Head Bitch in Charge asks about wholesale—

I'm finally growing my business to the point where I need to focus more on wholesale. I'm overwhelmed with all the options I have and choices to make. Mostly with things like minimum orders, how to bundle things (sets of 2 or assortments of 6?) and the best way for retailers to contact me and order. How have you handled growth and what were some unexpected hurdles you faced?

I'm probably as overwhelmed with the subject of wholesale as you are. Most of my non-retail sales have been (and still are) consignment, although I do have some wholesale accounts. One of the problems I have is that most of my products are one-of-a-kind and that can be a hard sell to shop owners who need to know exactly what they're getting. I can sell them two dozen zippered bags, for example, but I can't say exactly what the fabrics will be. Although, if they wanted all florals or stripes or whatever, I can tailor my fabric choices to fit. All of this involves a certain amount of trust and flexibility.

Minimum order amounts are what feels right to you. I'm OK with a dozen of my smaller items—wallets, tissue cozies, zippered bags—although I find most shops will order two dozen at a time. Shop owners know that small items look best grouped together—like a basketful of tissue cozies. I sew them in multiples anyway because it's easier and faster, so this works out perfectly. For pillows, my minimum order is around six—but I'm not very strict about it.

I have a one-page folded paper catalog that I print out myself and mail to prospective buyers. The items shown in it are examples of styles and I'm clear that what they'll get will be slightly different. Because of this one-of-a-kind thing I don't have my website set up for wholesale sales like some shops do. Shop owners either call or email and we discuss details.

The biggest issue you need to think about with wholesale is pricing. People often start out selling on Etsy or their own site and have very low prices. Honestly, sometimes so low that I wonder how they're even covering the costs of their materials let alone the time spent making the item. But, when you sell wholesale, you only get half of the retail price. Can you still make a profit? If the answer is no, then you need to rethink your pricing. Or find a way to lower your materials cost, although you should be doing that anyway. Make sure your prices allow you to make a profit at wholesale. Then, if you sell on consignment, you'll make a little more profit (usually it's a 60/40 split), and if you sell retail you'll make still more!

One problem you may encounter is a shop owner who won't buy from you because you also sell retail. The concern being that you might undersell brick-and-mortar stores. If shoppers can buy more cheaply from your website, why would they shop at a retail store? So, you need to keep your prices consistent everywhere you sell.

I haven't been very aggressive with finding more wholesale accounts for a couple of reasons. If I'm saying that my products are one-of-a-kind and handmade then I want that to be true. I don't want to contract out my sewing. So, I don't want to get orders that are so large I can't handle them myself. And, because I use vintage materials which are limited in supply, if I get too big it's going to be harder and harder to make that work. I'll have to use more modern material (and I already do somewhat) and I'll lose the vintage charm of my products. I do admit that I may need to rethink this position in the future—we'll see.

Hopefully, this answers some of your questions. There aren't really any hard and fast rules—you have to do what works for you!

1 comment:

blushing rose said...

Good points. TTFN ~Marydon