Wholesale, Retail, and Beginning to Sell Your Handmades to Shops, Part 1

comments: 93

Ellaposieshop Ah, Saturday morning here at the shop. Hot coffee, a little Pavement to get the brain going, and a survey of our offerings here at Ella Posie. Lately, people have been dropping in to sell us things right and left, and I wanted to write a bit about how to sell your stuff to boutiques, in my opinion.

My position on this topic is a little unique, I guess -- I both own a small boutique where I buy products from designers, and I create a line of original handmade things myself. I won't go into how I got here (I only bore famous Pulitzer-Prize-winning authors with my life story, after all) but I will say that I have been on both sides of the handmade-stuff-selling-and-buying relationship, so I've had occasion to make lots of mistakes in both arenas. It took me a long time to learn these things, and I never really knew where to look to find the answers, so hopefully I can save you some of that confusion here.

I'm assuming that most of you reading this blog are crafty-types, not unused to being asked to sell something that you've made, not unused to having your friends and family tell you that you are so talented you should be selling your things to stores. You are and you should! The world needs you! We are all fighting the war against the corporatization of American retail! (One of my favorite subjects, but more on this another time.)

Let's say you are singularly obsessed with making handpainted . . . toothbrushes. You've given them to all your family, all your friends, all your co-workers, and sold them at the cool indie holiday bazaar down the street. Everyone loves them, everyone agrees they are unique and wonderfully made, everyone says they've never seen anything like them anywhere else. A ha! think you. I'll start my own toothbrush-selling business!

If you really are serious about starting a business, there are good reasons, even in the global/web-site-lush world of commerce, to sell your products to shops, the most obvious being the exponentially increased exposure you will gain. When you first start thinking in this way, it's helpful to familiarize yourself with the basic wholesale/retail structure that most little shops will expect you to understand. To that end, a little vocabulary:
     Product: What you've made, and what you will sell
     Product line: The entire range of things offered by a designer or manufacturer
     Manufacturer: Not a romantic term, but let's face it: If you're going to sell things to stores, this is what you'll be called. There is very little about this relationship that is romantic, anyway, I promise.
     Buyer: The person at a shop who makes the decision about what to purchase for its shelves
     Wholesale price: This is the price that you will sell your handpainted toothbrushes to shops for. Generally, it's 50% of the retail price.
     Retail price: This is the price that the customer who ultimately buys your toothbrush from a shop will pay, sometimes also called the "price point." It is generally double the wholesale price that the buyer has paid, and can be marked up to include shipping costs, neighborhood cache, etc.
   Consignment: The practice of "giving" your toothbrushes to a buyer without getting any money for them up front. The shop will sell them for you, and pay you a percentage of the retail price regularly when/if they sell.

Products come to our attention in a couple of ways. We find them;  a rep stops by and shows us a bunch of product lines that she represents for the manufacturers; or they find us. For the purposes of this post, I'm going to assume that you, toothbrush painter, are interested in finding us to see if we want to buy what you have to sell.

Products make it to our shelves in one of two ways: We have either purchased them at a wholesale price from a manufacturer, or we have accepted them on consignment from a (usually local, but not necessarily) designer. When we purchase outright, the product is ours to sell, and ours to keep if it doesn't sell. It's always a gamble that we take, so we try to think carefully about the purchases we make, and that thinking involves many things: What do our customers want? What can we offer that will surprise them? What is unique to our location? Is the price point right for our customers? Do we have room to display it? Do we have other things like it? Do we love it? Many of our stores exist quite precariously in this economy and retail culture to begin with so we try to be quite careful in what we buy, much as you are careful with your own purchases. We may like and want lots of things, but we are limited by some of the above criteria. You shouldn't take it personally when a store says no to carrying your products. You should also learn to edit the advice you receive quite carefully. Success involves both flexibility in the marketplace and integrity; don't automatically sacrifice either when someone rejects you or tells you to change. All of us must, in the end, find our own way, and no one has a crystal ball.

But when you approach a store with the intention of selling us your toothbrushes, it's important to think like a buyer, and recognize that the above questions are paramount in that buyer's mind whenever they are considering carrying a product. We really aren't thinking about you and how long it took you to make that thing. We aren't thinking about how much it cost you (financially, emotionally, physically), how many bills you have to pay, or your hopes and dreams at all. We are thinking almost exclusively about ourselves, and whether we're going to be able to sell your product at the price point you are suggesting. I hate to be mean about it, and I'm not being: But understanding what is going through the mind of the buyer considering your product will help you have more success with the transaction and ultimately more success with your business, I think.

