Chapter 27 Wholesalers
Bob walked to Rose’s gift shop first thing Monday morning and found her setting up the newspaper stand.
“Hello Bob. If you want Jack he’s helping Ken but I expect you already know that.”
“It’s you I want to talk to Rose, not Jack. Do you use distributors? If so, I want to learn what they do.
“Well, come in and have a mug of tea and we’ll talk. It’s already made.” She took him to their tiny office, went to the kitchen and returned with a tray loaded with a tea pot, milk, sugar, mugs and a bag of oatmeal biscuits.
“I buy most of my things from two wholesalers. They provide catalogues and I order items that I think might sell. They bring what I ordered when they’re next delivering in this area, that’s about once a fortnight. If they don’t have what I want they’ll phone and tell me.”
“Why are you talking about wholesalers? Are they different from distributors?”
“Well distributors carry non-competing goods whereas wholesalers carry products from manufacturers who would be in competition with one another. For instance, the wholesalers catalogues list tea pots made by several companies and I have a wider choice and, often, better prices than I’d get from a distributor.”
“Then we should be looking for a wholesaler not a distributor?”
“Probably. They’ll buy a number of your toys and list them but you’ll be competing against other toy makers.”
“Well we are in competition with others, anyway. But no one makes, as far as I know, wooden villages and farms.”
“You see, if you go with a distributor he’ll want a long-term contract with you and he’ll really investigate your company to be sure he’s representing a sound company, one with a well-known name and a reputation, things like that. At least, that’s what I understand. Thus if I want to buy some plates from a well-known manufacturer I would have to buy from their distributor not a wholesaler.”
“I see. How did you chose the wholesalers you use?”
“I talked to other retailers about the ones they use. One of my wholesalers supplies goods from Europe and the other one buys stuff in Asia. I also use other catalogues sometimes. Why do you want to know all these things Bob?”
“Delivering the toys is becoming too difficult. We are about to make many more and we need a lot more shops if we are going to sell all of them. So we thought about having a distributor sell them for us. But I now know we should be looking for wholesalers not distributors.”
“Jack told me about the production line Ken was setting up. It sounds a bit complicated.”
“I think it’ll work. I’ve always found that Ken knows what he’s talking about. He says that the new line will produce as many toys in a day as our existing workshop can produce in a week.”
“Well I’ll give you the names of the wholesalers I use and you can contact them.”
“Thanks Rose.”
She copied their names on a piece of paper and gave it to Bob. He walked along the road to the workshop and entered by the side door, greeting everybody and watching what they were doing.
“Thanks for the clean overalls,” Craig said.
“You’re welcome. Have you got overalls for the new people?”
“Yes,” answered Lori. “Who’s going to wash them next time? There’ll be too many for one person to handle.”
“Perhaps Mary, Ken’s wife, will take half next time.”
“Maybe we should buy a washing machine and do them weekly. They’re pretty dirty after two weeks. We could put it here, in this shop, in the corner by the paint booth.”
“I’ll talk to Ken about that. It might be a good idea. I’ve got to make some phone calls now. We’re looking for a wholesaler to distribute our toys.”
“Oh? What are Bert and I going to do if you do that?” asked Gerry.
“We’ll probably need someone to deliver to local sellers, or you could work in the shop. Don’t know yet, we’ll find something. Don’t worry.” He went into the office, sat at Ken’s desk, picked up the phone and called Leo.
“Hello Leo. How are things?”
“Hello Bob. It’s good with me. Your toys are still very popular. I’ve met one of your new men, Gerry. He’s delivering for you now then?”
“Yes. We’ve two people doing that as well as working in the shop. The other guy’s Bert. You might see him sometime.”
“Well I don’t need more sets at the moment Bob, thanks.”
“No, I didn’t want to talk about that, Leo, I want to learn about using wholesalers. That’s how you get most of your stuff isn’t it?”
“Yes.”
“Who do you use? I’m asking because we are thinking of asking some of them to sell our toys.”
“You know they’ll take twenty percent or more from you if you use them?”
“Yes, Ken told me. You see, we’ll soon be producing enough toys to need a wholesaler.”
“Well the one I use most often is based in Liverpool. They stock stuff from most of the world so they have a wide variety of items. They also stock toys and they might be a good choice for you. I don’t know what they charge a manufacturer though.”
“What’s their name Leo?”
“We-Have-It Wholesalers.”
“We-Have-It?”
“We-Have-It Wholesalers. Yes. The name’s simple and easily remembered. They’re probably the biggest distributor of goods for shops like mine. Here’s their phone number,” and he read it out.
“Thanks’ Leo. Do you use any others?”
“Yes, several, but the Liverpool one is the best for me and the prices of the goods they sell are competitive. Do you want the names of the others?”
