How To Make Money as a Lighter Wholesale Distributor. Learn about the business of Wholesale Distribution with this example of how to start and run a wholesale distribution business selling to retail convenience stores and supermarkets.
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Copyright 2006 Jorge Olson
Business Review: Lighters Wholesale Distribution Business.
Lighters are one of the easiest things to wholesale and distribute. Stores buy them like crazy!
I started selling lighters when I had my route in San Diego with about 600 stores. Other distributors told me about how much money they were making with lighters so I decided to give them a try. They were right. Since the first day we introduced them to the stores they were best sellers and they have remained best sellers for years.
The first thing you should know is that I?m not talking about disposable lighters or even name brand lighters like Colibri or Zippo. I?m talking about Novelty or Collector lighters. The kind you see in convenience stores and liquor stores. They are butane refillable lighters.
For example, the top selling lighters were lighters in the form of a gun, torch lighters and chopper motorcycle style lighters.
The lighters cost about $1.25 to $1.50 plus shipping, depending on the style of the lighter. Some of them are regular flame lighters, some of them have a torch, and some are double or even triple wind resistant torch lighters.
Lighters come in a small cardboard counter display. You get all of the same kind in every display. You get from 12 to 30 lighters in each display, depending on the size of each lighter.
When you distribute the lighters you sell them for at least $2 all the way up to $3 or even $3.50. It all depends where you are in the USA or in the world, the size of your town, the size of the stores, etc. You learn how to price them quickly from the first time you go into the stores.
So how much can you make? Well, if you leave an average of 2 displays per store containing an average of 25 lighters each, you?ll sell 50 lighters at an average of $3.00 or $150 sale. If you paid $1.50 per lighter including shipping you made $1.50 per lighter or $75 profit in one store. If you sell to 10 stores that day you are selling $1,500 and pocketing $750.00 minus your gas and other expenses. That?s not bad for a few hours of work. In my business all of my salespeople have to visit at least 20 stores per day, not 10 stores!
Let?s go over the numbers of our example again: -Your cost per lighter including shipping= $1.50 -You sell the lighter to the stores = $3.00 -Each display has an average of how many lighters = 25 -If you sell just 2 displays to the store how many lighters did you sell = 50 lighters -How much was the sale? = $150 -How much was your profit? = $75 -If you sell to 10 stores in a day how much do you sell? = $1,500 -How much do you profit minus gas and other expenses? = $750
Again, your business will vary depending on how many stores you have, how often you visit them the price you sell them for, and many other variables.
Let me tell you what I like and don?t like about the business. What I like is that you go through a lot of lighters really fast. They are small and easy to store and carry. They come in their own display so you don?t need to buy racks or displays (although you can if you want or if the stores like them). I also like the fact that lighters are small and you don?t need a truck or extra storage to sell them.
The thing I like least about the lighter business is that the margins are not as high as with other products. I think it?s a fair trade because of the volume you can sell. The other thing with lighters is that people like to choose them. Instead of you selling whatever you have in the car people like to play with them before they buy them, they like to test them, to look at every one. It?s a novelty, so they want to buy what they like, not necessarily what sells.
All and all I think it?s one of the best businesses to be in.