Path: utzoo!mnetor!uunet!lll-winken!lll-lcc!unisoft!gethen!farren
From: farren@gethen.UUCP (Michael J. Farren)
Newsgroups: comp.sys.amiga
Subject: Re: Selling software to dealers - How much ?
Message-ID: <700@gethen.UUCP>
Date: 22 Feb 88 08:50:10 GMT
References: <1347@edison.GE.COM>
Reply-To: farren@gethen.UUCP (Michael J. Farren)
Organization: There's Unix there in Oakland
Lines: 41
Keywords: Standard discount ? Questions, questions, questions

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