Growing a brand vs protecting your retailers ? Advice needed!!

[Lazarus]

OK, I have a dilemma here I could really use some advice with. I suppose there are worse problems to have, but here goes. Recently a retailer started carrying one of my syrup products in a small town nearby. This town has a very charming antique / gift district, maybe just a couple of blocks long. The bottle she is carrying is a new one we're producing, a custom etched state bottle that we make ourselves. The design has proven popular in our area, especially in gift shops.

I've had the relationship with this retailer a few months. At one point when I was making a delivery she commented that she'd really like to stay exclusive to the sales of that bottle for that area (meaning I believe that small district of shops). She didn't want to carry the same things everyone else did. She said at least she'd want to know if anyone else nearby was going to carry it.

I didn't really say anything at the time, just acknowledged her concern. I certainly didn't promise anything. At the time, she was the only one anyway so that wasn't something I needed to worry about.

Of course, it didn't last long. A retailer just a few shops away around the corner called and left me a message today and they want to carry it too. Slightly different kind of shop, more of an upscale cottage foods boutique vs. a gift shop, but still within the same block.

So what do you think? Do I have a responsibility to protect my retailers? I don't really want to be in the middle between all these people directing traffic. I wouldn't mind letting the first retailer know, but should I do more than that, like not allow another retailer a few shops down to sell it either?

I should note, retailer #1 sells it at a significantly higher price than my normal retail. It's easier when she's got no competition. There's a ton of labor in the bottle, so my wholesale price isn't fantastic on those, and I'm generally ambivalent if they can get more to help them profit a bit more.

Any advice much appreciated. I have to call retailer #2 back tomorrow ....

[Moser's Maple]

laz,
since you are etching the bottle yourselves would it be possible to do a different variation for the other retailer. this way both retailers would have a custom etched bottle that is exclusive to their shop, plus they are both selling your syrup

[tuckermtn]

Jake beat me to it - do a different bottle and/or etching for second retailer...

[K.I. Joe]

thats what I would suggest also

[mellondome]

Make it an exclusive series... you may be able to get people to buy at each location to complete a set.

[Big_Eddy]

If there was no contract (written or verbal) with the original vendor, then you should be free to do whatever best suits your needs. Of course, if you tick off the original vendor you might lose those sales.

Marketing 101 always includes a supply and demand discussion. Everyone has it, price goes down. Only one source - charge a premium. Your challenge is to decide whether you want to increase the vendors with YOUR product and thereby potentially devalue it, or risk the second vendor finding a second syrup producer who will copy / compete against you and reduce market share.

I love the series idea above - offer a custom product for each vendor - charge a wholesale premium to each of them for their customization, and you still keep 100% of the syrup business. If you do that - I'd suggest a written agreement that documents the fact that each design is exclusive to the vendor, and in exchange they won't source syrup from other producers and they each agree to a minimum selling price (defined by you) so they aren't trying to undercut each other.

[Lazarus]

Y'all are making a lot of work for me.

I do love the idea of a collectible set though. That is a great idea! And it would probably make everyone happy.
Thanks for the unanimous suggestion.

[Tor Haxson]

My advice is simple business advice. Actually I just have a bunch of questions that I would think about in this situation. Considering the answers you have to these questions might put the situation in better light and make things more clear. I just had my coffee so I might ramble

(Disclaimer, I have never run a successful business, but I have participated in many )

You have a bird in the hand scenario. A paying happy customer.

How significant is the happy paying customer to your business ?

If she is significant this year, how significant is she likely to be in future years ?

Are you growing or transforming in any way that would make her share of sales less significant in the future? Moving towards wholesale, expanding, quitting, putting everything into maple vinegar or something else that would be a big change?

Use the answer to those questions to assess her value to you.

Then you have the bird in the bush scenario, the new request to handle your product.

With two folks selling your product will that lead to an increase in sales overall? It may not, I know some antique blocks, little shop districts and all the shoppers park a car and most visit every shop. Out of 1,000 visitors to the shops most of them will see the product if it is on 1 shop. Adding a second shop might not increase number of customers that see your product.

I would imagine that the customer you have, that gets your product into that district is more significant than the new customer. Mostly in terms of total sales.

Without over-thinking this any more than I already have.

Giving a perk of exclusive item to one customer is a nice favor you could do to the customer, in return perhaps you could ask her to only sell your maple products and no others for some period of time. She is asking you to help her gain a competitive edge, perhaps she can return the favor.


--
Tor

[twitch]

I think you should do what you want but don't let the second person find another supplier i would tic off the first seller before I let the second one find another supplier. But anyway would love to see one of these bottles are you doing it with a small sand blaster? have been thinking of making my own and since you are long ways away we would not be competing lol !

[Lazarus]

Actually it is a Silhouette cutter for the stencils, a fair amount of design experience in Illustrator, and glass etching compound. Make no mistake these are a pain in the a** to make and take a fair amount of time. Once proven on a design I move from a chemical etch to a laser etcher. I do a lot of design and I'm always changing things, so I'm looking to maybe do the laser myself. Currently pricing machines. Here's an example. The star is part of our logo (click on thumbnail):
20141019_142546_Richtone(HDR).jpg

But i have some other farm themes too.