and taking 60-70% margin, they wont want your shirt cannibalising those sales and better margins.

Hi I appreciate the points you make, I considered sourcing manufacturing in China etc. but I find the whole thing is very risky, minimum quantities are generally 1000 to get a decent unit price and I have read stories of shoddy quality and people being out right ripped off. Perhaps if i can build a proven sales record I can invest in larger quantities and source from cheaper countries etc. I'll see what I can learn in the coming months. If anyone knows of foreign reputable textile/printing company etc. i'd be interested to hear...

jimmii wrote: »

If its €10 including VAT to the retailer that is the standard sort of mark up for most places. As Rifle says though the t-shirt will need to be pretty special whether it be the quality of the design or the quality of the t-shirt material to justify the cost as no one likes that €2 t-shirt feel! It sounds like you are very confident on your design i'm very interested to see it! What sort of numbers are you going to be doing on the totes?

Hi jimmii, you may have identified an issue in my strategy, while I am a sole trader at present my accountant advised I do not need to become VAT registered until I reach a certain turnover/income threshold. So I hope to pass on the VAT to the retailer i.e. retailer pays 23% VAT of 20euro retail price leaving the retailer with a E5.40 profit per tshirt after a 10euro investment.
Is there a problem with the above?

lucky john wrote: »

Maybe you could consider a different route to market. Printing 100 items locally at a time and trying to sell them from shop to shop will be hard work for 5euro a time. It seems to me the design is your strength. Have you looked into licencing you design to an established company(s) and make your profit on royalties. It dramatically reduces your risk and especially your costs. You could then concentrate on more designs and base your business as a designer rather than a tshirt wholesaler.

The second option is to sell your tshirts on line yourself. There must be thousands of dubs all over the world you would then have access to. Tshirts are small and light so would lend themselves very well to delivery anywhere at a reasonable price. RRP could be 15 euro + delivery so you have a better margin.

Hi lucky john, yes i feel the design is the strength of this product. However I am using decent quality textile/product/processes etc. I intend to begin with 100 items and try to source retailers to stock the product. If this initial approach works and retailers sell these products following orders will be a minimum of 10 (perhaps increasing to 20 etc. if the product is selling well). Also if the product is generating sales and repeat orders I will increase my batch quantities from the manufacturer thus reducing the unit price.
If the product proves very popular with sales then this enables me to place a value on the brand. At this point it might be possible to licence the brand. However, I feel this would be difficult and potentially expensive to negotiate; legal, accountancy fees etc. i dont feel ready for this at the moment but I will be considering opportunities for this in the future perhaps.

The website idea is possible, like i said in the first post if the initial products sell well then i will aim to broaden the product range and different routes to market.

Perhaps I should contact Dublin City Enterprise Board. I looked at their website before and they seemed to be offering classes at a cost, at times when I work and in subjects that im not particularly interested in..

Thanks for the input everyone..

Jimmii i'll be on to you soon with the design..thanks

jimmii

Yeh that makes it pretty tight for retailers then. Typically the retail price is 2.5x the wholesale price. I am hoping the design is as good as you think it is then €25 a t-shirt will be no problem! One thing we see is that although the quality of the product is important (people don't want to buy something that don't think is going to last 6 months!) design is king.

Piriz

furthermore, has anyone got advice on offering products on consignment?

OU812

I'm curious as to why you're introducing a brand for Dublin. Dublin already has an official brand & several variations thereof. If you're introducing an unofficial brand, there's no way you'll be able to charge a premium for it, irrespective of the quality of the materials.

Besides, O'Carrolls pretty much has this market sewn up. They're EVERYWHERE. They've got all the official designs as well as several unofficial ones, including their own branded (& I presume sourced) ones. I bought a very heavy cotton Tshirt with embroidered logo for €12 last month. The quality is superb, it's almost a winter weight tshirt. It'd be too heavy for summer.

Piriz

OU812 wrote: »

I'm curious as to why you're introducing a brand for Dublin. Dublin already has an official brand & several variations thereof. If you're introducing an unofficial brand, there's no way you'll be able to charge a premium for it, irrespective of the quality of the materials.

Besides, O'Carrolls pretty much has this market sewn up. They're EVERYWHERE. They've got all the official designs as well as several unofficial ones, including their own branded (& I presume sourced) ones. I bought a very heavy cotton Tshirt with embroidered logo for €12 last month. The quality is superb, it's almost a winter weight tshirt. It'd be too heavy for summer.

I'm not sure of what official Dublin brand you are referring to? the Dublin City Council three castles? Dublin GAA? also im not convinced it or the several unofficial ones you mention (?) stand out..
I developed a good design of my own and i intend to bring it to market, I agree Carrolls are quite dominant in the market and fair play to them but I don't think their designs are great unless your looking for something paddywhackery..nevertheless im sure they have some things that are great quality and clearly they are successful.

However, this does not deter me nor should it..i'm introducing a brand into the market, i've protected this brand as i think it has potential. I do not see Carrolls or their products as a barrier to my plans.

shankespony

Look at online, direct to consumer and paid immediately!!!

OU812

Piriz wrote: »

I'm not sure of what official Dublin brand you are referring to? the Dublin City Council three castles? Dublin GAA? also im not convinced it or the several unofficial ones you mention (?) stand out..
I developed a good design of my own and i intend to bring it to market, I agree Carrolls are quite dominant in the market and fair play to them but I don't think their designs are great unless your looking for something paddywhackery..nevertheless im sure they have some things that are great quality and clearly they are successful.

However, this does not deter me nor should it..i'm introducing a brand into the market, i've protected this brand as i think it has potential. I do not see Carrolls or their products as a barrier to my plans.

There's the Dublin city three castles, there's a single castle one, There's the Dublin skyline & there's a "fun" skyline one. They're just four official ones off the top of my head. There's also variations of them & various unofficial ones.

I'm of the opinion none of them are marketed to the fullest of their potential (the skyline is my personal favourite). Now if you can market it well enough that it becomes popular, then brilliant, but you've still got the problem that it's not the official city logo & I think this could hurt your brand.

Also, it costs a huge amount of money to push a brand & from what you've said, I don't think you've got the funds to do it.

The likes of O'Carrolls, can get very inexpensive stock because of their buying power & can afford to let it sit on the shelf because of the other products they sell.

Can you afford to supply them on consignment & let it sit there for (example) six months before getting eight of them back because they didn't sell ?

Your best route to market is to push them online which will give you a higher profit. Unfortunately to do that you've still got to market it & that costs considerable effort, time & money.

Best of luck with it if you do proceed. Would love to see what the logo is so I can be proven wrong.