There has been much confusion regarding the differences between popcorn manufacturers versus popcorn wholesalers. Depending on your business goals, you may require the services of a manufacturer or a wholesaler. This article will explain the differences between a manufacturer and a wholesaler, and the pros and cons of both.
A popcorn manufacturer produces popcorn in large quantities for distribution through several retail channels. A manufacturer can produce products under their own name or allow for white-labeling (also known as ‘private labeling’), which allows companies and other brands to promote popcorn using their own brand name and/or logo. Manufacturers are typically licensed within the states they operate in, and those that distribute nationwide are registered with the FDA.
A popcorn wholesaler produces popcorn under their brand name, and distributes it in large quantities for resale. White-labeling is generally not allowed, and although they are licensed in their state to produce the product, they are not likely registered with the FDA.
The Rule of Thumb when it comes to Manufacturers and Wholesalers is:
All manufacturers are wholesalers, but all wholesalers are not manufacturers
Which One is Right For Me?
Again, depending on your business goals will determine which type of supplier you should go with. Lets start with two examples:
- Example A: Mark is a young entrepreneur trying to build his own online popcorn brand. He does not have equipment nor expertise to get into the gourmet popcorn business, but he knows a good niche when he sees one.
- Example B: Stephen is the owner of a specialty store that sells several flavors of beef jerky. He wants to offer his customers another snack option at checkout. He wants to sell a popcorn brand that is popular in his area.
What Do I Need In Each Case?
When working with either a manufacturer or a wholesaler, it is ideal to have a business license, a tax ID number and a state sales tax permit. You will need a tax permit in most cases to conduct Business to Business transactions (which are not subject to taxation). Also, none of these business types will give you wholesale pricing without it.
- A list of all the ingredients.
- Nutrition facts (check your state for requirements).
- The net weight of the individual unit.
- Address of the manufacture location.
Optionally barcodes and “best sold by” dates can be added, as some retailers require them for inventory tracking purposes.
What Questions Should I Ask?
When talking to either a manufacturer or a wholesaler, you should ask the following:
- How is your product made (examples: air popped, cooked in oil)?
- Do you use NON-GMO kernels?
- What quantities can you produce?
- How much notice do I need to provide before placing an order?
- How and where do you ship?
- What is the shelf life of your product?
- Do you offer vegan or gluten-free flavors?
- Do you have nutrition facts on the labels or your website?
- May I request samples?
- What sizes or net weights is the popcorn sold in (typically sold by number of cups)?
- What is the wholesale cost per unit/size?
- What is the MOQ (Minimum Order Quantity)?
Asking these questions can eliminate a lot of potentially negative surprises, and can save you both time and money.