Friday, May 7, 2010

Wholesale Away, Wholesale Away, Wholesale Away With Me!

Wholesaling. It may seem a little scary, or daunting. In slow times we all need to search out and infiltrate any market we can, and not depend on in the Internet alone to increase our sales and fatten our wallets! Wholesaling can definitely be a lot of work and it may not be for everyone, but in the long run it will widen your audience, keep money coming in, and increase the longevity of your business. I've gotten a few wholesale accounts through Etsy and other avenues and have learned a few tricks from fumbling through my first orders. I also spent three wonderful years as a production/design assistant to a high end jewelry wholesaler where I learned some basic tricks and helpful organizational tools to make it the wholesale process go smoother and be more successful!
~The first thing you need to decide is if you are even able to sell wholesale. In order to be fair to the stores you are trying to wholesale to you need to be able to offer them a fair price that they can mark up and resell in their store. Retailers generally ‘keystone’ the prices that they pay, which just means doubled, so essentially you would be cutting the price on your Etsy shop in half for wholesale. If you are having a hard time grasping the idea of charging someone half the price you have already set, think about these few things:
  • You will get a large order all at once, which translates to more money at once
  • If your items sell well you could have a account with consistent orders for years
  • No photos to take or edit, no listings to post and promote, no individual shipping packages
  • More exposure, more exposure, more exposure!!

Before you head out in the world to scout out future stores to fill with your lovelies you must get organized and have all your information worked out. 

~Create a over letter and full information sheet, it should include a brief hello and quick explanation of your brand or mentality, maybe look to your Etsy shop announcement and use some of the same wording. Then you need to explain the working of your shop and the order process, it should include these points:
  • Minimum order amount- This will vary depending on your item cost but it should be no less the $100.00, to make it worth it for you and to make sure it is a actual retail store that is seriously looking to do business with you.
  • Terms of payment- Do you accept Credit Cards? Checks? Money orders? And when payment is expected. Personally I let my buyers know when the order is about ready to ship and payment is expected before their package is mailed off
  • How to place and order- Because it would be hard for me to make a standard order sheet because of the nature of my product I refer my buyer to the price sheet and then to my website to see the different styles. (I try to keep my styles in line with my categories in my shop) I tell them to email me with their order request (such as 3 circle pendants in silver on chain, 2 circle pendants in gold on cord etc, etc,) and I put together the order in an invoice and email it back to them with the total price and how long it will take to complete. Only after approval from them I begin to make the order. This section is totally tailored to you, would you like if the buyer order a minimum of 2 each of the item? Are there certain things you don't want to sell at wholesale, include these things, this is on your terms.
  • Turnaround Time- This kind of all depends on your product, how large of an order it is, how long to get your materials. Before you receive a full order you can be general, just tell them 2 to 4 weeks depending on the order size. The buyer should know at this point that your items are handcrafted by you with love and a lot of time. If they absolutely need to have some items sooner maybe work out a partial ship but only accept payment for the whole order in full at the time of the first shipment! So if the first shipment of goods (for some horrible awful reason) does not sell at their shop they might refuse the second half of the order and you'd be out of your money, especially if you've already bought supplies.
  • Shipping Methods- To get an idea, for my first order I took the same amount of similar items from my stock items that the order was asking for, all the packaging I would need, all that jazz, put it in a box and brought it down to the post office. I added $2.00 to the cost they told me just to cover in case the buyers add pieces or whatnot and quoted that price to them. Cover your butt and get insurance and delivery confirmation too, and just include that in the price you quote. Make sure you also let your buyer know if you include packaging with your wholesale items, and if you include your own tags (which I would). I have cute handmade envelopes for each piece that I include but if you normally have gift boxes or extravagant wrapping that you package in for your Etsy store, I don't think that would be necessary to provide.
  • Re-Ordering- It's pretty standard to have a smaller minimum re-order amount since you already know they are a legit store and it's just a nice thing to offer. Some stores may get special requests from their customers for you. It's up to you weather you would like the store to wait until they have a full re-order amount or if you will accept the single custom order. 

~Next step is to plan out your price sheet which is obviously so specific to your shop and what you sell so make it work for you and remember do NOT sell yourself short! Right off the bat, like I mentioned, retail stores at least double the wholesale price so you need to be able to cut your Etsy's shop prices in half. There is a little wiggle room, I'd say about 10% since people will have to pay for shipping when they buy from your site. The main thing to remember is that your retail price should not more then $5.00 lower then the store's retail price.

