flying twigs

Here’s how to work out the price to sell to shops. Our retail price is £2.40. If we were to sell to shops, then we would sell at a lower price, but of course shops would buy many designs and many of the same card. They will buy in multiples of six. Why six? Well that’s the number than publishers tend to sell to shops at. And shop buyers generally buy in those multiples – such as twelve, twenty-four, or forty-eight of each design.

With that in mind we can look at the price. And just to explain that people in the trade user the word publisher for the business that designs and makes the cards. That includes us at Flying Twigs.

Shops can decide their own price that they want to sell to customers, but let’s say that they sell at £2.40. Shops pay VAT, which is 20%. So charging £2.40 means £2.00 plus 40p VAT. So then shops think of the price they will pay the publisher relative to that £2.00.

They aim for a 100% markup – so they will want to buy from publishers at £1.00 per card. Or less if they can negotiate that.

Now look at it from the publisher’s point of view. Cards are cheap to print. But then they have to be creased and folded. Then there’s the envelope and the cellophane wrapper. And then there’s the cost of transportation, which can knock a hole in any profit.

The publisher could tell the printer to print and crease the cards and deliver them flat. And the publisher could buy envelopes and cello wrappers from the cheapest source, which is usually not from the printer.

Then the publisher could fold the cards, put them with the envelopes and into the cellophane wrappers and then send them on to the shop.

That’s labour intensive but it’s cheaper than getting the printer to do it all.

But the downside is that the publisher then has to pay twice for transport. First is the transport from the printer to the publisher. And then there’s transport from the publisher to the card shops. If the publisher got the printer to do everything then the printer could send the cards direct to the shops. That would save delivery costs for one journey. But then the publisher is paying the printer to fold and package the cards.

However you slice it, the publisher has to pay a delivery cost. And that eats into profit. They can pass that onto the card shops but then negotiating the price for the cards themselves becomes a tougher exercise.

You can see that the bigger the order the smaller the problem of delivery costs. Delivery costs are fixed. When the delivery cost is spread over a greater number of cards the actual cost of delivery per card becomes less significant.