Let's Talk Business - To Wholesale...or What? Week Three

Wednesday, February 29, 2012

Hello, welcome to Week Three of our coffee chat series! Hope everyone is enjoying these talks. I know I am...really appreciate the conversations and all the insight and inspiration that follows. Today, there's a big juicy topic for us to discuss- wholesale.  This concern has come up so many times, in so many different ways....let's see if we can work it out a bit. 

So, a typical questions goes a little something like this: 
I'm interested in selling my patterns beyond Etsy. I'm starting with my Etsy shop. How would I approach online vendors to sell them on their websites as well? 

Does this sound familiar? Have you ever considered offering wholesale for your items? 

Well, there's a lot to love about wholesale I think. And there's also a lot of reasons to cross it off your list.  Yep, that's right. Wholesale is not for everyone. Somehow, as entrepreneurs we seem to think that it's the natural next step of growth. (I know I did.)  And it can be super exciting. But, it can also kill your business before you even get started. 

Let's discuss. 

Benefits to Wholesale

  • Establishes your brand in a particular market
  • Opportunity to share your products with more people
  • Possibly a very large order
  • Moves you into arena of making more efficiently 
  • Paid up front (or 30 days after) rather than consignment                                                                  
Bummers to Wholesale
  • Massive use of time
  • Massive use of resources
  • Massive use of energy
  • Potential loss of profit margin 
  • Another brand/shop/storefront speaks for your brand
Ok, so now what? What do you guys think about this? Anything to add to the list? 

My in-a-nutshell take on wholesale (after lots of experience, trial & error, success and heartache.....) is that it is NOT for every business. So rather than thinking of HOW to expand into wholesale, first consider whether you IF you should.

Wholesale works best for brands who can do ALL these things:
1. Positioned for profit.  (wholesale means you are typically selling your items at 50% of the retail price. If you have not factored this into your prices than, wholesale is a sinking ship.) 
2. Able to produce items on fairly large scale...still at a profit.  (think: printed stationery, art designs reprinted, patterns, etc.) 
3. Identify their target market. If you're offering your items at wholesale to the wrong crowd, what's the point?

Feeling like wholesale is a good match for your brand? If so, fantastic! I've written a post on how to approach wholesale accounts (line sheets and such...) that will hopefully make good use of my experience working with stores on a wholesale basis. 

Second-guessing the idea of wholesale? That is perfectly ok too. As I said, it is not for every business. It should be approached strategically. And if wholesale is not up your alley....then we can explore other options for growth. 

I'm really looking forward to thoughts/experiences/questions on this topic! I'll be around today....coffee in hand...and ready to chat! See you in the comments :) 

{recycled price tags from 42Things}

Missed Past Business Chats? Catch them here:
Week Five: The Art of Being Different with Tracey Selingo
Week Six: Identifying Your Target Market with Noisette Academy