Thanks to the fantastic SquareUp! service we are once again accepting credit card payments without the need to go through PayPal on at www.auntermas.com
Just make your purchase, enter your credit card, and you’re done!
Ever wander in to a Costco and see those people handing out samples? I’m not talking about the plastic stretchy cap ole’ ladies down the isles. But the enthusiastic, logo emblazoned people trying to get you to come over and try their stuff? This is what Costco calls ‘The Roadshow.” Costco gives companies the opportunity to sell their products in Costco. Costco loves the idea of their stores being kindof like a ‘treasure hunt.’ So this concept, rotating various different roadshow products, spices up the otherwise dull 95% of stuff that never changes in the Costco isle. So last week I met Costco’s in-house broker to discuss doing a roadshow for Aunt Erma’s. For a food entrepreneur it at first seems like a great opportunity. Average sales volume are huge. The broker walked me through the process. There’s a small book of documents to go through in order to participate in the roadshow at Costco. Here’s the basics. Costco will give you space in the store for $35.00 per day. The recommended roadshow days are Friday-Sunday. All good so far. Costco takes 14% of your gross sales, the in-house broker another 3%. Still not too bad. Costco keeps track of sales at the register and will pay you right away. In most cases the very next day! Even better. Be prepared to give away big sized samples, my broker estimated I would be giving away about 3.5 cases of samples a day. My out of pocket costs over three days, almost $300.00 per store. Hmm, not so good. The sample giver outer people are also my cost, so are banners, t-shirts, caps, the table and anything else you want to set-up to jazz up the space. You are required to have 2 people at all times during operating hours, which means 10-11 hour days. Not likely my wife and I can stand there for 33 hours so even 10/hr. hires will cost in the high $600.00 range for three days per store. The Costco buyer is also looking for a value. Aunt Erma’s mandel bread sells for $7.99 a box at Whole Foods Markets My thought was to bundle two of those boxes together and sell them for $7.99. I won’t bore you with all the details, but when I put all the numbers down on a spreadsheet, based on the broker’s estimated sales per day, and my estimated costs, I would lose almost $270.00 over three days for every store I was road showing!
I know what you’re thinking. Just raise the retail price. Problem is, if I raise the retail price to $8.99, true enough, over three days we take home a profit of $250.00 per store. But two things are at play here. First, that’s a very slim profit, any sales slumps, or mis fires on anything else and we’re losing money again. #2 I think Costco shoppers are really looking for a great value. $8.99 may have a value perception of being too high. The imaginary barrier to buy. Whole Foods buyers are ready to accept higher priced items. But Costco? For me to safely clear a profit I would have to raise the two-pack bundle to $9.99 for two. And honestly, if I was shopping in Costco, and saw ten bucks for ‘some cookie’ – I think I’d pass.
I quick shout out to my friends at BlendersBBQ Check them out at Whole Foods Market’s in SoCal! I’ve met so many great food entrepreneurs on this journey, people willing to share their time and advice. Best way to thank them is to go out and buy their stuff!
And one more thing…We are still working through our high holiday snafu but expect to be back on the shelves in Beverly Hills and beyond in the next two-weeks!