~For my price list I broke my shop down into different styles (circle pendants on cord, circle pendants on chain, multi-circles, buckles, etc.) and then gave about a 4 dollar price range each of the different styles. If you have different color options for styles that have different price ranges, include all that. When they send me their order that is when I finalize the exact cost for each piece they want, I find this imperative when you have one of a kind items that can slightly vary within styles because you may have an style like 'Small Lace Hair Bow' but the client wants one bow with a different lace that may be more expensive, that's then covered in your 'Small Lace Hair Bow' price range. 

~For those of you like me, with some one of a kind items in your Etsy shop that you have already taken photos of listed, you might want to offer those pieces to the retailer at less of a discount. For instance if someone wants the exact piece off the site they are able to purchase that for their store at 40% off the Etsy listed price, this way my time spent to get that online is not lost.

~Make sure that somewhere, in your information sheet or on your price list you state that you have the right to raise or lower your prices in accordance to my own retail shop or something along those lines, again, just to cover your costs and make sure you don't end up loosing a lot of money in the future due to rising costs of supplies. A design house I worked for ended up loosing a bunch of money because they never adjusted shipping prices so make sure you are always crunching your numbers and adjusting your price sheet and cover letter for fluctuation in the market.

~After you have finished all your information make sure you print it out and have a few different people read through it to make sure it makes sense and there are no typos! Now you are set to open your window and spread to good word about your business to the world!

How to Look for Stores
~Alright! You've got all your information ready and now what do you do with it? There are so many stores our there and how do you find the ones right for you? 

~My advice is to start locally, look in your own town and surrounding towns first. Remember to think of other kinds of stores other then just boutiques or gift shops, but also of spas and hair salons, coffee shops, music stores, local bands for their merch table, just drive around your nearby towns and drop into shops that look appealing, give them your business card and information! 

~If you are like me at the moment and live in a small town with no sales prospects you have to broaden your search. Start by asking extended family members or friends who live in other sates or farther away to look in their towns and send you addresses or emails of shops that they like. Send out a call on your facebook page, ask your fans if they know any shops that would be a good fit for your product! 

~I find stores that I know people already like, other then blindly picking a shop online to send information out to usually works out better because you have someone who will promote you mouth to mouth in the area of that shop, and you know already for a fact that it's a legit store! 

~When I email stores I always attach a few images along with the documents so they see my jewelry right away and get immediately wowed without having to click to the site! At the moment when I send out hard copies it is usually to a store that I REALLY like and I include a inexpensive sample of my product for them to keep so they can get a real feel for my workmanship and hopefully get them to order from me!

So you've got your first order! Woo-Hoo!
Yay! Someone loves your stuff and wants it in their shop! They placed an order, you typed up an invoice, they approved it, you made the items and received payment! 

~Before you pack it up and ship it out, a really good thing to do is take quick pictures of the items you are sending, strictly for your records so that when they reorder if they want some of the same things you don't sit there and go “uuuhhhhhhh what exactly did I make again” because that would stink! I sell jewelry it's easy to lay all my pieces on my scanner and scan the images into a folder specifically for that retail store, quick and easy and will keep you organized! 

~Wrap your items up nicely and I would recommend making your own tags (without your website on it!!! very important) and marking each item with the line # on your invoice in pencil so it is easier for whomever unpacks the box! 

~Include a couple business cards and a quick note along with the invoice, if you have an artist profile or statement with a picture include that for sure! ( I haven't made one yet, it's on my list...) For a first time order I like to include a small gift for the buyer to thank them for ordering! I know someone who likes to spritz perfume in the box right before she closes it so it smelles nice when they open it! Not necessary, but adds a nice little touch!

Follow Up!
Once you've shipped your order out make sure you check in after the package has been received to make sure everything is to their liking and if they need anything else! After that give it about a months, depending on how big their original order is and check in again to see if they want to place a reorder. Another idea is to have a newsletter specifically for your wholesale clients to update them on new products, prices or any publicity on you for them to be able to talk about with their clients. Keep in touch just enough so that you are not forgotten but not too much that you become a nuisance to their email inbox!

Keep a Weather Eye on the Horizon
Always keep your eye out for new stores to sell to, hand out your business card to shops when your on vacation or a out of town day trip. Search shops online and follow them on twitter, check out there website and email information to them. It's almost like promoting two shops at once to two separate markets but it is well worth it, who knows maybe someday your business will only be wholesale and you'll be able to attend big trade shows in NYC and LA and sell to hundreds of shops over the world! It sounds super duper cheesy but start small and think big, it never hurts to send out your information to someone and who knows where that information will travel! Good luck, I hope this helps in your business travels and feel free to leave any other tip or tricks in the comments below! :) xoxo

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