Friday, July 8, 2011
There are a few things that I have learned about trying to partner with a distributor, this is split into two sections the first section is about you and your business and the second about selecting your distributor.
You and your business
Selling your goods to someone that is going to invest time and effort into selling your product requires your own business to be ready to be in this space. For my business, the direction I decided to take is (you will have to work out the steps for your own industry):
1) Develop a great product that people enjoy eating
2) Do market research with people you do not know and get written feedback; my method for this is to sponsor networking events in the local chambers or business networking groups
3) Get accreditation; in the food industry that would be HACCP (Food safety accreditation)
4) Get recognition; I sponsored a Food industry dinner and provided an entree for the function. This way of getting recognition really boosts your presence in the industry and it is also a good opportunity to talk about something to someone you have never met
5) Join networking groups! network, network, network don't hunt people down in a networking group but just chit chat, my favorite topic is your business and what you do. This will make you talk less and listen more which is what I strive for.
To do business with other businesses you must first do business with yourself. Are you going to do business with you?
Say what you do and do what you say, reliability and beyond the call of duty is an everyday occurrence in small business, it is just what we have to do to survive. In saying this you must also be careful who you do business with, not all clients are worth keeping if a client doesn't pay their bills and is consistently losing their invoices or making promises that do not materialise it is time to review that relationship.
Communicate with your customers and if they don't communicate with you find a way to talk to them. Understand that people are always busy and so are you but if you do not communicate there is no direction there is no soul to the business that you are doing with the other party, so when a cheaper product comes along you are at a high risk of losing that customer.
Pricing is very important, but I can't really comment on it as I do not fully understand the whole pricing structure just as yet. I will write more on pricing after I have a deeper understanding of how this works.
Choosing a distributor
It is important to meet with as many distributors as possible. Being a small business it may be a disadvantage for you to work with a huge distributor. Try your best to find the medium to small sized family owned distributors. In the meetings try to determine if you can feel these things:
2) Time to think (for the business owners)
3) Interest in your product
4) Industry reputation (client base)
5) Same goals and sharing experiences seeing eye to eye
I believe that just only by having the passion for the business you will already be miles ahead of a competitor that do not have the same passion.
All businesses is constantly busy if the business owner works in the business and does not invest time to manage the business then that business will have a lesser chance of success. If the distributors have time to calmly discuss your requirements share a few jokes and see what you have in mind; that would indicate that the business managed in an orderly way. This will mean that will be more time to devote on marketing and selling goods as opposed to fixing problems and dealing with complaints.
I am not in favor of exclusivity, as it provides too much power to a business that may cause issues in the future. As a small business you can compromise where you place conditions with the distributor where the exclusivity is not a contract but rather a gentleman's agreement. Although I am not in favor I will still give it a go when your hosts are presenting the right case. Never say never.
Summing it all up
So to sum up get your own business up to scratch make your business worthwhile to do business with. Once you have the foundations for a good business then meet with a few distributors and make sure they call you back and work with you.
Wednesday, July 6, 2011
Well Mr. Blog last night I stayed up pretty late trying to figure out how it will all tie in how a budget range would allow me to sell at a cheaper price and still make the same money. I have spent all these years to develop and improve recipes to a point where I feel it is of a quality that if I were to purchase something from the supermarket and took it home I would want that quality and taste.
The question I asked myself really is why should I change that recipe again? does it make any sense to reduce the quality just to compete with imports and the short answer is I will never be able to compete with imports price wise. It is an unachievable goal. Then after realising this I have decided:
It is better to sell my product with the best quality at the best price rather than to try to sell a lower quality product at the highest price. At least then I have a competitive advantage.
So this is what I will do.
Monday, July 4, 2011
Well it is not that easy to explain, but here it is. For me to make good quality Jumplings I need to sell them at a certain price to survive, but doing this isolates a lot of the market as the price for a good product with good ingredients with good flavour is expensive. Reducing the price would ultimately mean I have to use fillers.
Is this a good idea Roy?
