A couple of weeks ago I was asking around on twitter about what I should be putting on a wholesale price list, this started a flurry of tweets around wholesale in general, including what kind of prices to offer, what benefits there were, how to approach shops etc. Here’s a concise, but hopefully useful article explaining some of the most important points of wholesale dealings, including some advice from fellow makers and incredibly handy tips from Hannah Zakari‘s owner, Rachael Lamb. As always, I’m going to be speaking from my own experiences, so if there’s anything I touch upon in this article that I haven’t personally had to tackle then I’ll mention it! :)
So, what’s wholesale?
Wholesale is where you sell a whole bunch of your stuff for a cut-down price to another store or outlet. Generally, payment is received up-front (unlike sale or return) and then the items belong to the store/customer.
You mean… we don’t get as much per item?!
Nope, the entire point of wholesale is that the shop makes their cut as well. That’s how bidniz works, baby!
I touched a little on wholesale pricing in my Rockstar’s Guide to Product Prices article, but just to recap…
Your wholesale price is the price that you will sell your items at to shops. Shops will then increase the price of the item so they can make their profit. Each shop is different, but most will simply double your wholesale price. Larger shops will need to add more to that price because they’ll most likely be VAT registered, and certain shops feel they can increase it just because of their status, ie. I think Liberty increase by 2.5-3.5 times. I don’t stock any super big shops, so I can’t say for certain how wholesale does differ here.
Getting your wholesale price right is very important. You still want to be making profit on your wholesale no matter what, so if that means you can only decrease your retail price by 10%… then you need to change your retail price or find a way to dramatically reduce your costs. Make sense?
Some people like to tier their wholesale prices based on quantity (10-20 items gives a 30% reduction, 20-30 gives a 35% reduction etc), whereas others are pretty cut and dry and just go with a single wholesale price. I’m of the latter camp, along with a minimum order total for new stockists.
You might be thinking “well, why would I want to sell my things for less?!”… Volume, baby, volume. A nice juicy wholesale order will help fund a brand new idea, keep stock rotating & ensure that you have a nice cash-flow in your business. You might not be making as much per item, but you’ll end up (hopefully!) making more by selling in bulk. And let’s not forget the fact that you’re getting your name out there! Win-Win.
(If you have any other questions about wholesale pricing, please ask away in the comments!)
Remove hurdles, make it easy & find some stockists
A lovely shop owner is browsing around for new things to put in their pretty shop. They get to your website and… be still, their beating heart! They LOVE what you make and decide they want to enquire about your wholesale prices. The first thing they’re going to do is check for a wholesale area on your website, isn’t one? Fine, they’ll check for a contact form… nope? Damn.. email address? Erk… move on.
You just lost the game.
Make it SUPER easy for stockists to know that you’re ready and available for wholesale orders, I don’t mean that you need to show a wholesale price alongside every item, or that you need giant flashing red lights saying “STOCK ME! STOCK ME!”, but make it easy for people to contact you about a potential wholesale order. Then be ready and waiting with an informative response about your wholesale prices and terms.
Up until a couple of weeks ago I didn’t have a wholesale price list as such, I basically just used to tell people that my wholesale prices were 50% of the prices on my website. It was easy, simple, and worked. I’ve graduated to a price list now though because some of my items aren’t available for wholesale (short lines, website specials etc.) and I wanted a better way of getting that information across. I also wanted a price list so that I could explain about shipping (who pays it, and the methods available), minimum order totals and estimated delivery times.
Another thing you’ll want to consider and discuss with any stockists is what they expect in terms of packaging for your items. Each shop is different, some like to use your packaging with the items, and some prefer to use their own.
You already sell on your own website, should you wholesale to other websites?
Hell yes! There no reason you shouldn’t! Different websites have different followings, I successfully sell through several web based stores and everyone gets their fair share. One website won’t get the exact same following as another, and people have allegiances with certain online shops so they’re more likely to shop there. Ah, the internet, it’s a wonderful thing!
