Selling syrup through a local store front?

Hi all, I was approached by the owner of a small store in my town about the possibility of selling our syrup. Currently, we have just done small batches that we grade and sell (or just giveaway, ha) to friends / family but my guess is moving to a retail location would open up a very different set of requirements.

Can anyone point to a good guide on the subject or speak to whether it's worth the hassle? I have been mulling a (relatively) big expansion at some point since buying a new property and this would probably be part of the plan. I doubt I'd ever go over a couple hundred taps but I don't want to take the fun out of it...

So, looking for a split of practical advice and then just general opinions on the impact of sales on the process overall.

For me, it is not a hassle. There are a number of things to consider. How much do they anticipate they will sell per month/year and do you make enough to keep them supplied? If not, do you know where you can get the amount and quality of extra syrup needed? Your quality control needs to be spot on. You do not want your syrup to come back because of grading, density, flavor, etc. Not good for you or the store. Just a few things to think about to get you started. I'm sure others will have more thoughts and suggestions.

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Originally Posted by bill m

For me, it is not a hassle. There are a number of things to consider. How much do they anticipate they will sell per month/year and do you make enough to keep them supplied? If not, do you know where you can get the amount and quality of extra syrup needed? Your quality control needs to be spot on. You do not want your syrup to come back because of grading, density, flavor, etc. Not good for you or the store. Just a few things to think about to get you started. I'm sure others will have more thoughts and suggestions.

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Thanks, that's helpful to know your experience - I look forward to some day looking back and saying I've been making syrup for over 40 years, too!

I'm also hoping someone can speak to the regulatory aspect(s)...am I required to have certain equipment inspected or approved before selling via retail? I know it's a little different if you sell from your own residence, at least in NY.

You may want to check with your respective State's regulations for selling syrup. In Michigan they have certain labeling requirements as well as meeting specific food safety standards, even if you are not licensed. Good luck with your operation.
Gary

Contact New York State Maple Producers at 315-877-5795 or check them out on line.

Did you make the move? How has it gone for you?
I started selling thru a local storefront about 9 years ago. Every year has gotten way better, and a bonus is tht the store has moved to a bigger/better location 2 times. When I started with them, they were in an old 2 room schoolhouse, they then moved to an old Home Center (about 14,000SF) that had gone out of business , lost mostly to Lowes. Now, last June they moved to a shopping plaza with a huge parking lot and now have almost 50,000SF. They quickly filled that space and my sales have surged along with it. My sales have grown so much that 2 mos ago I cancelled my only online advertising, one that cost me $180 a year. I'm as busy as I can handle (I'm 75 now) I may eventually quit my website, have not yet decided. I guess my biggest issue would be is if the one store I'm in were to go belly up, I would then wish I hadn't "put all of my eggs in one basket".
To sell my syrup there I have every container labeled with: Pure New York State Maple Syrup, Grade, Size, Price and my name and address and my website and email. It is rather easy, but you must restock and straighten up the display as needed. The store I'm in sends a sales report every day about 15-30 minutes after closing, that helps a lot. On my price tags I also have an item number, that number tells me the grade of the syrup and the price tells me the size. That way I know what I need to take in to restock, in fact, my youngest daughter (a mother of 4) has done it for me since just before my original surgery date was postponed.

We sell some syrup through a store front for a year now. They are great people and so far it's worked out well. Good luck!

We were approached by a farm store directly across the road. It's our first year officially selling with a name and not just peddling on Facebook. I'm unsure of what our numbers will be and makes me hesitant to say we can keep them stocked. Our first maple weekend id say was a success with over 200 people each day. So our name is getting out there. I've had sales through word of mouth since maple weekend and even repeat customers. I offered wholesale pricing to them at somewhere around 75/25% split. They sent me their current suppliers numbers and are of course below ours. I'm thinking of walking away and having our farm stand set up where our customers can buy directly from us ( I already offer hours with pickup or local delivery and will soon do shipping) with perhaps new customers just driving to his farm. I'm I unreasonable with the split? I feel like 50% is crazy, especially when we are new and naively thinking we will be able to sell all on our own.

A 50-50 split in retail is fairly standard. I’m on the fence myself about approaching local vendors. So far, I’ve been able to move most if not all of my stock within a year. If you can sell it on your own, go for it. Especially if you have a market across the street that’s already creating its own draw. Customers would prefer to get it from the source.

I’m gonna take a wild guess and say they approached you so they weren’t competing with you.

How are you defining the % split? A % of total retail sale price? Or 50/50 split of markup over the cost of goods? Typically you want to markup your retail price to be 50% over cost of goods and then take a % off of that for wholesale purchases above a certain $ threshold. These numbers can vary by size of unit (smaller bottles take more time to bottle a high number of them).

In my opinion 50/50 of retail price is way too high for them.

I sell direct to consumers and thru a very nice set of stores in Pittsburgh neighborhoods and only mark down my prices in wholesale to them at 12.5% to 15% because they bring me a set amount of sales volume of specific sized bottles. At a 12.5% discount they are getting a 14.3% ROI. At 15% they make 17.7% ROI. In fact, the neighborhoods they are in actually allow them to sell my syrup at prices that are higher than my direct to consumer price so they are making quite a bit more actually. Location matters and I am very thankful for our partnership. But what storefront wouldn't love a return of 15 to 17% on their money??? Good luck getting that in the market.

