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Discussion Starter · #1 ·
Anyone has any rough data about what should be an average % off the online retail price online retailer keeps if selling another vendor's merchandise?

I.e. retail price in my store is $16, S&H is $5, and order is fulfilled by the vendor, not me. What should be my interest on this deal?
 

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I.e. retail price in my store is $16, S&H is $5, and order is fulfilled by the vendor, not me. What should be my interest on this deal?
So the shirts are already printed and the vendor is storing them for you waiting for you to tell them where to ship the order?

That sounds like fulfillment and I think fufillment fees can sometimes vary depending on volume. $2-$4 per order I would think.
 

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Discussion Starter · #7 ·
Rodney said:
So the shirts are already printed and the vendor is storing them for you waiting for you to tell them where to ship the order?

That sounds like fulfillment and I think fufillment fees can sometimes vary depending on volume. $2-$4 per order I would think.
yes I am talking about fulfillment, I think I mentioned it in the initial post. Maybe not. But yes it's exactly what I am talking about.

But I don't see how $2-$4 can cover store maintenance + marketing, especially for a smaller online store.
 

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But I don't see how $2-$4 can cover store maintenance + marketing, especially for a smaller online store.
I didn't see those requirements in your original post :)

Fulfillment companies don't do marketing. They just fulfill orders that you send them. Some companies may have some way of helping merchants that use their services, but I wouldn't count on any sales coming from that. That would just be a bonus on top of the sales that you generate.

Anyone has any rough data about what should be an average % off the online retail price online retailer keeps if selling another vendor's merchandise?

I.e. retail price in my store is $16, S&H is $5, and order is fulfilled by the vendor, not me. What should be my interest on this deal?
From that I assumed that YOU were handling the store hosting and maintenance, the marketing and processing the payments. Then you just sent the order to the fulfillment company the order and they pull the printed shirt from their warehouse and ship it to your customer.

Maybe I should ask it this way: are you talking about a specific fulfillment company? All companies may have different policies and prices for what they do.
 

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Discussion Starter · #9 ·
Rodney said:
From that I assumed that YOU were handling the store hosting and maintenance, the marketing and processing the payments. Then you just sent the order to the fulfillment company the order and they pull the printed shirt from their warehouse and ship it to your customer.

Maybe I should ask it this way: are you talking about a specific fulfillment company? All companies may have different policies and prices for what they do.
I am not talking about any specific fulfillment company. I am talking about a tshirt company who sells tshirts under its own name and from its own online and/or off-line network. Now I come in and also want to sell their tshirts, and they want to fulfill the orders, as they only do that for themselves, but when orders come from me, they put it in my bag and ship with my label on it. While I run the website, do marketing and collect payments.
 

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Sounds a bit backward. In that case you'd basically be a sales affilliate with their own website, but the merchandise is branded as your own. Odd. Normally you'd just take on and sell their line as their line, and they'd get a cut. It sounds like they're too much of a control freak to let that happen.

There's some odd splits in there. It would make more sense for whoever handles payment to handle shipping for example.

Ultimately the thing to remember is that whoever is designing, printing, storing, and shipping the shirts is doing the majority of the work (and taking on the majority of the risk), and the payment schedule will reflect that. The other party also takes on risk (marketing costs, chargebacks), but they're not really bringing that much to the table (aside from a few extra side sales with less profit).
 

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Discussion Starter · #11 ·
Solmu said:
Sounds a bit backward. In that case you'd basically be a sales affilliate with their own website, but the merchandise is branded as your own. Odd. Normally you'd just take on and sell their line as their line, and they'd get a cut. It sounds like they're too much of a control freak to let that happen.

There's some odd splits in there. It would make more sense for whoever handles payment to handle shipping for example.

Ultimately the thing to remember is that whoever is designing, printing, storing, and shipping the shirts is doing the majority of the work (and taking on the majority of the risk), and the payment schedule will reflect that. The other party also takes on risk (marketing costs, chargebacks), but they're not really bringing that much to the table (aside from a few extra side sales with less profit).
well not quite right, merch will be sold under their names, I will make it clear who is the manufacturer. Same thing as 80spurple.com except I will keep only a little of my vendors stock (for cases when customer buys items that are made by more then 1 vendor) but rest of the orders will be fulfilled by the vendors. They already do that for their own website, they'll just do same for me.

And yes because it's sold from my store and money come to me, I take most of the risk. Plus all the marketing expenses, too. You know it's much easier to make something then to sell it.
 

