Starting A Herb Shop East of Toronto
Answered by: Conrad Richter
Question from: Sandra Hay
Posted on: February 7, 1999

I am making plans to open a retail herb shop in April offering plants, dried herbs, related kitchen and garden accessories, and herb medicinals. Could you give me a little more information about the logistics of sending you a commercial order, how much notice you need, does everyone pick up at your location or would you have a truck going this general direction (east of Toronto). I see from your web page that commercial orders receive a specific discount; how do I identify my order as being commercial?

Sending us a commercial order is fairly straightforward. All incoming orders are scanned and orders for commercial growers and retailers are identified and marked. It does not matter if the order is placed by fax, mail, Internet, or by phone, all orders are examined and sorted in this way.

Commercial retailer discounts apply to orders from customers coded as "Commercial" in our database. This is why we ask, on our print and website order forms, for information on commercial or personal use. This information is entered in the database for reference on future orders.

The commercial retailer discounts are outlined in the back pages of the printed catalogue. There are not yet posted on the website, but there are plans to build a new section for commercial customers. Both our potted plants and seed packets are eligible for a 40% discount provided certain quantity minimums are met. For instance, retailers must purchase a minimum of 10 packets per variety, and 100 packets total to qualify for the discount.

As you are apparently close to our Goodwood location, you have the option of saving the shipping charges and picking up yourself. We prefer pickup orders to be phoned or faxed in at least a day ahead. It is not essential to send orders in ahead, but the waiting time is much less for you that way. When faxing orders in, please make sure that you mark the order clearly with "For Pickup on <enter the date>". That will help us to route the order to the right department in time. Please note that faxed order received on the weekend will not be looked at until Monday morning.

Delivery can be arranged. For seeds we ship using Canpar or UPS, and for potted herbs we can deliver by our truck. For deliveries by our truck, however, there are order size limitations: we cannot deliver small orders that would otherwise qualify for the wholesale discount. Please contact Cathy Avery at cathy@richters.com to discuss the availability of delivery.

Also in preparing my business plan I have found it very difficult to obtain suggested inventory levels for particular population levels, average annual inventory turnover levels to expect, and a range of anticipated total sales that would be associated with a particular population size. Would you be able to provide this type of information? I am making a presentation to a financial institution tomorrow and it would be very helpful to have.

Much depends on the product mix that fits your planned market position. For the plants and seeds we wholesale to retailers, the turnover is skewed by the fact that these products are seasonal in demand, with 90% of seed sales occurring between February and May, and 80% of plant sales occuring between April and June in the southern Ontario market.

What are the suggested inventory levels per 1000 population? We do not have that information. We doubt that anyone has this information for herb seeds and herb plants. We can give some guidance on which herbs are likely to be more popular than others, and therefore require more inventory, but, issues such as shelf life of potted herbs in less than ideal lighting conditions will dictate your inventory levels more than overall sales per 1000 population.

Another issue is how many varieties do you want to carry? Do you want to be known as having every conceivable variety, then that will affect the inventory levels because a minority of herbs account most of the sales. If you are planning to go with the most demanded herbs only then your turnover will be higher and inventory management will be easier.

For more information on how to set up a herb shop, we recommend that you get the book, "Growing Your Herb Business" (available from Richters). This book was written by Bertha Reppert, owner of one of the more successful herb shop businesses in the U.S., The Rosemary House.

You should also consider joining the International Herb Association which is a trade association comprised mostly of small herb businesses. The IHA holds an annual conference that is designed to help business owners. For more information, visit the IHA website at http://www.herb-pros.com .

Looking forward to sending in my first order. The property purchase is set to close March 1.

Good luck!

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