Do you want to start selling your handmade products wholesale to brick and mortar stores?
Keep reading because in this post I'm going to share with you what you need to know before starting your wholesale business.
Hi, my name is Mei Pak, and I help makers, artists, and designers create a consistent income selling their handmade products online.
The first question you're going to need to ask yourself is, can you handle producing quantities of more products?
This is the nature of selling wholesale.
What we're normally used to when we have an online retail store is selling one item to one customer. When a wholesale buyer comes to you, like a physical store on the side of the street, or an online store like Anthropology, then they're buying multiple quantities of multiple designs so that they can resell them to their customers.
If you're feeling unsure if you can create your products in that kind of scale, ask yourself: can you work faster or more quickly?
If the answer to that is no, then how can you work more efficiently in a more streamlined way?
Ultimately what you want to do is create your products in bulk. If you can't do that then maybe, later down the line, you might want to hire other people and train them on how to make your products.
The second thing that you're going to need to check is if your pricing is set up correctly for wholesale.
So, how can you tell if it's correct or not?
A very easy way to gauge is to take your existing prices that you're selling your product for, for that single customer where they are buying just for one item, and divide that by two. That's going to be your wholesale price.
So for example, if you currently sell a necklace for $20 retail online, then divide that by two you're going to have to sell that product for $10 wholesale.
That's just the expectation.
Remember, the reason why it's divided by two is because your wholesale buyers are going to take your products and resell them to their customers.
And running a brick and mortar physical store, it's very expensive.
So they going to need to make some profits from selling your products too, that's how source works.
If you price correctly you should still be able to profit at least $5 from that $10 wholesale products.
Yes, it is smaller profit margins, but remember you are selling in larger quantities so where you might be selling one item for $20 then maybe making a $15 profit, you're probably making a $150 wholesale order selling 10-15 of that same product to a wholesale buyer and then you're profiting about $50-$75 from that.
Don't worry if you can't sell your products for wholesale that's half of what your retail prices are currently set to.
All you need to do is revisit your pricing and then increase your retail prices to make your wholesale prices make sense to the wholesale buyer.
The Marketing is Different
What you need to know is that marketing wholesale is going to be a very different game than marketing retail.
These are two types of customers that require different strategies to communicate and market to them.
I know entire businesses who only do wholesale, or only do retail, and I've done both at very large quantities, so I kind of have a sense for how different they are.
If you're doing retail only think of it more as if you're marketing one to many. You need to have a lot of customers to sell a lot of products and make a lot of money.
But if you're selling wholesale, you don't need a lot of customers you just need a small handful of them because, remember, they are placing very large orders with you.
Just knowing that that means the way you communicate with them is also kind of different. The way you communicate to wholesale buyers requires a little bit more like a high-end customer service touch.
I just want you to be aware of that so that when you're getting into this, or at least when you're deciding if wholesale is right for you, you can know what your strengths are.
I do know people who are better at doing that one-on-one interaction with people whereas when you're doing a one to many, when you're selling retail, you can feel a little bit inauthentic or kind of fake or awkward.
Just know where your strengths lie and that will help you understand better how to create a strategy for retail versus wholesale.
I have a question for you which of the points that I've just talked about is something that you need help with. What do you have questions about, currently about what you need to do to start selling wholesale? Let me know in the comments.
Let me talk about a few things that you might want to include in a wholesale package.
Line Sheet or Catalog
The first thing is a line sheet or a catalog.
A line sheet or a catalog is basically like a document with multiple pages in it. It has pictures of your product usually on a white background, the product name, and the product prices.
So it's like a condensed version of your online website, but in a very concise manner so the buyer can just quickly flip through the pages to know what products you have that you're offering in your wholesale collection.
It also includes other information like the mentions of the size of your product, as well as the price list.
Terms & Conditions
Other things that you might want to include in your wholesale package is your terms and conditions. You have to decide for yourself what you're going to do in case there's a return that the buyer needs to exercise, if there's an exchange they would like to make, or an items break during shipment.
Think about returns, exchanges, and refunds and what your policies are. Make them clear and upfront from the beginning so all parties know what to expect in case things like that happened.
Your terms and conditions will also include information like what's your minimum order amount and what's your reorder amount. You want to make sure wholesale buyers can't just buy one item from you and get to have that discount.
Those are a few dollar figures that you need to decide as well and include that in your wholesale package because that's the information that your wholesale buyers want to know from the get-go.
Other things you might want to include things like your turnaround time, your shipping time, your shipping fees, and also an ordering sheet.
You might have different packaging when you're selling retail versus when you're selling wholesale.
If someone is just buying your product, a necklace for example, from your website and it's a gift you might have different packaging versus when you're selling to a store.
A store needs to display your product on their shelves and you need to account for that. If your packaging is not set up for a physical brick and mortar space to display on shelves, it's not going to sell. With foot traffic in a store, customers need to be able to see, touch, feel maybe even wear your products.
The packaging that you set up for that needs to be conducive to that kind of environment.
Maybe your product packaging is the same for retail and wholesale and that is totally fine too. But it's still something to consider for your products.
This is a big one for peopel who sell children's products. You might want to consider getting product testing done and labeling set up for your product packaging.
It is very expensive to get product testing done.
Every material and supply that you use to make your end product needs to meet certain criteria just for the safety and health of children.
There are very specific rules for that and if you're selling a children's product you just have to be careful and aware that that is something that you need to be done, especially when you start selling wholesale to a lot of stores.
You might also want to consider getting liability insurance just in case anything happens.