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Business Bits - Wholesale

Monday, May 10, 2010

Topic: Wholesale

At first I thought landing a wholesale account was like a stroke of luck for my little business. But, I was wrong. Sure, it can be an exciting occasion ( I have indeed cried upon seeing my items on the shelf of a well revered shop) but offering wholesale is a decision to be approached with much forethought, strategy, & long-term planning....with much consideration to pricing - as mentioned in earlier Business Bits Post on Pricing.Without doing some homework you're bound to lose serious time & money.

A few things to consider while exploring wholesale:
- Be confident: you can choose the shops just as much as they choose you.
- Consider your ultimate goals: Establish your brand? Make more money? Are you trying to go global? Get into stores as a means of marketing? Then this will guide which (if any) stores you'd like to go with.
- Ask questions: remember this is your brand & right now you have control over where it ends up.
-Be honest (with yourself!): Can you , and more importantly, do you want to fill an order of 200 items? (in a given amount of time) For some crafts that can be more like a factory than handmade....
- Be Real with the numbers: Can you even afford to offer wholesale at the prices your items are set? (Remember wholesale prices are anywhere from 30%-50% of retail price...usually 50%)
- Decide what to offer: many shops only offer wholesale on certain items or design a separate line of wholesale goods (e.g. I do not offer my embroidery or specialty bags at wholesale- just not cost/time effective)

So....you've thought about wholesaling & are excited to make contact with shops...now what?

-Be Prepared: From my experiences buyers/owners respect that while you may be a small fry & not have all the answers as you begin this process- you're professional & willing to make a major effort. 
Here's some things you need with you in a meeting/ correspondence:
  • line sheet:  clear item titles, retail price & wholesale price (you will leave this with the buyer so include your contact information as well)
  • item samples:  show your handiwork along with enough info tucked away in your brain to answer a myriad of questions
  • minimum policy: what do you require for the minimum $ amount and minimum number of items purchased ( two items at $10 each does not a wholesale order make....)
  • terms:  how long will you need to complete an order (lead time) how do you expect payment (half up front for first order? COD -cash on delivery? some shops use "net 30" - they pay you 30 days after shipment is delivered.... personally, I would only allow this for larger, established shops)  *note:  an estasblished trust with the company should greatly affect your terms - they don't need to be the same for each account.
  • shipping & delivery: estimated costs, hand delivery, etc.
  • general policies: under what conditions to you accept returns/exchanges? (if at all)
  • order form: you can create one easily - space for item title, quantity, style/pattern/color, price discussed at meeting
Feeling all set now? Probably not. That's okay. It's a decision to be taken seriously & reevaluated over time. I would love to hear of any other wholesale tips, I'm sure I missed a bunch. Do share your experiences!

While you're sitting there with your cup of coffee & notepad out...go ahead & take a peek at these must read posts on wholesaling:
How to Wholesale from the Etsy Blog
Preparing for Wholesaling from the Etsy Blog
Wholesale vs. Consigment from Craft MBA

1 comment :

Monkey + Seal said...

Great run-down Allisa! A good overview for anyone interested in taking a crafting business to the next level!