I recommend calculating out what it really costs to make a gallon of syrup. Do an "all in" cost of goods calculation that accounts for depreciated equipment expense, fuel, containers, consumables like filters and DE, labels, licensing costs, insurance, websites, and labor. Yes firewood is "free" if you have it around your property.... but you still spend time cutting, splitting, stacking it. Calculating your labor contributions, even at a low rate of $15/hr will be eye opening. Include time to hang tubing buckets and take it all down and clean it.

#1 I think most of us would raise our prices if we saw what it truely cost us and #2 we would be in a better position to negotiate wholesale prices to retailers and explain to them the basis of our pricing and discounts.

Best of luck in your decision here but do not settle for something that doesn't make financial sense. I know most of us run this as a hobby and pseudo business ... but business should generate profit. Don't give that all away just to move your product.

Retail in general is you buy a widget for one dollar and you sell it for two. I was the owner/operator of restaurants for over 20 years and if you were purchasing an item and turning around and selling it say, at a sandwich shop selling a bag of chips. There’s a much higher profit margin on the sandwich they prepared from scratch but the bag of chips is sold for twice what was paid for it.

You said they showed you your competitors pricing? Where was that landing?


I have the option of expanding to be able to take on other vendors if I wanted to produce more and it made sense financially.

Some of our prices were 2 dollars off others were like 6. Varied by product. Ours is bottled in glass the competition had only jugs.

Yes we were approached. They do create heavy traffic so I think we'd have a good chance selling everything from a farm stand. We had a lot of big expenses this year due to expansion so I have a hard time letting someone walk away with 30% of our perspective profit.

The competition is located in a super rural location where not much traffic is and their retail price is lower to start. They need the wholesale or they wouldn't be able to sell what they have so they are more in a bind to move products. Our retail prices are similar to what they sell them for in the store. We are in Saratoga county and can kind of demand a higher price because people pay it.

I just wanted to make sure I wasn't being crazy. And I dont want to lock is into something I can't back out of.

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Originally Posted by M&M Maple Grove

Retail in general is you buy a widget for one dollar and you sell it for two. I was the owner/operator of restaurants for over 20 years and if you were purchasing an item and turning around and selling it say, at a sandwich shop selling a bag of chips. There’s a much higher profit margin on the sandwich they prepared from scratch but the bag of chips is sold for twice what was paid for it.

You said they showed you your competitors pricing? Where was that landing?


I have the option of expanding to be able to take on other vendors if I wanted to produce more and it made sense financially.

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It seems to me that bulk prices provide a more uniform benchmark on wholesale market pricing. For example, let's look at a 1/2 gallon and say that this year's bulk price will be $2.40/pound:

Bulk Syrup = $13.20
Container= $2.35 (plastic jug)
Labor to Fill Container = $ 2.00 (varies)
Handling/Delivery = $2.00 (varies)
15% Overhead & Profit on costs = $ 2.93
Total = $22.48 per 1/2 gal

Therefore, one should expect a minimum of about $22.50 per 1/2 gal at a wholesale rate. If your retail rate is $30 then you would give a 25% discount off and the retailer would sell for $30, or even more. My sense is that this analysis is very reasonable since the numbers between bulk, wholesale, and retail seem to fall where I'd expect.

For our business, we do about 15% of our syrup as direct retail (which is easy without a significant effort) and the remaining as bulk sales. It makes more sense for us to skip the extra packaging and marketing costs for that 85% we sell in bulk even at a lower revenue level.

Ken

Everyone’s costs for production are different and all of the expenses that have been mentioned are reasonable. I have no experience bringing Maple Syrup to market however, plenty in retail. I can only speak from that side of the spectrum and due to all of the overhead a retail store indoors, A 100% markup is typical.

I’m curious myself what producers are getting in local markets and if they were able to do better than that.

The typical wholesale for maple in retail size containers runs from the low side at 10% up to 20% on the high side. Typical markup from their wholesale price is from 25% up to 35%. This is for pure maple syrup, not clothing, hardware or anything else you buy from a retail store.

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Originally Posted by bill m

The typical wholesale for maple in retail size containers runs from the low side at 10% up to 20% on the high side. Typical markup from their wholesale price is from 25% up to 35%. This is for pure maple syrup, not clothing, hardware or anything else you buy from a retail store.

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I agree with that range.

Thanks for the input. OK, so I can see how those numbers can work for everyone. If you’re selling at 25% off of your typical retail price, the retailer is most likely, bumping it up to hit their 50% profit margin. They may go down to a 35% profit margin for their own reasons. I can see that on one of the high-end glass bottles. Typically however, the rules apply to everything that sits on the shelves equally.

Although the 3rd edition of the maple manual isn't yet out, the spreadsheets (Excel format) from the economics chapter are already available at: https://mapleresearch.org/pub/econom...le-production/

There is also a lot of information and tools from UVM Extension at https://www.uvm.edu/extension/agricu...le/bizmodules/ and from Cornell at https://blogs.cornell.edu/cornellmap...aple-business/