Nevertheless, there are certain things you can do before the buyer even sees your product that will help you curry favor. Here's one: Research. When people start out selling their handmade things, they usually start with local stores in their city or town. If you're not a big shopper and you aren't familiar with your local shops, take a day off and get out there. Look at what they carry, how it's displayed, what the general aesthetic and price point is. Take a business card. Buy something, and get a feel for the climate of the retail staff, how they package things, what's emphasized among the product lines they carry. Don't introduce yourself as a local artist looking to sell your toothbrushes! Nothing, and I mean nothing, will result in an icier reception. I can't say exactly why this happens, but it happens. Resist the temptation to introduce yourself. Pretend you're Veronica Mars and just spy. You're doing research here, remember? You're trying to save yourself the ultimate pain of approaching stores that are completely inappropriate for you and having them bitchily say, "Lady, do you know what we sell here?" (I of course never say this, I hope, but I do think it, and bitchily, too.)

I have great compassion for people who muster up the courage to pound the pavement. Trust me when I tell you that no one who loves sitting alone in their studio painting toothbrushes can possibly have the same Myers-Briggs personality type as someone who loves selling . . . anything. You are not alone in not wanting to do this. I promise you. But this is how people start out. And there are certain ways not to do it. I can't tell you how many people we've never seen before come into the shop with a bag full of stuff and expect us to drop whatever we're doing to consider their offerings. They may be out there, but I don't know of a single buyer who appreciates this. Please don't make this mistake -- it is the surest way to make a buyer think you are unprofessional. Unless you've got some cupcakes for us in that bag, too, we will talk about you behind your back and think you're dumb if you do this. On principal, we never buy things from these folks, and I can't think of any book on business I've ever read that suggests it as a tactic. It is an inconsiderate and amateurish approach, and sends up warning flags to your potential buyer that you will be inconsiderate and amateurish to work with in general. I'm vehement about it because it happens so often, amazingly.

Instead, try this. Research the stores you think would be potential candidates to carry your products. Make sure they are in different neighborhoods, or that they aren't in direct competition with each other; stores want to be unique, and they don't want their customers to feel like they can get the same stuff on every corner. If the store has a web site, go to it and read it. Discover whether or not they are strictly brick-and-mortar or if they also might sell your things on line; be prepared to have an answer if they ask you where else you sell your things, or whether you make them available  on-line.

Know your pricing. Don't expect your potential buyer to figure this out for you. Pricing is a complicated topic for another post, perhaps, but I will say this about it: You need to look hard at your toothbrush and think about what's gone into it: How much time have you spent painting it? How much money have you spent on its materials? How many miles have you put on your car driving around looking at shops? You need to think hard about what its perceived value is in the marketplace: How much are people willing to pay for a toothbrush, no matter how cool? Can you live with receiving half of that for every one you make? How will you feel if someone orders 100 of them?

If you intend to sell your toothbrushes to many stores, and also sell them off of your own web site, and also at craft shows, you should know that the retail price at all of these venues should be the same. I know you will tell me that this isn't fair/true/necessary, but I will insist that it is, if only because it will make your life exponentially easier if you start out pricing your products in this way. If you have different prices for different people or different places, or you try to sell your toothbrushes on-line at a price that undercuts the retail price your stores are selling them at, you will run into problems. I urge you to be realistic about your pricing, but to also value everything that you've brought to your product, and set a wholesale price that you are very comfortable living with. If you can't let it go for 50% of the retail price, you might consider working out a different percentage (60% to you, 40% to the shop, or even 70/30) especially if you are willing to place things on consignment, but it's fairly uncommon for a standard retail store to accomodate this. More on this, and consignment, another time, perhaps.

In addition to your wholesale/suggested retail prices, this is what else your buyer will want to know: Where else are you selling your stuff? What is your turnaround time? What are your terms (i.e.: how and when do you accept payment)? What is your minimum opening order amount (i.e.: how much do we have to spend to make it worth your while at all)? What is your reorder amount? If you're just starting out, I think it makes sense to set your minimums fairly low -- around $100. This gives a store more incentive to take a chance on you, and reorder when/if things sell without risking a bigger investment. It is lovely if you take the time to think about these things before you make contact with a buyer; it's even lovelier if you've typed it all up along with your contact information and some really good pictures of your products.

When you've done all this, I'll bet you'll be more than ready to make your informed, confident approach, which will hopefully result in the buyer setting up an appointment to see your things. But I'll talk about that next time because, really, how much free advice can one girl be expected to give away in one sitting.

Here's Part 2.

