what is trade price in a chandlery?

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tim_ber

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Anyone know if there is a standard? Or does it depend upon product?

Ball park figure anyone?

Also, what would be the COST price do you think? (That is, supplier sells it to the shop at Y, then chandler does his thing and price ends up being Y+Z)

What is Y? any ideas? Half of Y+Z or what?
 
I must have done something dreadful in a previous life, as years ago when I was between proper jobs I worked in a chandlery.

The customers were generally fine, it was the manager who was a total pain, which is the very cleaned up polite version...

Mark-up varies enormously with product, but is actually quite small, only around 10% a lot of the time.

Put it this way, I was looking for any bargains at trade price, and I wasn't tempted - and of course the mail order places are really cut-throat as everyone compares prices for each significant item - motto, don't invest in the chandlery business.
 
Oh dear...

Right, thanks

So if I am supplying something at £10, and he is selling it at £20 (and it costs me £3 to make it), then I should be selling it to him for a bit more shouldn't I? He makes £10 profit, and I only make £7 (less labour costs).
 
tim_ber said:
Right, thanks

So if I am supplying something at £10, and he is selling it at £20 (and it costs me £3 to make it), then I should be selling it to him for a bit more shouldn't I? He makes £10 profit, and I only make £7 (less labour costs).
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Everything is only worth as much as someone will pay for it, works right through from the manufacturer through wholesaler to final seller. Thats my 45 yrs experience anyway.
 
If its anything like car spares then:-

Trade price = price to public less, say, 10%

Price mechanic puts on your garage bill = price to public plus, say, 10%
 
Most regular products are sold based on a notional list price. A chandler will get anything from 10% to 40% discount with an average of around 25% - or a mark up of 33% on cost. Many products have artificially high list prices and as there are no price controls are often sold at notional discounts of 10-15%. However, the retailer will still aim to make a 20-25% gross margin and net margins are typically 10-12% - above supermarkets but below say, clothes and furniture retailers.

Not a road to riches as the regular stream of failed chandlers (particularly mail order) shows.
 
tim_ber said:
Right, thanks

So if I am supplying something at £10, and he is selling it at £20 (and it costs me £3 to make it), then I should be selling it to him for a bit more shouldn't I? He makes £10 profit, and I only make £7 (less labour costs).
Click to expand...

Not really - you're paying for a service - I'd guess maybe distribution, marketing, retail sales outlets and transaction handling, etc.

There's two questions to ask I reckon - can you do it cheaper and/or better yourself (think VERY carefully before saying yes as retail is a world away from wholesale or industry selling). The obvious one is can someone else do the job better/cheaper than your current retail channel. If yes then you're paying him too much, if no then you don't have much choice. The usual problem is a bunch of intangibles such as how much is an exclusive right to market worth, will another retailer do a good job (a bad one can damage your product's reputation and your brand), how much marketing should you do versus the retail channel and who should you target, etc..
 
Please be kind to your local chandlery. They stock huge ammounts, have a huge knowledge on a wide range of items and are normally open everyday.
They often have huge overheads unlike some mail order only websites who are sitting in a grim unit in an industrial estate far from anything water like.
Chandlers are a dying breed but when you need something in a hurry or need some advice, we normally can help. You may pay a bit more than online but if something goes wrong or if its the wrong size you can take it back easily or if you need help on a product and you can see before you buy.

Please support your local!

Thank you,
Petersboats,
Peter Leonard Marine.
www.peterleonardmarine.co.uk/shop
 
petersboats said:
Please be kind to your local chandlery. They stock huge ammounts, have a huge knowledge on a wide range of items and are normally open everyday.
They often have huge overheads unlike some mail order only websites who are sitting in a grim unit in an industrial estate far from anything water like.
Chandlers are a dying breed but when you need something in a hurry or need some advice, we normally can help. You may pay a bit more than online but if something goes wrong or if its the wrong size you can take it back easily or if you need help on a product and you can see before you buy.

Please support your local!

Thank you,
Petersboats,
Peter Leonard Marine.
www.peterleonardmarine.co.uk/shop
Click to expand...


well said peter, i have noticed in the last couple of years the disappearing chandlery which you can actually walk thru the doors, loads have gone to the website route and closed the shop door for good. I used to enjoy browsing the aisles and find that item which you could use for the job which you havent found the solution for.

Also would prefer to see the item 'for real' before buying.
 
I agree completely, one can learn a lot just browsing in a decent chandlery, and if it is decent and they have time you'll probably find the staff and other customers happy to chat.

In my area, I'd particularly recommend Emsworth Marina Chandlery, also both in person and by mail order ( nice to know the shop, not a warehouse ) Piplers of Poole have given me excellent service beyond the call of duty, good prices too.

With such prime locations both these chandleries are doing well just to survive, but have proven success is possible given the right approach.

Sadly I can think of another chandlery nearby which has p'd off myself and a large swathe of my club to the extent we make a point of not spending a penny there, preferring to wait for mail order if Emsworth Marina Chandlery don't have or trade in something.

In my case, the place in question had been recipients to a great deal of my cash during a major refit, including just one day's order of over £4,000.

When a ship's battery proved to be faulty - it was not used, not in usable condition, they refused to honour the guarantee; as I say chums of mine have had similar treatment, people like that deserve to go to the wall, hopefully leaving more trade to the good ones.
 
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tim_ber said:
Anyone know if there is a standard? Or does it depend upon product?

Ball park figure anyone?

Also, what would be the COST price do you think? (That is, supplier sells it to the shop at Y, then chandler does his thing and price ends up being Y+Z)

What is Y? any ideas? Half of Y+Z or what?
Click to expand...

Clothing is usually bought in at 45-50% retail.

Most books, can be purchased from one of the major chandlery suppliers, for 35% discount, if you have an 'account'. Admiralty Charts offer much lower discounts.
 
