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Wholesaling--
Making Money Every Month of the Year
by Karen
Booy
as published in CRAFTLINK Newsletter
For most craft business owners, the prime
selling months lie between September and December. how do you adjust your
business so that you can make money every month of the year? The answer may be
in developing a wholesale aspect to your business.
What is Wholesaling?
Wholesaling is selling goods to retailers rather than to consumers directly.
Once a product is purchased at wholesale, the retailer then displays it and
sells the new product at a retail price.
Wholesale Mark-Up
The standard for retail giftware is 100% mark-up. As an example if you
wholesale a candle for $5. the retail price would then be $9.99. As you
first consider wholesaling, this may seem unfair. However, you probably do not
realize the many costs involved in the sale of your product (if you sell it
yourself, or in the owning and operating of a retail shop).
Choosing A Wholesale Product
- The trick to successful wholesaling
lies in the careful development of a product line that you can sell at
wholesale rates while still making a profit.
- Not every product will lend itself to
wholesaling. If the wholesale price of your product is too high (due to
intensive labour and expensive materials), then the retailer you sell to
will have difficulty selling that item.
- It will take some research to figure
out exactly what your crafts are costing you to produce and to evaluate if you
can still make a profit by selling them at wholesale
Develop And Evaluate Your Product Line
- Once you have figured out the true cost
of your products you will be able to group those that have enough mark-up to
make them wholesale candidates.
- Start with a simple product line of
less than 10 items. If your product line is too extensive it is difficult to
handle when displaying at a trade show, creating a sales brochure or simply keeping
on top of the production of that many different items!
- If you want your product line to look
more extensive, then simply offer the same item in different sixes or
colours.
- Create a theme for your product line,
perhaps by colour by scent, by season (Christmas or Spring) or by a common
element (gardening). This will help you create a cohesive presentation of
your product line.
- Judge yourself on the quality of
workmanship, originality and the marketability of your items. If any of
these are lacking, wait to approach the stores and spend the time needed to
improve upon your product.
What's Next?
Once you have developed a line of quality wholesale products, you are then ready
to approach retail shops. Follow these simple steps:
Choosing Your Steps
- Be selective about the shops that you
sell to.
- Don't start at the bottom and hope to
work up. Instead, select the finest retail stores and approach them. If you
have taken the time to closely evaluate and perfect your crafts, then you
should be well received by the gift shop owners.
- How do you find the best shops? First,
start with your immediate community. Ask friends and relatives where they
like to shop. Look in the yellow pages and see what interesting stores you
can find. Keep in mind that the type of products you produce will influence
the type of stores you will be targeting.
Creative Alliances
- Be creative and make interesting
connections between product and shop; if you sell quilts, dolls and pillows,
a country furniture store could ve just the place to showcase your crafts.
Don't think the only place to sell crafts is in a gift shop. Would your
product sell in a garden shop, books store, bathroom shop, clothing store or
specialty food store?
- A successful designer of jewelry
created her product line to complement the clothing of high-end women's wear
store. It worked so well that she was invited to see the new clothing
samples ahead of time and began creating her product line with the shop
owners aid. Think of what kind of creative alliances you can establish.
Check out the Shop
Once you have compiled a list, the next step is to visit the shops and do
some detective work. While at the shops make careful mental notes on the
following:
- Type of products and price range of
items carried.
- Predominant colors of product.
- How products are displayed
- Are there any products similar to
yours?
- If there are, how do price and quality
compare?
Now you will have an idea if your products
will fit the store.
The Four step Approach
To Wholesale
Write A Business Letter
Introduce yourself and your product by writing a letter. This allows you to
carefully plan your introduction. Refer back to your notes and be sure to
personalize the letter to the shop owner. Inform the shop owner that you will
contact her.
Call And Make An Appointment
Follow up your letter with a call
to arrange an appointment for the shop owner to view your samples.
The Appointment
Arrive dressed professionally and ready for business. Don't forget your:
- product samples
- business cards
- literature/brochures of your product
(if available)
- price list
- order book
- calculator
- pen
Write Up The Invoice
If you have done your homework, the next step will be to write up the invoice.
Congratulations, you are now in the wholesale business!
More information on
Karen Booy or Craftlink Newsletter
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