Is this bad form? (Business related).

[AhMustardMitt]

I make a food product. Someone a couple of hundred miles away makes a similar product that contains some things mine doesn’t, and missing some things that mine has.
This person sells their product far cheaper than I do. I would barely cover ingredient costs to sell at the same price.

Would it be a poor show to buy in bulk from this person, add my ingredients and sell it as my own product?

We would not be in competition with each other due to distance.

Why is theirs cheaper? It must be inferior in some way? Unless they have economy of scale and are churning out tons?

Yes, yes it would 😲

Be straight with them and see if you can do a deal. They might be happy for the sales regardless of what you then go on to do. Also be transparent with your own packaging about where the ingredients come from.
To do it 'secretly' would be wrong.

I think you could have an issue regarding allergies and the such as their product may contain nuts / other allergens even if listed as not and selling as your own product would make you liable if one of your customers had an issue.

What’s the price difference?

On the face of it I would say it is wrong but I think a lot depends on what the product is and how you can change it to make it yours .

Part of me thinks it would be a bit like buying a cake packet mix adding a egg and claiming you carefully sourced all of the ingredients.

But part of me thinks if s/he makes money from the sale to you and it makes it easier for you to make the end product then you both win.

So I am bugger all help !

it would be illegal and you would be liable to prosecution under food laws.
how do you not know this.
have you registered with the local authority as a food producer. also an offence not to do so.
how are you marketing this product.

does it comply with all food labelling regulations, have you had it analysed by a technical expert as to ingredient nomenclature, quantity marking, batch numbers, security seals, etc.
what advice have you had from local environmental health and trading standards enforcement.

I wouldn't say it's wrong, because once you buy something its yours to do as you wish with.

But, if you can't be 100% sure of the ingredients or their quality then you could come a cropper.

Lol

I can just imagine you getting exposed and being cancelled online

Obviously bulk buying will set alarm bells off for them, they’ll be looking out for this

Good luck on your road to bankruptcy x

Just approach them as you would any other supplier. They might even make your product for you with the ingredients you need. Then you are responsible for sales and marketing of your own brand. Standard business practise, nothing dodgy at all.

@alexdgr8

it would be illegal and you would be liable to prosecution under food laws. how do you not know this. have you registered with the local authority as a food producer. also an offence not to do so. how are you marketing this product. does it comply with all food labelling regulations, have you had it analysed by a technical expert as to ingredient nomenclature, quantity marking, batch numbers, security seals, etc. what advice have you had from local environmental health and trading standards enforcement.

It’s not human food (sorry, I’m a twat for not clarifying )and I’m not in the UK

I have all the necessary permits and insurance.

They are about 45% cheaper than me, and I’m lower end of the price scale. I don’t know how they can be so much cheaper. I have to buy my products from a source, they may well be their own source.

I hover between thinking that they are in business to make money so does it matter what happens to the product once it’s sold and is it any of their business, and also thinking it’s better to try and come to an arrangement with them.

I don’t really understand the issue. Lots of companies do this all the time, although you will need to be upfront, perhaps negotiate a wholesale price otherwise they’d soon notice if you randomly started ordering 100’s of units. This can be a win, win for both parties and there’s certainly nothing dodgy about it as some have suggested.

@SpaceRaiders

I don’t really understand the issue. Lots of companies do this all the time, although you will need to be upfront, perhaps negotiate a wholesale price otherwise they’d soon notice if you randomly started ordering 100’s of units. This can be a win, win for both parties and there’s certainly nothing dodgy about it as some have suggested.

Yeah, I do think the quantities I would order might ring alarm bells.

I am worried they might tell me to piss off for swanning in and buying loads of their product and making a profit after they’ve put all the work in. I don’t know why they don’t charge more. If someone wanted to buy my product and sell it for more hundreds of miles away I’d tell them to fill their boots, because i’d still be making money but I wouldn’t be able to charge more for it where I live.
My profit would be less but the time I would spend making the product would be substantially reduced.

They're either cutting corners somewhere with cheaper ingredients or they're not pricing their product appropriately, either because they don't think people will pay the full price (lots of small scale food production looks alarmingly expensive when all costs like a wage for the producer and postage are factored in), they're trying to build market share and will increase prices later on or they just haven't thought about the business/pricing side of things properly.

Not everyone does - they simply think 'I could make and sell X' without an actual business plan, either because they don't actually need to make a wage (hobby business) or they start from the point of view of 'I like this product and think it should cost X' so sell it at that price.

Without knowing what the product is, it's hard to say whether your plan would be a good or bad idea, but you might find that they can't supply the quantities you want to make it worth your while anyway.

On the face of it seems fine

Loads of companies do this with various grades of ingredient :

Buy wood cheeseboard - company add decoration to it

Buy dried flowers - arrange them on wreath

Buy fancy artisan flour - make food with it

I don't see how it's different - they supply the 'ingredient' - you make something with it ...

There are lots of reasons they would want to work with you.

1. Economies of scale - the more they make, the cheaper they can make it and the more profitable they become.
2. Using any spare capacity they have in equipment and staff will also make them more profitable as at contributes towards their fixed costs.
3. Competition drives market growth. Think of gin - a few years ago all you could get was plain gin. Now the market is full of different types from loads of small companies - they didn't take market share from plain gin, they created a new market that all the companies have benefited from.

Just talk to them - you don't have anything to lose. They will just say no if they don't want to do it.