I know its not comparing like with like but once, long ago, I used to operate a club shop selling dive gear to NATO forces based in Turkey. We had deal with a number of equipment manufacturers in the US who sold to us at 'factory' prices. Typically, these prices were about 40 - 50% of what was available via the cheapest mail order houses in the US.
By the time we'd added on postage costs and a profit margin for the club, we were selling at about 20% above our cost price from the manufacturer. This was still a good deal cheaper than the mail order firms in the states and lots cheaper than the local Turkish shops.
However, we had no overheads other than postage and the whole thing was run by volunteers. Having looked at similar deals with UK based maunfactuers, the trade prices seem to be in the same ballpark area - that is a 50% mark up on trade prices.
Why bring this up? I suspect that the trade prices charged by the like of Plastimo are probably in the same range as that for diving gear - ie a mark up of 50%. But this is not profit; most of it gets eaten up by overheads of one sort and another. Even the internet companies have significant overheads in terms of stock holding. If you offer fast turn round times to cutomers, you need to have stocks to be able to meet demand, this means you have to have the capital to buy stock and that'll cost you money to borrow.......
You won't get much cheaper than the internet, as the manufacturers aren't interested in dealing direct with Joe Public (except for a few rare cases) but if you want service, then do support your local chandlers.
 
If you offer fast turn round times to cutomers, you need to have stocks to be able to meet demand, this means you have to have the capital to buy stock and that'll cost you money to borrow.......
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Or have fast turn around with your suppliers .. which is becoming the norm these days - or even do direct ship to customer from your suppliers ... which we also do.
 
tim_ber said:
Anyone know if there is a standard? Or does it depend upon product?

Ball park figure anyone?

Also, what would be the COST price do you think? (That is, supplier sells it to the shop at Y, then chandler does his thing and price ends up being Y+Z)

What is Y? any ideas? Half of Y+Z or what?
Click to expand...

Most retail (high street) is of the order of retailer pays distributor Y (excluding VAT) retailer sells for 2 x Y (including VAT) or 70% mark up, 35% margin. That is what I see as bottom end prices for a retailer. I havn't been involved much in electronics apart from selling a few 100 GPS units through high street outlets but the margins can be less and manufacturers can force a low RRP on a retailer as they do alot of the publicity and marketing which benefits the retailer.

Wholesale margin depends on volume and hence shipping costs but 10-20% margin is typical

Manufacturing margin very much depends on the product and its uniqueness, how it is protected, if it can be easily copied or if there are similar products already there.

Having said all that if you are starting off, it is what the customer will pay less the margins you negotiate or agree with resellers or outlets that determines your margins.

Running a retail operation is quite expensive with long hours, staffing comitments and training that is often not recognised, so that Joe public can walk in and get things from a wide selection of sizes colours types etc 6 or sometimes 7 days a week at short notice.
 
Quite a few moons ago now I was working in a wee boatbuilding yard here that also had a thriving little chandlery (alas, the boatyard closed down a few years ago).
We would buy all of our parts from Lewis Marine in Fort Lauderdale, and because we were 'trade' they would give us a 40% discount on their catalogue price. They had (probably still do, even though they are on line as well now) a massively thick catalogue (it was my bible! :)) with just about everything under the sun available within.
We quite often took orders from customers for lists of specific parts, and so long as the goods came in a container by sea (as opposed to using eg Fed-Ex) we could confidently quote them the list price in the catalogue knowing that we could still manage a 50% mark up on what Lewis Marine charged us.
Our customers were very pleased with this arrangement, re how we were charging the same price as the chandlery in Fort Lauderdale, despite the additional costs of shipping, as in the past they had had to get used to the fact that everything imported here would always invariably cost at least 50% more than overseas.
 
I ran a little chandlery for a couple of years, and the profit margins are not as high as you would imagine. Clothing is the best at 40 to 50% of retail list price, shoes and boots next, books at 35% and charts at 20%,
Other goods are between 20% and 35%, but this is off the list price, to actually compete and sell against competitors you have to slash your prices, if you get 10% on electronics you are lucky.

The main problem is that the big guys, Raymarine Garmin Musto etc. give huge discounts to companies who order in bulk, so in some cases the Chandlery chains can offer goods for sale cheaper than the small independent chandlery can even buy the stock at.

I used to get very frustrated at the prices charged by the marine wholesalers, items were often available in other shops cheaper than the wholesale price, buckets sponges paintbrushes sandpaper and all that sort of thing.

The most frustrating thing of all was the people that would come in, get something out the box, ask lots of questions, get lots of advice, then go and buy it online or at the big store in the next town.

Another big expense is keeping a display, I've known of cooker knobs being stolen, bulbs taken out of display safety lights, essential small parts stolen, book corners damaged... the list goes on.

The benefits of small local chandlery's are immense, when you are working on your boat and you suddenly need something, how nice to get it locally rather than fight through traffic (yes I am in Gosport) If you want to keep the small chandlery's open, you have to support them.
 
tim_ber said:
So if I am supplying something at £10, and he is selling it at £20 (and it costs me £3 to make it), then I should be selling it to him for a bit more shouldn't I? He makes £10 profit, and I only make £7 (less labour costs).
Click to expand...
Life is not supposed to be fair.
He is not going to share profit with you.
He will buy as cheap as he can and sell as dear as he can.
Your job is to make as cheap as you can and sell as dear as you can.
Somewhere in that is a deal.
If you won't supply cheaply enough he won't buy.
So you sell nothing.

(Are you VAT registered? You can't claim VAT on your purchases, but have to pass the VAT content on to him. He has to add VAT to his profit, but he can't claim back VAT from you.)

There is no norm.

If you are wanting to do business you have to work out a a deal.
 
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