“Er, no. Not now. I’ll call We-Have-It and see what they say. Thanks Leo.”
He hung-up and leaned back in his chair. 'That’s interesting. Why doesn’t Rose use We-Have-It? I’ll have to ask her next time I see her.'
He picked-up the phone again and called the Big End library and explained that he wanted the names of the biggest wholesalers that carried toys in England and asked if they could help him. They said they would look for the information and call him back in a day or two; they couldn’t do it today because they were too busy.
The outside door opened as he hung up and Ken and Jack walked in. Jack greeted Bob as he walked through the waiting room to the workshop but Ken, seeing Bob in the office, joined him. He gestured to Bob to remain seated, gave him a list and perched on Lori’s desk.
“Here are the names of some distributors that my work colleagues told me about. You might call them and see what they say.”
“I don’t think we can use a distributor Ken. They only represent companies with big reputations. Small End Wooden Toys isn’t that yet. Rose and Leo obtain almost all of their things from wholesalers. I have the names of three and the library will send some more in a day or two. Rose uses GB Wholesaler often. They supply items from Europe. I’ll have to phone them and ask what they would charge us and where they deliver. Leo uses a company called We-Have-It Wholesalers. I’ll have to ask them the same thing. I’ll do it after the tea break.”
“Wholesalers, eh, not distributors. Hadn’t thought about how they differed. So we’re not big enough to have a distributor represent us? Well, we will be, one day.”
“If wooden toys remain popular.”
“Well teddy bears did. Every young boy is given one of those. That could happen to us.”
“Yes. Maybe. So what are you and Jack working on?”
“We were making racks to hold incoming wood and have just finished. After tea we’ll build shelves to hold the boxed sets. I wish the saws and sanders were here; I’d much rather be installing them.”
The door from the workshop opened and everyone walked into the waiting room. Craig put the kettle on and Luke opened the biscuit box, putting it on the table and everyone grabbed a couple.
“Do we have any more chocolate digestives Lori?”
“Yes, two packs.
I’ve never let us run out have I?”
“No, not yet.”
“Did you have a good weekend with your girlfriend Luke?” asked Lori.
“Yes. I saw you and Craig in Benny’s Inn Saturday night.”
“Oh did you. Well why didn’t you come over?”
“You seemed too interested in each other and I didn’t want to disturb you.”
“Don’t be daft Luke. We were discussing business,” said Craig.
“I bet you weren’t. You had your arm over her shoulder nearly all the time you were there.”
“Next time you see us and you have your girlfriend bring her over. I’d like to meet her,” said Lori.
“Maybe. What did you do this weekend Jose?”
“Read mostly.”
“Have you heard from Rosemary?”
“No.”
“Well next weekend you’ll have to come out with us. We could arrange a date for you if you like.”
“I don’t want one. I’d might join you if you’re by yourselves or if you’re with a gang. Let me know what you’re doing and I’ll decide.”
“Okay.”
Bert was talking to Gerry about paying something towards the cost of the petrol he was using when he drove him to work whilst this was going on. Ken made a few notes on a piece of paper then started talking to Jack about something. Bob sat in a corner taking it all in, just enjoying being in the group. He didn’t feel he had to participate. Fifteen minutes later everyone had left. He went to the office and called GB Wholesaler. He described who he was and that they were looking for a wholesaler to carry their line. “At the moment we want to know if you would handle our toys, where you deliver to and what you would charge.”
“We’d be glad to include your products in our catalogue. We already have three toy manufactures but none of them make the wooden toys you’re making. We deliver to all of the southern half of England, including all of London. Our rates depend upon how many we sell and we charge extra if we have to collect the toys from you. If you bring them to us you save money.”
“Where do we take them to?”
“To our warehouse just outside Heathrow airport.”
“Okay. About how many gift or toy shops use your services?”
“Probably a thousand, maybe fifteen hundred. I don’t know without going through the lists and counting.”
“We deliver ourselves to over three hundred shops at the moment. If any of those aren’t on your lists would you send them your catalogue?”
“If they were in our territory we’d gladly do that.”
“Some of them are in Wales.”
“Well you would have to deliver to those shops yourself. How many toys do you sell each week?”
“About 150. We sold over 600 in May and expect it to be much larger soon. We’re aiming to sell ten times that number soon.”
“If we sold 6,000 of your toys each month we’d probably charge twenty percent of the retail price. It wouldn’t be less and it might be more. You’ll have to talk to people in our sales department to get a firm figure.”
“Well thank you. I’ll talk to my partner and will call you back with our decision.”
“Thanks’ for calling us and I hope we work together in the future.”
