Are you considering to start selling your handmade items by bulk to other online and physical stores?
Developing a strategy for marketing a wholesale line to other business takes work, trial and error, and time. The tactics that work for marketing to your online shop customers may not be focused enough to attract the attention of busy boutique owners who shop for new merchandise for their stores in very different ways.
Selling wholesale is a perfect way to sell your products and create a profit. Some of the many advantages are:
- You make to order knowing the products are already sold.
- You sell more than one item at a time and your production is more efficient.
- There is a potential for re-orders and developing an ongoing relationship with a store
- Make one set of samples and take orders from showing that set.
- Batching your orders for raw materials so you can purchase everything you need wholesale at a better rate.
There are also many other advantages – and in my opinion the best and fastest way to grow a profitable business is to sell items wholesale.
So how do you sell handmade goods to wholesale customers so that you can make a profit yourself without driving the cost so high that you lose sales?
Before you start to sell wholesale to retail stores that you first evaluate your current pricing. Your profit should be built in at the wholesale level.
If you were going to sell your products at a craft show or festival you wouldn’t display only $75 worth of items. Same goes for a retail shop – to give your products the best chance of selling to buyers there has to be enough to see!
Before you set a minimum retailers would buy the smallest amount possible and you would rarely hear from them again. Try having a $250 min (where the average price of a wholesale item is $11, for example) you will start to see frequent repeat business, plus each order will get bigger.
It is best to start with your cost of goods. This is determined by adding up all of the costs involved with making your product. Example, you’re making necklaces:
Create a spread sheet and write down all the materials in the necklace, such as beads, clasp etc. and determine what your costs are per unit (please bear in mind that you need to know the wholesale costs).
So if you use 10 beads at $1 wholesale each then your cost for beads is $10. Once you have all of these items – go back and make sure you add in other costs involved such as shipping charges that you paid to get the materials.
Next you want to pay yourself or someone else for labor. If you are making the necklaces yourself then you need to determine what you would have to pay someone else to make the necklace. Don’t forget about this! Some people do not think to pay themselves and this must be included in your cost of goods.
Your cost of goods will be your starting point for determining your wholesale price. There is no exact formula. You will need to do research to determine how much a necklace similar to yours will sell for in the retail market.
To understand this you need to look at similar products and go shopping. You may already think you know this – but it is important to get a fresh point of view because of the changing economy and perceived values.
2. Retailer Research
You can learn a lot about a retailer’s tastes through a quick website, blog and social media search. Look to see whether the retailer carries products and brands that are similar to or complement yours, if the retailer’s price points match yours and whether your customer demographic is similar.
Once you have your list of dream retailers, figure out how they want to be pitched to by checking their website or calling to ask if they have a protocol for submissions.
3. Sending Your Pitch
Before sending your pitch, make sure you’ve crafted a concise description of your brand and products and why you’ve chosen that retailer specifically. Keep your pitch “short and sweet,” with no more than three to four very short paragraphs. In your first line, introduce yourself and say how you found the shop and what you really like about it.
By doing that, you’ll help grab the retailer’s attention. But try to avoid the ‘I’m a great fit for your store’ line, and get creative.
With so many steps to take on your journey one of the best ways to “shortcut to success” is to follow in the footsteps of this ewho have been there and done that already.
Our friends and colleagues at Fourish and Thrive Academy have helped hundreds of jewelry artists transform their fledgling business into a thriving wholesale business with the “Mastering Wholesale Training” series.
You can take years to work out what Tracy and Robin have already laid out, or model your future on a proven system.
I highly recommend that you go check it out.