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I have just recently started my own hot sauce company, now I am looking to get it into stores. Does anyone have information on how to do this? I know how much I can sell it to the stores for but I don't want the product sold for an extremely high price. I want a selling price cap I guess.
I am in the Chicago area. If I want to sell in California, New York, or Florida, how can I ship it to those states and not get killed by shipping costs? Any info on any of these questions would be helpful. Thanks.
By JB from Chicago, IL
You can have your home kitchen approved by the local health department. Call them and ask what you need to do to accomplish your goals. Public health people are very helpful and usually nice (unless they expect a hard time, then they can be not nice).
I think you would be better off getting some professional advice regarding marketing your product to stores and negotiating the terms of your contacts (which would include your wholesale price and mark-up) with the stores. Generally this is done at the corporate levels of chain stores.
Regarding shipping costs, you also need to talk to a business adviser who can give you advice on how to incorporate your production and shipping costs into the price of your product (which it should be). They will also be able to give you advice on what business expenses like these are tax-deductible and how to structure your business correctly for tax purposes.
Starting a business is not an easy thing and it gets more complicated when you add to the distribution chain. If you want the easy route, then set up a web site or sell your product on Ebay.
Thanks, as a startup we are strapped for cash, instead of getting a business advisor for contracts for right now I think I will get a lawyer to make the contracts about prices. As for the shipping and distribution being put into the price, we can not raise the price anymore at all, there is a certain price range, so I will need more info on not getting killed by shipping fees. Also the website, like I said strapped for cash. Nobody buys hot sauce on Ebay. We did spend a lot of our startup cash on starting up. Thank you a lot for the info.
I would try to sell it locally first to build up some capital. Try local roadside stands or fruit markets and maybe even sell it at a flea market. See if they can put it right near the cash register and promote it as a local product. Once you get the product out there, if people like it they will find a way to buy more. Maybe a phone number on the label would help.
If you get into the bigger chain stores there are too many franchise "rules" to deal with. You may also want to check with your county health department to see if there is anything you need to do before going to the retail market such as having all the ingredients listed on the label, etc.. Health Department may also have guidelines regarding the way the product is processed and bottled. Good luck and don't give up!
Don't forget to patent the recipe/formula. This will be a biggie, because some stores, chain or local, will maybe try to claim it as their own. I would ask this questions on forum.freeadvice.com of course put http:// in front of that. They have wonderful resources and people that will try to answer your questions, even some lawyers will pop in and tell you which direction to go as far as contracts, patents, etc. The regular site is www.freeadvice.com
I use them a lot when getting info about getting my medical records from docs that are pains in the butt about giving them to me.
You ARE aware that it is illegal to sell food products that you make in your own kitchen? It must be made in a commercial kitchen that has been approved and inspected by the health department. The commercial kitchen will also provide information on how to safely process the food. I know, I developed a killer BBQ sauce and found the process was so complex that in the end, I sold the recipe to one of the big food processors. Containers, processing and ingredients all must be approved by the FDA or you can get into a lot of trouble.