Manage your stock, time & sanity
Oof, now, I know I said a nice juicy wholesale order is damn good and all, but PLEASE make sure that you know you can handle it! Ask yourself these questions if one of those big, fat, ‘I can totally retire on this’ orders comes in:
- Do you have all the stock at hand? if not, how long with your suppliers take to get your the materials to create the stock.
- Do you have the time to get this order together?
- Estimate accurately how long it’ll take, tell your customer this.. Pull a Scotty and overestimate, delivering before your self imposed deadline is always impressive.
- “She cannae do it Cap’n, I’m givin’ her all she’s got!” – “Damnit Jim, I’m a crafter not a machine!”* Admit defeat. If you can’t come through in a reasonable time then just tell the customer. Tell them what you could delivery, though, they’ll probably still be interested!
*Sorry, this just got really trekky..
Take it away, wholesale heroes!
I asked a couple of my fabulous business running pals if they’d like to share their take on wholesale!
First up, the lovely Claire from Miso Funky on why she values wholesale clients, pitfalls to avoid and her advice for newbies…
My first foray into wholesale was with a new gift shop setting up in the south of England. It was fairly early on in my career and with hindsight, I played it all wrong. I completely undersold my work and ended up making a loss. The stock sold well, so I had to gradually increase my prices to bring them into line with my “proper” wholesale prices eventually. Lesson learned! Price setting is the be-all and end-all in my opinion.
The best aspect of wholesale for me is payment up front for the goods. There’s a definite number of items to be made to a deadline and delivered and the onus is not on me to then sell them on my website – the customer is going to do that. I also like the thrill of securing a new stockist, especially when it’s one I’ve coveted! I used to sell sale or return a lot, but I found it hard to keep track of who had what and what money I was owed. I also had a few bad experiences with shops closing and not returning stock or things coming back damaged. Now I have only one sale or return stockist who sell loads of my work on a monthly basis, so I don’t mind the investment with them. Sale or return is a means to an end, in my view and outlives its usefulness as your business grows.
My top tip to anyone wanting to set out in wholesale is SET YOUR PRICES AND STICK TO THEM. You must ensure that you work out prices correctly and don’t be swayed from them. I know that my wholesale prices are pretty much at the pricier side of reasonable but they have to be to ensure I make a profit. Make sure you don’t weaken if you’re asked for a deal and end up out of pocket.
I have a small group of shops who regularly buy wholesale from me and they provide me with a regular income over and above my web sales. I find they are a good sounding board for feedback on new designs, colours, etc, too. I’d like to expand my wholesale stockists so I am exhibting at Pulse in London this June to meet buyers in the flesh.
Next up let’s hear from Marceline, the brains behind Asking For Trouble, Marceline has some awesome ideas on making it easier for your stockists to stay in the loop…
I have a retailers site – basically a blog – where I upload images and basic details of all my products available for wholesale. This stops people requesting products from my main shop that are limited edition, being discontinued or not profitable for wholesale. It also lets me put up pre-order information for Christmas products etc. since shops work much further ahead than most of my customers. It’s handy to email to new stockists and for current stockists to check for new products.
I think a mistake a lot of people (including myself sometimes!) make is to bend over backwards for wholesale orders because we’re so excited about it. I have pretty strict rules about which products are available wholesale, how many of each a shop needs to order, what the minimum order is and who pays for shipping, and outline that all in my FAQ page. I can bend the rules if it makes sense for that shop but they know upfront what my terms are.
I find it’s best not to have my url on packaging at all. People can easily find me from googling Asking For Trouble so there’s no real need and shops seem to much prefer it.
So great to hear from other people about their experiences with wholesale, isn’t it? I’m learning stuff here!
Let’s hear from the super stockists!