93 comments

Thank you so much for this! Invaluable. I look forward to the next installment. I am very interested in info on how to find a Rep and all about that side of things. If you can write something up on that I would be very grateful. :)

Can I also make another request... your type size is extremely small and hard to read (on my computer at least). Not sure about anyone else. I can go to View and choose Larger type which works fine but just thought I would mention it. :)

Jen

This is so wonderful/helpful! I love this blog...mainly because it just makes me happy, but this info in this post is so relevant to me right now! Ack, I see so many mistakes I've already made! Mainly with my insecurity about pricing. Cannot wait for future installments. (P.S. I love all your pink-hued happy photographs!)

Alicia,
Thank you for taking the time ro write up this thorough and informative post. Your advice could not have come at a better time for me, as I venture into the world of stationery design. Thank you, thank you, thank you. You're the best!

Hello Alicia, Just wanted to come out from lurking to tell you how much I love your site and to say thanks for your perspective on business. I had a childrenswear business a few years ago (manufacturer) and completely agree with everything you wrote. And like Lisajo, I look forward to your future installments. Also, I REALLY enjoyed reading your post about photography. Your photographs are absolutely beautiful.

Thank you for that info!! And you are right: the 'creative' personality is often so different from the 'salesperson' personality. I HATE to promote my product even thought I love it and do believe it is valuable and has a place. Maybe because I have worked as a buyer (when Meier and Frank had their buying offices downtown) and hated being hounded by relentless reps.!!! I know though that it is a step I have to take if I am ever going to be more than 'word of mouth'.

I've just printed this out to keep for future reference. Invaluable information! My husband has already told me a lot of this, but I don't listen to his advice..your's, that's another story ; )

Brilliant! Thanks so much for taking the time to write this all out. Fantastic advice.

great post - super useful! thanks for being so generous.

What fabulous information! I've been worried about breaking into retail but with your information it takes some of the fear out of it. And, I used to work in Purchasing for a huge corporation and you are right on with everything you said! Somehow, I neglected to think that those same issues would apply to the independant retail business. Thank you! I look forward to your next installment!

This is so incredibly helpful, as I'm gathering information to take my bibs on the road. I will put a lot more time into preparing now, knowing what you've shared. Many, many thanks for taking the time to post this. So generous!

You've managed to write the one essential chapter that's been missing in all the books and articles I've read regarding small business. Many Thanks!

Thankyou so much for taking the time to write this, and so generously sharing your knowledge. It's such useful information for those of us even considering the world of retail.

EEK!
I have been admiring your flickr photos for awhile ( I started the new domesticity group that you are a part of) and I said to myself that I needed to see if you had a blog-because I love every photo of yours and how much fun would it be to read your blog. So I find your blog and lo and behold-You own a shop-a shop i pass on the bus everyday I go to work!! This is a great post and I cannot wait to come to your shop!
abby

Thank you, Thank you, Thank you! I was so pleasantly surprised to sit down at my computer tonight and read your thoughtful and honest post. You're right, you really can see this from both sides, as an artist and a shop owner and the advice and tidbits you shared are very helpful. Thank you for taking the time to share this free advice (and more gorgeous photos of your lovely little shop)~I (and it looks like others too), appreciate it so much!

Thank you for this! It is so timely for me as I have been dreaming and wondering and planning what my future might hold. You are so lucky (so hardworking more like) to have your shop and do what you love to do. Thank you for sharing your experiences with us! :)

Thanks for the advice, much appreciated. I'd love to hear more about the things you couldn't elaborate on here.
Are there any really great online resources you could suggest?

Immediately bookmarked. Such valuable and appreciated advice. Thank you!

PS- I love that photograph so much! I want to live there. I wish you were there a few years ago when I lived in Portland. We're moving to OR at the end of the year so you know I'll visit often! ;)

Just thanks, as elaborated above!

I TOTALLY wish I could print this out and pass it out to the countless number of people who approach me at my shop everyday - and not seem too bitchy :)I agree 100% with your advice and pointers to these "manufacturers"

ornamentea says: January 23, 2006 at 06:03 AM

Very helpful info. Thanks.

Thank you so much for all this advice. *taking notes*

Oh thank you so much for this post!! Such good advice.

as everyone has said, but i needed to add my two cents, thank you for this extraordinarily pointed advice. you stopped me dead in my tracks warning us to stop before heading into a boutique toting our wares...can you believe that was my plan for next weekend? thank you for saving me the embarassment and helping me develop a plan.

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About

My name is Alicia Paulson
and I love to make things. I live with my husband and daughter in Portland, Oregon, and design sewing, embroidery, knitting, and crochet patterns. See more about me at aliciapaulson.com

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Since August of 2011 I've been using a Canon EOS 60D with an EF 18-200mm kit lens and an EF 100mm f/2.8 Macro lens.