Chances are if you’ve been toying with the idea of jumping into wholesale one of two things is happening in your business.
You’ve been approached by a store or buyer asking if your products are available for wholesale, had to say no, and started wondering what kind of opportunity you may be missing
You’ve been selling for a while and are looking to scale your business. In order to get the volume, it would take to reach your goals you see wholesale as the natural next step for biz growth.
Offering your products at wholesale is awesome not only for boosting sales volume but for establishing your business as a brand in the marketplace. Plus, nothing beats walking into a store and seeing something you’ve poured your heart and soul into sitting on a shelf. (I still get excited when I see products on the sales floor from my old company, and I haven’t worked there for three years!) In this post, I’ve listed 10 ways to tell that your business ready for wholesale.
You have a wide variety of products
Buyers + retailers want to see a wide variety of product options before placing an order. When you line appears to be developed buyers become more confident in your business because you don’t look like the new kid on the block (even if you are!) The more designs and products you have in place the greater chance you have at landing an order simply because there are more options that may appeal to a buyer.
You have established your Unique Selling Position (aka USP, also referred to as Unique Selling Proposition or Unique Selling Point)
In a nutshell, this is the thing that makes your brand and products unique. It’s a selling point that garners attention and gives buyers and retailers a reason to pick your products over the competition. This may be as simple as Made in the USA, Fair Trade, Made with 100% Recycled paper or as complex as a witty brand tagline. A great example of an awesome USP is from my friend Aubrey Mathis, owner of Today May Suck. Her line of stationery and gift items allow people to support for loved ones going through a difficult time by acknowledging that their current situation is indeed, sucky.
You have packaging that works for a retail sales floor
Packaging is a huge part of a retailer's presentation. When they invest in a product, they want to make sure it not only looks pretty and unique enough to grab a customer's attention but that it can withstand living on the sales floor and not be ruined easily. Having packaging that is on brand will help paint the picture for buyers thinking of carrying your products. Keep in mind that the packaging effort that goes into an etsy order or order from your website is probably going to be very different than what you’re sending to a store. When you send direct to an etsy customer you probably add a few extra bells and whistles (maybe some fancy tissue or a handwritten card) when you pack an order. The packaging for the sales floor is what is going to make your product identifiable like include backer cards, belly bands, and product labeling.
The numbers WORK
Not every product is destined for wholesale. Sometimes, the numbers just don’t add up! As a general rule of thumb, your wholesale price is going to be half of your retail price. So that $20 art print would wholesale for $10. Sometimes, slashing prices in half doesn’t work. When this happens you have two options:
Re-source the item and try to get the price down
Put it aside and focus on the other styles where your pricing works
Spend a lot of time on the numbers to make sure you're offering products that are in line with your pricing and profit strategy.
You Understand how buyers + retailers look at wholesale pricing
Setting your wholesale prices is just the tip of the iceberg. While half off retail is industry standard, it’s important to know that not every retailer works within these parameters. In most cases, the larger stores ask for better pricing. Not entirely clear on your pricing strategy yet? Check out my free pricing workbook, which you can download here.
You have the budget to carry inventory if need be
Chances are, even if you drop ship there is going to come a time when you’re going to have to carry inventory. In doing so, you’re committing a lot of money up front in the hopes you’ll sell through that inventory. While taking pre-orders is one workaround if a product does well and a buyer wants to reorder you’re going to want to ship them as quickly as possible so it helps to have some stock on hand. Ask yourself, can you afford the uncertainty that comes with carrying inventory?
You understand your target market
Knowing who buys your products and being able to speak to some of your key customer traits will help you establish yourself as an expert. When you can confidently sit across from a buyer and say, “if your client loves X then they will definitely be into (insert your product here) Going the “every store with a door” route isn’t going to get you very far. When you’re reaching out to buyers they want to see that you’ve done your homework and are seeking them out for a specific reason. The quickest way to piss off a potential retailer? Blindly sending them an email or product samples that make zero sense for their customer base. The buyer will be put off by your lack of effort and you’ll be left looking like an amateur.
You are ready to take on larger orders.
Whether you’re making each product by hand or outsourcing to a printer you want to take a look at your process to make sure you can accommodate larger orders. Look at how long it takes to either make your products individually or for your printer to turn an order around. When you’re just starting out the volume will most likely be more manageable but if Paper Source came a knocking and wanted to place hundreds or thousands of units, are you able to accommodate? You don’t necessarily have to have this answer immediately, but you do need to start thinking about scalability.
You have you done your research
Here’s the thing, wholesale isn’t for everyone. Running a wholesale business and managing retailer orders + expectations is a full-time job in itself. While you may have dreams of being on the shelf at paper source, it makes sense to test the waters and to focus on working with smaller stores, in the beginning, to learn as much as you can. Big Stores can be a big payoff, but they can also make for big losses.
You have a social media presence
If you’ve been living on Etsy or have a website you’re off to a great start! But what about Instagram and Facebook? During the vetting process, there are going to be buyers who look for you on other social media platforms to learn as much as they can about you before committing to placing an order. Don’t let the number of followers you have discourage you because it’s not all about the follower count. Buyers + retailers not only want to see the products you sell but what your current customers are saying and how you treat them. If they see lots of praise about your products or questions being addressed quickly by you or a member of your team they will probably feel more comfortable with moving forward because you’ve already proven you’re accessible and helpful AND people are responding to the styles in your line. All of this additional information will help in their decision to buy from you!
Trying to figure out if your business is ready for the next steps? Grab your free checkist in the free resource library!