Editor’s Note: We’re excited welcome Katie Hunt (the founder of Tradeshow Bootcamp) to the blog for this guest post from our friends at CreativeLive on four Benchmarks for Wholesaling.
CreativeLive is one of the best educational resources for creatives. I have taken several awesome and rewarding CreativeLive classes, and has also taught one). CreativeLive offers FREE live classes in business, photography, crafting and more, plus you can purchase workshops and watch them anytime.
WIN A FREE CREATIVELIVE CLASS:
To help you fall in love with CreativeLive the way we have we’re giving away their Wholesaling for Makers Bundle which includes FOUR classes to one lucky winner. Want to win? Just leave a comment on this post by July 29th letting us know the best business advice you’ve gotten lately.
*The contest is now closed. Congrats to Erica!*
You’ve been selling your products successfully online and at craft shows. But you’d love to see your products grace the shelves of international boutiques or maybe some big box stores! Selling wholesale is a big decision. You need to think carefully about your product line, your pricing structure and your production process before you commit. Read on to determine if you’re primed to tackle wholesale:
- Have you tested the market? Have you shopped your products around to local retailers and are they interested? Keep in mind that your wholesale customer has different motivations for buying than your retail customers. Retailers want to know that you not only have a stellar product that their customers will love, but they want to ensure you’ll ship orders on time, you’ll release new products on a regular basis, you follow industry standards and you’ll be professional. Think on this: Reaching out to stores will help you refine your pitch, provide feedback on your products and help you identify what is important to buyers.
- How many products do you have? As much as we’d like them to, retailers are not going to buy everything you’re selling. You need to have a large enough line that a wholesale customer can purchase a fraction of what you’re selling and still meet your opening order requirements. They want to see variety in your line. Think on this: How many SKUs does a buyer need to purchase to meet your opening order requirement? Aim to have 3 or 4 times that number of SKUs in your collection.
- Does your pricing work for wholesale? You set your wholesale pricing, and then retailers will keystone (double it) to get to the retail pricing. So, if you wholesale a product for $5, the retail price will be at least $10 in the store, sometimes more. It is important to know your production costs so you can accurately set your wholesale pricing but you also need to do your homework to ensure your prices are in line with similar items on the market. Think on this: If you price too high and you’ll price yourself out of the market. If you price too low, you won’t make any money. The middle zone is your pricing sweet spot.
- Can you produce your products in large quantities and are you prepared to house inventory? This question is particularly important for people offering handmade, one of a kind products. Wholesale requires you to be able to produce (and sell) your products in larger quantities and maintain an inventory so that you have items ready to ship. If your products are difficult to scale or if you’re the only one that can create them, you may have a difficult time transitioning to wholesale. Think on this: If a major retailer approached you today and wanted 1,000 pieces of one SKU in two weeks. Could you make it happen?
About Katie Hunt:
Katie Hunt is the founder of Tradeshow Bootcamp and a business strategist focused on helping product-based businesses create a product line, launch it to the wholesale market and streamline their business operations. Katie has a passion for creating, a mind for business and a strong desire to help others succeed.