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Hard Truths About Wholesale (2 of 3)

Wholesale is a possibility, but it isn't for everyone. There are some hard facts to swallow about wholesale. Wholesale isn't for every business and that's okay. Read on to find out more about some of the cold hard truths of selling to shops.

1. Do the work of pricing your work correctly, before you approach us. 

Pricing is hard and takes time to get it right. If you're just starting out, it will probably hurt to see what you have to charge. You may have to adjust your pricing structure if you've only been selling direct to consumers and now you want to sell to shops.

Make sure that you know your pricing before approaching a shop. If you ask me to tell you what I'd pay for it, you haven't done the work of figuring out your pricing, and your feelings will be hurt about how much that item would sell for at wholesale. 

2. Stores will want to purchase your items for 50% of your suggested retail price.

If you have been selling your widget for $10, shops will expect to purchase that item at least 50% off the retail price. If it costs you $6 to make it, your pricing structure is wrong for wholesale and you'll be losing money. 

50% off of the MSRP often feels like a lot to makers the first time they hear it.

Shops have to charge what they do to cover the costs of rent, employees, and profit. The overhead of a brick and mortar is significantly higher than online sales. But, the experience is worth it. Educated sales folks will tell the story of your product, display your items beautifully with other related items, and your product will be for sale anytime a customer walks through the door.

Once you sell your items to a shop, it's their responsibility to sell it, handle breakage and theft, and discount it if it's not moving.

You don't have to worry about anything but cashing your check, making more awesome product and checking back for reorders.

3. Always sell your item online for the same price (or higher) than the suggested retail price you sell to your shops.

If you tell a shop your MSRP is $20, then you better sell your item for a minimum of $20. If you sell an item to a store with a $20 MSRP, but you still sell your item (especially in the same town or online) for $15, retailers are going to be mad.

4. You may not be able to wholesale all the items you make.

For instance, I used to make laundry soap. The cost to make laundry soap was $6 per jar. Which means my wholesale price would need to be $12 and my retail price $24. That was too much for the market to bare. I still made it, and sold in my shop, but couldn't afford to sell it wholesale because it wouldn't be profitable.

5. Make sure that your branding is on point before approaching shops.

Your collection should have a "look" to it. We want to see jewelry or body care products that look like they go together. Your packaging should look professional, even if you're printing them at home. If you're not sure what to do, hire a designer, it's not as expensive as you might think. There are lots of great online resources to get you started. 

Great packaging sells products!!!!

6. Shops know what sells well for them.

Shops may already have something in the shop that fills the niche you want to fill. Likewise, your branding or item may not be quite the right fit. It doesn't mean there's anything wrong with your product, it just means that another shop might be a better fit for you. For example, we aren't spa-like, farmhousey or new agey. If your product falls into one of those categories, it's probably not a good fit for us, but there are oodles of stores that could be.

7. Working with shops is a partnership.

We love it if you can provide artist information and respond to feedback about how your items are selling in our store. We also love it when you post about our shop and share it with your communities on social media. If you have ideas for how to display your merchandise or tips for how to sell it, those are welcome too. We've found that sharing our customers is a win-win for both of us!

8. You may not hear back from shops. Don't take it personally.

Try as we might to answer every email, dm, etc., we just can't get to them all. If we are interested in your brand, we will get back with you. Sometimes we express interest in learning more, but the timing isn't quite right. There are some brands I keep on my radar for a year or more before making a purchase.

9. Make it easy to order.

Have a price list or photos. Let us know what website or email to use to order. It doesn't have to be a fancy wholesale website, even an informative email that includes pricing works.

10. Make sure that you are ready to make or sell the item you want to wholesale.

With few exceptions (like special order pottery) I expect to order and get the product within a couple of weeks or less. If it's going to be longer, please don't expect the shop owner to pay more than a deposit before you start work.

Selling wholesale to shops is grinding hard work. You're going to hear a lot more nos than yeses.

Read the next post to learn about Wholesale DON'Ts to Keep You From Alienating Your Prospects.

 

 

 

 

January 14, 2019 by Jennifer Frech

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