selling to food company

[bison1973]

I was contacted by a food company about buying syrup. They would use the syrup in the products they make. They want to buy it in 5 gallon jugs. They possibly would buy 100 gallons at a time and do this every two weeks.

My questions...

How would you price this? Is it just strickly bulk sale price (around here the packers sell in bulk at $3.10/lb)? If so, do you add to that the price of the container (ex. $3.10/lb+container)?

Or do you mark it up a little more considering your time in handling it (bottling, etc)?

I'd have to buy syrup to do this... the same as what the packers are doing. But buying in bulk and then reselling at a markup of about .50/lb like they do doesn't seem like much of a profit? But if tht's the way it's done...

Have you done similar sales or are familiar with the process? Your thoughts, opinions please.

[Potters3]

Do what ever you have to do to get the contract. $.50/lb isn't a lot for what you have to buy and resell, but $3.10 for what you can make and sell is great. I would much rather have a few big customers to sell direct to then have to sell my stuff to a packer.

Try to work a deal where you get the 5 gal containers back to refill.
Some kind of contract of quantities they will buy. The guy a boiled for in the past had several restaurants request 5gals and said they would want 1 a week. We packed out a bunch of them and they only ended up buying a few. After sitting on for a year he has now sold them to the packing house.

[Haynes Forest Products]

It all sounds great until you break it down. first you will need to buy in bulk containers and repack in 5 gallon buckets so you will need the equipment to cold pack or go broke reheating. Syrup is generaly sold yes by the gallon but big packers buy and sell by the pound. you will need to test all syrup coming and going. Then you will need a way to clean the 5 gallon containers between uses because you cant control what they do between uses. Handling 100-5 gallon jugs every week will require pallets and shrink wrap plus forklift. Then you will need a constant supply of syrup and a way of handling the big drums and a way to blend it for consistency to the end user. Oh yea and miss 1 delivery date and they will go some were else. But hey think big and go for it.

[3rdgen.maple]

Contact a packer and let them do the work and sit back and reap the profits. The packer bills you and you bill the costomer. But do some research on them first and make sure they pay their bills. Being in business for myself in this economy its very very easy to get the work and sometimes almost impossible to get the money. There just might be a hidden reason why they contacted you, they might have already burnt some bridges, so find out first before you owe a packer alot of money.

[802maple]

Do as 3rdgen said first, always do your homework on the customer of that size first. I used to have a landscaping business and I learned fast to not take lawn mowing accounts that called in late June and snowplowing accounts that came in mid winter.

If there isn't any info about them request that the first shipment is payed for before they get the second shipment. If they aren't able to sign into something like that then they aren't worth the hassle for the small amount you will be making on the syrup that you will be purchasing for resale. You need to make atleast 25 % on your investment with the additional handling you will be doing by packing into 5 gallon containers

[maple2]

you could also get up to 5% shrinkage per barrel

[bison1973]

First of all thanks for the responses!

A lot of the "obstacles" pointed out aren't so big to me. I've bought, reheated, and sold syrup before in 5 gallon jugs for retail and restraunt use. I've also shipped shipped it on pallets before too but just not this amout and frequency.

I don't have one of those barrell carts that tips the barrel on its side so the syrup can be poured out. Anyone know where you would purchase one of these? I might try to buy syrup for a while and then turn to the packer when i have to.

So, 3rdgen... packers here buy bulk for $2.60/lb and sell bulk for $3.10/lb. Your'e saying they'll charge me the $3.10 rate and then I mark it up beyond that like 802maple suggested (25% at least)?

So say a packer had this account. Would they just sell to this food company at $3.10 or would they too sell at a markup beyond that to account for the additional handling and filling containers? Just want to know what I'd be up against in pricing this.

[3rdgen.maple]

Not sure Bison. Contact a packer and ask them what they would charge for the quantity your looking for. I would assume that if they themselves had to repack their syrup into 5 gallon jugs to resell their price would be higher for the extra hndling than the 3.10. I would think that you could work a deal unless the packers demand is so high they dont need your sales and would charge regular rates. Supply and demand. Repacking it and charging for your handling time is where you would get your money from. 802 could answer better I think, but would there not be a deposit required to use a packers drums? I cannot fathom that they would not charge for the drums the syrup is in on good faith. Make the call.

[bison1973]

3rdgen,

I actually called the local maple packer on fri. Waiting for a call back over the long weekend. In the meantime i don't want to lose a chance at these sales. I definitely agree with what youre getting at... have the packer do the work at their bulk rate and then resell to the food company at in the least a 25% markup like 802 said. That would be the easiest way. I could make more money by buying bulk from other producers myself but may also use up a lot of time and energy trying to constantly find bulk syrup.

