So, you have been making for awhile, and are ready for the next big leap onto store shelves? Our resident bath bomb guru, Alexis of Whipped Up Wonderful, has joined us today to share some wholesaling how-to's. Check it out, and don't miss her upcoming class at Dallas Maker's Space, Etsy Dallas Presents: Wholesale for Beginners + Q&A, for a more in depth look. You can sign up for the class HERE, and use "LEARN" upon checkout for a surprise discount!
Getting your toes wet with wholesale can be as simple as your local coffee shop saying “Hey! I love your stuff. Can I buy 20 pieces?” Or it can catch you by surprise when an out of state shop asks for $1,000 of merchandise as fast as you can send out. I’ve seen both scenarios, and it has taken me about three years to be ready for anything. Now, let’s get you ready.
1. Reevaluate your pricing
Let’s look at your pricing. A quick Google search will get you tons of calculators on the matter. They all boil down to a simple equation.
(Labor + Materials) x 2 = Wholesale Price
Wholesale Price x 2 = Retail Price or MSRP
Break out the calculator, and all the receipts and settle in. Draw up a cost sheet for your product. My cost sheet looks something like this:
Don’t forget to factor in the labels, packaging needed, or anything else that makes it a finished product.
How are these prices looking? If a necklace has a cost of $50, do you think that you could get a wholesale client to pay $100 for it?
This is a great time to assess making sure you are getting everything at the best prices. Are there corners you could cut and at what cost?
Let’s think ahead. You have a wholesale client who wants to buy 50 pieces, is there a price for 50 pieces vs 500? Consider tiered pricing. You may not need it for the first year you offer wholesale, but you will thank yourself later when you are in hot demand and have those prices at the ready!
2. Policies - I developed my policies based roughly on my retail policies, but they have changed slightly. It’s always okay to change up policies, but consistency instills confidence. Here is a list of policies I make sure I cover:
Minimum Order - What is the minimum amount you would offer to a wholesale client? There is no magic number as some stores have no minimums and some stores have thousands. Based on your price points in your store, what would be a nice amount to make a little section of a store looked filled out? I find keeping this out of the astronomical side makes me more friendly to Mom & Pop shops.
Minimum for ReOrders - would this be the same amount, or less? You want your client to keep shopping with you, and top up their displays. This is typically a smaller amount than the initial order minimum.
Exchange/Refunds/Damaged Goods - Unless you sell whatever that metal is that Captain America’s Shield is made out of, I guarantee you you will have some damages. They happen. What steps will you do to fix this?
What about unsold goods? Will you return them?
What will the shipping policies be on those decisions?
Again, there are no correct answers here, but I like to put myself in the shoes of the customer. I want to know that my supplier will have my back. If I’m treated well, I’ll shop there again!
Zip Code Protection - Some stockiest may have a shop in a small town. Will you zip code protect in case the shop 10 minutes away also wants to buy your stuff?
Perhaps only on shops that spend a specific amount per month/year?
Net Payment Options - Net payments is when you collect money when goods are delivered. Current popular options are Net 15, 30, 60 - which means if you ship out your goods, the store has 15, 30, or 60 days to pay. You may only want to offer this to repeat customers. You may not want to offer this at all.
Other Payment Options - Stockists usually aren’t giant corporations but rather Mom & Pop Shops. Will you offer any special options for your return clients? Perhaps deposits on orders then net options after delivery? Payment at time of shipping? There are a ton of options, and you’ll probably get asked for all of them! It’s okay to be flexible, but do what fits your company best!
Okay! We ironed out all that money stuff. Now for “sellin’ it.”
Because you are an online company, your customers rely on the photos and descriptions you provide. Look over your photos. Are you going to make them Amazon ready and photograph everything on white? This actually is a good default to have for your line sheet later. Which brings us to…
4. Line Sheet & Order Forms
Because everything is online now, I’ve never had to worry about a physical Order Form. However, you may have local clients who expect you to pop by and help them with their stock.
Line Sheets are an easy to read list of the products you offer and their price. Some line sheets even show the prices available in bulk tiers ($/20 $/100 $/100)
On Etsy, it’s easy to fill up a line sheet with your existing inventory. Or you can make one yourself.
5. Making Your Items Shop Friendly
Sometimes we get too involved in our retail customers. How you package your items for them, might not work in a shop setting. Look at your packaging. Go shopping for similar items. Consider the best way your items will be displayed. Where will the price tags go? Will they hang on a rack or will they be displayed in a jar? You are in luck if you have a local shop. Go to the shop, and discuss options with the shop keeper. Different shop keepers have different real estate options.
6. Follow up!
You’ve done all the work, you’ve turned on your ‘Open’ Sign, now what?
FOLLOW UP! Shop keepers are often very busy and are pulled in a lot of different directions. Following up on emails is a good way to keep you in their mind, and keep them coming back.
Send out restock notifications, new product notifications, and stay ahead of the holidays. Your client will appreciate your attention to detail and your enthusiasm for keeping them stocked.