Finally, I’m super happy to include some extremely useful information courtesy of Rachael from Hannah Zakari. Lots of Finest Imaginary things have been available at HZ for a while now, and Rachael is one of the nicest shop owners to deal with. Hopefully some of this information will make her job a little easier, too! Take note!
1. Is the price right?
This is the most obvious thing to get right and the most annoying to buyers if you get wrong. There’s nothing more frustrating than contacting someone who invites wholesale orders only to find out that they will only give you a 30/40% discount. If you want to sell your items wholesale then you must be able to give at least a 50% discount and if you’re hoping to sell to large stores then the discount will be much higher.
I know exactly how difficult it is as a one wo/man show to get your pricing right, I also make and sell a collection of my own, but if you feel you can’t discount your items enough for wholesale then just say so. Stockists may still want to buy from you, but rather than stating that you sell wholesale, say that you can give a discount of say 20 – 30% (or whatever) for retailers. At least then they know where they stand from the beginning.
Another tip is to introduce a tiered pricing structure. For example, order 10 items get a 30% discount, 20 items get a 40% discount, 30 items get a 50% discount. It’s a great way to encourage a higher order value if you really don’t think you can afford 50% on small orders.
Think you’re going to miss the 2 week delivery deadline you set yourself? Is your supplier being slower than usual? Had a holiday offer you can’t refuse? Communicate this as soon as you realise. I think most buyers will be cool about it, but what they won’t be cool about is being left in the dark about what’s going on.
Packaging needs vary from shop to shop, my preference is for a designer to supply items without packaging, mainly because it keeps my display options open in the shoppe and also because I like to use Hannah Zakari tickets where possible. Ask your buyer what they prefer, it can save you a little money and time if they don’t need packaging.
However, you still need to make sure your items arrive with the buyer in tip top condition. My favourite way to receive jewellery is indvidually packaged in a small zip lock bag, and in the case of necklaces, with the clasp hinged between the zip to avoid tangling. Package inside a box for strength with plenty of bubble wrap, include an invoice and always send by registered delivery.
PS Our tickets have the HZ website address, a barcode, price and the designers name, it’s a fair bit of info for such a tiny piece of card.
4. Let the buyer know all about you.
I like to do my research into a designer so I can then pass that info onto my customers, I like it when that’s made easy for me. Did you arrive at your craft through an interesting route? Do your pieces have a back story or some history to them? Do you use an interesting technique to create them? Are there special care instructions? This is all information that it’s important to pass on to customers, plus I find it interesting too so tell me about it!
5. Do your research.
If possible visit the shops you’d like to sell with and check them out, can you see your work fitting in well? Be objective – it’s a nice shop and you make nice things, but do they make a good match?
Have a look at other shops in that area, which one do you like best – decide and then approach that shop only. If they don’t want to stock your work then you can move on to the next (but don’t tell them that they are your second choice!).
My recommendation would be not to take your work into a shop with you, I personally find it uncomfortable having to assess it on the spot . Have a chat with whoever is looking after the shop (they might not be the person who makes decisions) and leave a business card or postcard with your contact details, website and an image that represents your work. Remember that decisions will be based on your work alone, so don’t be ott or leave gifts. Follow your visit up with an email and then wait…
I’ve been running Hannah Zakari for nearly 8 years now, and I’ve seen designers approach wholesale in many different ways, some better than others, and it doesn’t end once you’ve sent the order! Once you’re in there, be sure to send regular (like once a month) updates on new products, keep them updated if you’re going away on holiday for ages and see if they will need things to tide them over. Simple things like this will keep the lines of communication open which is always a good thing and ultimately will lead to a very good and profitable relationship for both of you.
So, I really hope this has helped at least a little! If you have any questions on the subject you can leave them in the comments section and I’ll do my best to give a speedy response.
So there we have it! A not-so-concise look at the world of wholesale. If you have any questions relating to any of the above, or basically anything to do with wholesale, then please leave a comment below! I’ll do my best to answer :)