mfs@edison.GE.COM (Synth Hacker @ Lost in the Mountains) (02/19/88)
For about a year now I have been advertising some of my software in a national magazine. Sales have been so-so, until recently, when I introduced my new wiz-bang product. Well, all of the sudden I have all these folks calling me up saying 'where can I get some of these widgets to sell in my store ?' I hadn't anticipated this kind of response and all of the sudden I am up to my eyeballs in orders and requests. So my question for all of the hard-hitting, heavy duty software authors out there is: Is there a standard discount that dealers of software expect for X number of packages ? How do you guys handle this kind of thing ? I know I could just haggle with these folks, but I don't want to give them the impression that they are getting burned and I don't want to look totally stupid (A very important consideration :-) I mean, if you don't count all the time (about 7 months) I spent writing the thing, it costs me about $5-6 to put together a package that I sell for $60. (I do everything at home; copy disks, print manuals, packaging and make numerous trips down to the UPS building.) So, what would be a fair discount for, say 10 packages ? Any answers, advice, comments or flames would be greatly appreciated. PS this is not Amiga software, although I have similar plans for my A500. mfs@edison.GE.COM
farren@gethen.UUCP (Michael J. Farren) (02/22/88)
mfs@edison.GE.COM (Synth Hacker @ Lost in the Mountains) writes: >Well, all of the sudden I have >all these folks calling me up saying 'where can I get some of these >widgets to sell in my store ?' Congratulations! Be prepared for a fate worse than death! (Well, not *quite* worse than death - at least you get some bucks out of the deal, maybe). >Is there a standard discount that >dealers of software expect for X number of packages ? The more-or-less standard discount is from 30% to 40%. If your package has a retail price of $60, for example, the dealers would expect to be able to get it for between $36 and $42. They might also expect further discounts (generally around 10% additional) if they order more than, say, $500 worth at one time. The problem - they will also expect you to ship it to them BEFORE they pay, although if you take a real hard line, you might be able to avoid this the first time you ship them product. Once they're a "regular" customer, they'll expect Net 30 at the very least, which means they've got 30 days before you have to start hassling them - which you will probably have to do to a lot of them. Also, don't forget that dealers will demand the right to return any packages that haven't sold, pretty much at any time, although most of them will wait for a while, at least. If you get a lot of sales, you might consider having a production service put together your package for you. It will certainly save you time, and possibly money as well. Good luck. Going from a small-time operation to a big-time (relatively) one is a lot of pain, but often worthwhile. Oh - these opinions derive from eight years experience in the software business, including following one startup from its two-employee stage to a million-dollar business (Epyx). -- Michael J. Farren | "INVESTIGATE your point of view, don't just {ucbvax, uunet, hoptoad}! | dogmatize it! Reflect on it and re-evaluate unisoft!gethen!farren | it. You may want to change your mind someday." gethen!farren@lll-winken.llnl.gov ----- Tom Reingold, from alt.flame