Well I am not sure, but I really would like to have a product where everyone can afford and enjoy. It is a good idea in that I will achieve my goals it is a bad idea if the quality declines or it confuses people.
In effect I have to add a "filler" into the dumplings so that the "filler" will fill up about to about 50% of the dumpling and maintain the flavour and reduce the price by about 30%. Can I make a pork dumpling with essentially 15 - 18% of pork in the filling?
When a question is answered by a question instantly you know you will have to do more research. I think at this stage if we target at a lower retail price like $8-$9 for a retail pack this might play a part in the solution.
Currently I have seen two other companies that make this product for retail:
1) Coles gyoza 400g (prawn or veg) - $7 - lots of starch and very empty (Imported from Thailand)
2) Hakkar foods gyoza 400g (pork) - $4.80 - Lots of fat very very greasy (Manufactured in Australia)
My products are about 3 times more expensive than the cheapest one. I am also just under the 2 times mark for the Coles imported product.
What are you going to do about it?
Lets go back to my original goals, my aim is to have a healthy, tasty, easy to cook product that ALL Australians can enjoy. I have put ALL in capitals because right now I know I am not in the ALL market primarily due to my pricing. I am confident that everyone that tastes the product will like it and I know I am priced out of many of those people that want to buy it.
My head is telling me to make a Jumpling and call it something else and increase the amount of vegetables and oats in the mix to increase the quantity of Jumplings per batch. I do not wish to fill the Jumplings with fillers that do not contribute to the health of the customers.
One good problem with doing this is that eventually I can call this Jumplings oats plus and market it as a health product which can also fetch high prices but that is not my goal my current goal is to make it affordable to ALL Australians even if it is for one product I am guessing it will be chicken at the moment.
What are the next steps Roy?
Well the next step is to make a batch of Jumplings oats plus chicken and give it a try to see if we can increase the quantity per batch.
When are you going to do this Roy?
I think I will work on this sometime this week and have an answer by the end of next week.
What is your problem Roy?
I need to implement HACCP but not pay 4 arms and 8 legs for it.
What do you have to consider when you implement HACCP?
Well there are a lot of things but essentially you will need:
1) Training - find an implement HACCP course and get that certificate ($700 - July 2011)
2) Training - find an Food Auditing course and get that certificate ($1400 - July 2011)
3) Write your HACCP document - take a minimalist approach, only record what you have to don't try to have a full blown clean house in your premises
4) Use a financial dairy to record your daily cleaning, checking, recording deliveries
5) Since you have to keep your invoices use it to keep temperature records (especially for chilled deliveries)
6) Keep your premises clean and simple, take out things you don't need or hire a storage and put all those things you don't use in it
7) Look for an Auditor that is interstate that visits once a year
8) Book in an Audit, commit to the timeline it saves you from delaying
Ok so now you know the approximate steps, how long does this whole process take? It took me about 3 weeks of work on the document at 1 to 2 hours per night.
How much did the whole process cost you in the end in total including the audit?
$2900.00 at July 2011 WHAT!! -- I know .. my first quote for a consultant was $10000 not including the Audit!!
Temperature monitoring giving me the blues
Temperature monitoring is giving me a total headache Roy how did you solve this issue? My manual recording is very simple, every morning when I come to work I check all my fridges and freezers I then write fridge and freezer OK in my dairy. If there was an issue with one of the fridge or freezer I will write down what happened in the dairy. At the end of the day I do the same but instead of writing down fridge freezer OK I will write down AM & PM and initial. Do not record if you don't go to work..
Do you have a solution that monitors it 24 hours for my 8 fridge and freezers that costs less than $10000?
I now am investing into a new system which will cost a total of about $600 that can monitor and log and send emails. Yes I know what you are going to say no Roy it can't be done, one of those units is going to cost at least $2000 and that is for 2 probes!! When it is all up I will let you in on the secret ~ no not the Oprah secret, the temperature monitoring one.
I am also in the throws of developing a smart phone app that can help you monitor all your daily tasks so you can carry on with making money instead of worrying about record keeping. Is it going to be free? probably not but it is going to be very affordable.