Bob made notes whilst the man was talking and, when finished, he called We-Have-it Wholesalers and asked them the same questions. He was told they delivered to the whole of Great Britain, all except some distant parts of Scotland, that they sent their items by bus to retailers who lived there, that they probably delivered to three or four thousand gift and toy shops, that their main office was in Liverpool and that the closest warehouses to them was in Basingstoke. They would charge between twenty five and thirty percent of retail, “and you have to deliver the stock to one of our warehouses. We don’t collect.”
Bob had enough information to do some calculations now. He knew the shop’s expenses, paying twelve employees salaries, buying wood and materials, and miscellaneous would be about £5,000 a week. The savings for not renting two of the vans would about pay the Community Centre’s rent so five thousand would probably be good enough.
If Ken was right and they made, say, three thousand a week, and they paid a wholesaler no more than thirty percent, then . . . He took out the calculator, forty to the retailers plus thirty to the wholesalers equals seventy percent, so they’d be left with just thirty percent of retail price. ‘That means if we sold a thousand of each toy each week we’d make £4,500 on the trains, £6,750 on the farms and £7,500 on the village sets. That’s £18,750, less £5,000, which leaves £13,750. And more, much more, if we made over three thousand each week or if we could get a lower rate from the wholesaler.’
Of course, the retailers would have to sell the three thousand before they’d want more. They’d need a thousand retailers if each shop sold three per week. Some would sell more and some less but about three each week, during the tourist season, would be about right. Then they could go with either wholesaler. He talk with Ken and see what he thought they should do.
They had a chance to talk after lunch. Bob told him what he had discovered and explained his rough calculations. “So you see Ken, it doesn’t matter which wholesaler we go with.”
“I’d rather pay twenty percent than twenty-five or thirty percent. That means we should go with GB Wholesaler.”
“Yes. He said that probably a thousand or fifteen hundred shops they delivered to might take our toys.”
“Yes. However if half of them didn’t we’d be stuck. How many shops might buy toys from We-Have-It Wholesalers?”
“Three or four thousand is his guess.”
“That’s much better but charging twenty five to thirty percent is a big problem.”
“Yes, but, as I said, if we make a thousand of each set each week we’d definitely need a thousand retailers selling them. We’d need more of them if we made more than that.”
“And we’d make £13,750 each week if we went with We-Have-It?”
“Yes, if they sold everything.”
“Then let’s go with them. We won’t have to worry about the toys not selling if we did that. I can always set up another bench if the demand requires it.”
“Okay. Another thing in their favour, it’s much easier to deliver to Basingstoke than Heathrow. So we should keep the big van and return the two small.”
“Let’s keep all of them for now until we see how things work out. You’ll make the arrangements with We-Have-It Wholesales?”
“Yes. I’ll phone both of them now. What will we do with Bert and Gerry if they are not delivering?”
“They can join the production line once We-Have-It takes over. They seem like good workers.”
“Okay. You know Ken, we’ll be making close to £700,000 a year if this works out. About £350,000 for each of us. It seems impossible. I have no idea how to manage that much money.”
“You’ll soon learn I’m sure, Bob. Let’s worry about that when it happens.”
“It’s such a lot. I don’t think it’s really possible.”
“We’ll see. I’m going back to the Centre now. Will you be here tomorrow?”
“Yes, unless Lori says there are lots of deliveries to make. ‘Bye then Ken.”
“Cheers Bob.”
Bob called GB Wholesaler to say that they would be working with a wholesaler who covered all of England and then called the library, telling them he no longer needed the list. They seemed rather pleased when he said that. Then he called We-Have-It.
“Hello. It’s Small End Wooden Toys again. I talked to you about half-an-hour ago. We’d like you to be our main wholesaler.”
“If you only use us you are likely to get a better rate,” he was told. “Talk to the sales people about that and see what they say. When can you come to see us?”
“In Liverpool?”
“No. You can talk to our man in Basingstoke. If you contract with us this week we can get you into our next catalogue.”
?
??I’ll check with my partner and see if he can do that. He’s very busy right now. I’ll let you know what he says.”
“Oh you don’t have to call me. Call Dave Posser, he’s in Basingstoke. Here’s his number. He’s the man you should see.”
“Okay, thanks.”
Bob called Ken. He had to wait for nearly two minutes before the phone was picked up.
“Hello Ken. Sorry to bother you. Is there something wrong with the phone? Didn’t you hear the ring?”
“Yes I did but I couldn’t just stop what I was working on. And the phone is in the old office. I leave the doors open so I can hear it but we’ll have to have an extension in the hall. Ask Lori to call the phone people about it would you? What did you want?”
“We-Have-It said we have to sign an agreement with them and asked if we could see their sales agent this week.”