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farennikov said:
well not quite right, merch will be sold under their names, I will make it clear who is the manufacturer.
Sorry, I misunderstood. Sounds more normal than the concoction I invented ;)

farennikov said:
And yes because it's sold from my store and money come to me, I take most of the risk.
Whoever holds the inventory takes most of the risk, so in this case that would be both of you, but mostly the other company.

Will you have a different rate for orders you fill vs. the other company? It seems fairer to both of you that way, but also a pain to account for.

farennikov said:
You know it's much easier to make something then to sell it.
True.
 

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Discussion Starter · #13 ·
Solmu said:
Whoever holds the inventory takes most of the risk, so in this case that would be both of you, but mostly the other company.

Will you have a different rate for orders you fill vs. the other company? It seems fairer to both of you that way, but also a pain to account for.
True.
I disagree with the above - you can hold inventory forever and not sell anything, so what's the risk exactly? The risk as I understand in this situation is investing into selling something and not actually selling it. That's the real risk. Other then that one can print a ton of tshirts and put them in a warehouse and do nothing with them - that's not risk.

What do you mean fairer - having same pricing or different?
 

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Solmu said:
Sounds a bit backward. In that case you'd basically be a sales affilliate with their own website, but the merchandise is branded as your own. Odd. Normally you'd just take on and sell their line as their line, and they'd get a cut. It sounds like they're too much of a control freak to let that happen.

There's some odd splits in there. It would make more sense for whoever handles payment to handle shipping for example.
Not all that odd really. I have a friend that is very successful with that setup, though they are his own shirts he's having made this way, not the printer's. He has the website, the designs, and the promotion of the website, while the printer handles everything else.

This sort of setup works well for international sales - This guy lives in the UK, but doesn't need to charge extra shipping to the US since he has a seperate printer handle US orders.

farennikov said:
I disagree with the above - you can hold inventory forever and not sell anything, so what's the risk exactly? The risk as I understand in this situation is investing into selling something and not actually selling it. That's the real risk. Other then that one can print a ton of tshirts and put them in a warehouse and do nothing with them - that's not risk.
Sure it is. If they made a bunch of products that aren't selling, they're losing money. In the meantime, they're also taking up space - the warehouse they're stored in costs money too.

Marketing may generally be a bit harder, but the printer/inventory/shipper is generally going to get most of the cut.
 

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farennikov said:
I disagree with the above
I haven't been articulating myself particularly well in this thread, so that's fair :D

farennikov said:
you can hold inventory forever and not sell anything, so what's the risk exactly? The risk as I understand in this situation is investing into selling something and not actually selling it.
What else would you call printed inventory sitting in a warehouse?

farennikov said:
What do you mean fairer - having same pricing or different?
I was thinking having different pricing would be fairer, since it would reflect who was holding the inventory, and who was shipping it out (i.e. labour).
 

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Discussion Starter · #19 ·
Solmu said:
I was thinking having different pricing would be fairer, since it would reflect who was holding the inventory, and who was shipping it out (i.e. labour).
Well in general I think it's easier to make something then sell it, as a rule. You can make an unnecessary/unwanted product and I would not call this risk (of not being able to sell it) - it's simply lack of marketing research in the first place. Selling is more of an art, at the other hand.

So no, I don't think that making and handling is actually more of a big deal then selling it.

Unless manufacturer madkes a product that sells itself (that's so hot that everyone wants it), in this case yes, selling it would be easier then creating the product itself.

But t-shirts - be realistic, the supply on the tshirt market is huge, no matter how good you are it's still harder to sell then to make.
 

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Now I come in and also want to sell their tshirts, and they want to fulfill the orders, as they only do that for themselves, but when orders come from me, they put it in my bag and ship with my label on it. While I run the website, do marketing and collect payments.
Ok, that makes it clearer now :) For some reason I just wasn't understanding what you were asking.

Now that it's clear though, I'm not sure I have a good answer, as I haven't heard of that before with t-shirts.

It would seem, if considering the risk/rewards is that if you pre-purchased the t-shirts from them wholesale, so that YOU would be doing the fulfillment, then you would get a larger cut.

But it does sound more like an "affiliate" relationship where you basically sell their product for a cut. The main difference being that they are private labeling the shipments for you. I've seen t-shirt affiliates paid between 5% (very low) and 25% of the sale. If they are taking the time to private label, that means they are probably losing out on the direct repeat sale, so I'm guessing your percentage might be on the lower side. But I could be totally wrong.

For example, with the tshirthell affiliate program, they pay $4 per t-shirt sold and their shirts retail on their site for $18 (not including shipping). They don't do any private labeling, but they have one of the larger cuts for t-shirt affiliate programs (about 22%).

Is this an actual negotiation that is happening? If so, have they made a suggestion as to your cut?
 
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