[maple flats]

Contact a packer and let them do the work and sit back and reap the profits. The packer bills you and you bill the costomer. But do some research on them first and make sure they pay their bills. Being in business for myself in this economy its very very easy to get the work and sometimes almost impossible to get the money. There just might be a hidden reason why they contacted you, they might have already burnt some bridges, so find out first before you owe a packer alot of money.

Find out how to join D&B, (Dunn & Bradstreet). They rate all member businesses. If they have a good D&B rating, go for it using a packer. If they don't, run as fast as you can.

[Daryl]

If you have a real friendly banker, they may give a thumb up or down on working with that company. Mine has done that in the past.

[802maple]

What Mapleflats said is quite accurate about D&B.
Finding syrup isn't all that hard, I did it for 20 plus years, I even found some good amounts out your way, by very trustworthy and straight shooting sugarmakers and all I did was make a few phone calls. All you need to do is come on here with a price that you can afford that is higher then the packers are paying and treat your sugarmakers right. I will guarantee that you will get as much syrup as you want. If you buy from packers they will eventually find your customer and under sell you because they will be able to sell to them at the same price they are selling to you. The only way you will survive is cut them out of the middle, plain and simple.

[3rdgen.maple]

Like 802 said, my biggest concern would be investing all my time and getting all excited and start selling this place some syrup and then whammmm your packer undercuts you and your done. No compete clause look into it. Probably never get one signed but worth a try.

[Thad Blaisdell]

If you are going to be repacking that amount of syrup, maybe you should really think about gallons, HG's, qts, etc... to sell in a website and local. Sell everything you can.

[bison1973]

I already do sell in the smaller containers. And I do have a website.

I did a little reasearch and found what others are selling wholesale at. About the only way to make any money selling wholesale (aside from making the syrup yourself) is to buy bulk form the producer. If I were to buy bulk from a packer and them mark that up I'd have to price myself to high to compete. You can make some money this way but you have to do it on volume.

[220 maple]

Get a barrel Pump, that's what my friend who packs syrup uses. I believe he repacks 1500 gallons a month. You will need a barrel hand cart to move barrels!

Mark 220 Maple

[Haynes Forest Products]

I think its time for you to become the "PACKER" and start buying at the wholesale price and eliminate the middleman.

[SapZilla]

I wouldn't be too worried about a packer cutting you out of the deal. You just advertised on a worldwide website that one single buyer is asking for a very large quantity of syrup. Don't you think that someone who is already set to satisfy their demand has read this thread? Do you really think that it will be that hard for that person to locate that buyer? Consider yourself cut out when you started this thread.

[bison1973]

I don't know about that sapzilla,

you seem to have the cyrstal ball... tell me who I'm dealing with.

If you can do that then many people will know.

[220 maple]

Bison1973,

I agree somewhat with sapzilla, onetime the guy I sell my wholesale syrup to actually showed me his contract where he delivered 200 gallons of syrup every three weeks. I quickly pointed out to him not to do that again, I didn't want the contract, but I bet there are others that would have undercut him in a heartbeat. He is a very trusting person. Most likely the person that approached you trusts you to be fair and competive. Also they may have been turned down somewhere else. My friend that packs syrup turned down Kroger Foods and Cisco. Doesn't want the hassel of hiring help. The Kroger contract alone required supplying 32 states of Kroger Grocery stores. He said Cisco distributes to 50 states. Guys like Bruce and Dave can handle that.

Mark 220 Maple

[802maple]

Bison1973,

I agree somewhat with sapzilla, onetime the guy I sell my wholesale syrup to actually showed me his contract where he delivered 200 gallons of syrup every three weeks. I quickly pointed out to him not to do that again, I didn't want the contract, but I bet there are others that would have undercut him in a heartbeat. He is a very trusting person. Most likely the person that approached you trusts you to be fair and competive. Also they may have been turned down somewhere else. My friend that packs syrup turned down Kroger Foods and Cisco. Doesn't want the hassel of hiring help. The Kroger contract alone required supplying 32 states of Kroger Grocery stores. He said Cisco distributes to 50 states. Guys like Bruce and Dave can handle that.

Mark 220 Maple

It is the food safety audits from stores like Krogers that are the hardest things to get by.

[Haynes Forest Products]

And miss one delivery date and your out along with your $25,000.00 slotting fee