“No. I can’t. Can you do it without me?”
“I don’t think it would be legal for just one of us to sign the agreement. He said if we do it this week we could be included in their new catalogue.”
“Oh, God! See if we can do it on Saturday then. Saturday morning, as early as possible. I want to be free to work here the rest of the time.”
“Are things going wrong?”
“No, but they might, so I want to be free in case they do.”
“All right. I’ll let you know what they say.”
Dave answered the phone as soon it rang. Bob told him what he wanted to do. “Could we meet early on Saturday.”
“Would eight o’clock be early enough?”
“That’d be perfect. We were told if we sign-on this week you could include us in your next catalogue.”
“Yes that’s right. Then you’d better bring in a description of each of your items, each wooden toy, and a photograph of each, in colour. Also their normal retail prices, we’ll work from that to calculate our rate.”
“Do we get a better rate if we make you our sole wholesaler?”
“We used to do that but it became unmanageable. Manufacturers find other ways to sell and it caused problems. So we stopped doing that two months ago. Do you know that you have to deliver your toys here or to one of our other warehouses? We don’t collect from manufacturers.”
“Yes. I was told that. We’re in Small End. It’s near Big End, midway between Bournemouth and Southampton, so that’s why I called you.”
“I know Big End. Had a holiday near there about ten years ago. Nice place.”
“Yes.”
“All right. I’ll expect you at eight o’clock Saturday morning. Here’s the warehouse address,” and he read it out. “My office is with the others at the front of the building. Tell the guards you want to see me and one of them will take you there.”
Bob walked into the shop and asked Lori if she could come to the office.
“Ken wants a phone extension in the centre hall so could you call the phone company and arrange that. And we are going to contract with We-Have-It Wholesalers. They’ll handle our toy distribution. They deliver to everywhere in Great Britain and will put our toys in their next catalogue. So could you write a description of each one, listing it’s features, and its retail price.”
“I’d have to think about what to say about each one first.”
“They want it this week. Ken and I will see them on Saturday so we want it by then. We have to include a photo of each and I’ll have Jack take them. He’ll print copies and you can paste them on the sheet. Tell him how large they should be.”
“Jack uses a digital camera so I could give you a memory stick holding both the text and the photos. They’d probably prefer that. Should I?”
“Er, yes please Lori. Give us both, just in case. Can you show me what you’ve written as soon as it’s done?”
“Yes. Can you do any deliveries this week? I hope so because there are lots of requests.”
“Yes.”
“Would you like to go west, north or east? I’ve got three lists.
“North,” he replied. It was much nicer scenery that way. She went to her desk and found the list for him.
“It’s a long one and it’ll probably take three days to go to all of them.”
“From the look of it you’re right. I’ll not be back until Thursday then. In that case you’d better show the toy descriptions to Ken and ask him if he thinks they’re okay. I’ll check them on Thursday. And, Lori, we should have signs at the Centre to show where deliveries should go. Put a notice by the front door and back door. We’ll also need a bell at that door to alert Ken or Craig when there’s a delivery. I’ll tell Ken about the bell and he’ll get Jack or Pat to put one in. Oh, do we have chairs and a table for the tea room at the Centre?”
“Not yet. They’ve been ordered, and a small fridge, a microwave and a cupboard for supplies. They’ll be in this week, I hope.”
“Good. It looks like you’ve been giving this a lot of thought.”
“Ken, Craig and I discuss these things all the time, but we didn’t think about a notice for the doors or the bell.”
“That’s all I can think of. Okay, I’m off to the Centre now.”
He found Ken and Jack in the far storage room building the last of three big racks of shelves. He told them about the Saturday arrangements.
“We should be back before eleven and I can help you over the weekend if needed. I’ve asked Lori to write the descriptions of the toys. And, Jack, can you photograph each of our toys and print them in colour and give them to Lori. And she’d like a memory stick with the photos on too.”
“Aye. When do you want ‘em,” asked Jack.
“Could you do it by Wednesday?”
“Aye.”
“Thanks. Lori will show you what she’s written Ken. You can change it if needed of course. I’ll be delivering tomorrow and Wednesday so I can’t look at it until Thursday.”
“All right. Did you ask Lori to tell the phone company we need an extension?”
“Yes and we thought there should be a bell by the back door so you know when there’s a delivery.”
“I’ve got one an’ can put it in,” said Jack.
“Okay,” said Ken.
“Well I think that’s all,” said Bob. “I’m going back to load the van and take off, unless there’s something I can do here.”
“No, we’re nearly done. Then we won’t see you until Thursday?”
“No.”
“Have a safe trip then. Cheers Bob.”
“‘Bye boys. Don’t do too much or you’ll collapse.”