Have you ever received an inquiry about wholesaling your work from a boutique owner and wondered how to respond? Also, what should you charge? And how do you handle the increased volume of this kind of order? So many questions spring to mind!
With the holidays around the corner, brick and mortar shops are looking to stock up on the perfect gifts! (And where better to start their search than Etsy?) Read on to find out more about wholesaling your work to shops and galleries. Have an experience to share or want to learn more? Leave it in the comments below or join us this Wednesday, September 17th, 2008 at 4pm Eastern in the Online Labs.
Why should you wholesale your work when you can sell it for more online? There are a few reasons. First, consider the time it takes to photograph, list, promote, package and ship your own work. When you are sending a larger quantity of items to a wholesale account, they do this work for you. Secondly, wholesaling is an opportunity to create a consistent income from recurring wholesale orders. If you wholesale to multiple buyers, this can bring in a steady and large portion of your income.
Tip: Creating items in multiples, as is required for a lot of wholesale orders, can cut down on your labor time (per item) and cost of supplies (if you buy in bulk).
The shop owner contacting you might ask you what your “minimum” is. If you’ve never heard this term, what they are referring to is the minimum order they need to place to receive your work at wholesale prices. They are looking for a dollar amount: for example, if they place an order of $200 or more, they have met your minimum. You should decide what your minimum for wholesale orders is going to be based on your costs. What amount makes the wholesale price worth this discount?
Retailers interested in your items are looking to sell your items for double their price. This is called a keystone markup. Keep in mind that many interested retailers might assume your Etsy prices are already at their retail price. This means that when they ask you for your wholesale prices, they are usually interested in the price you have listed on Etsy, cut in half. Many sellers find this a bit of a quandary. When they’ve listed their items without taking this situation into account, they may find themselves severely undercut if they take 50% off their current prices to take advantage of a wholesaling opportunity. In this situation, you can either increase your Etsy prices or let your wholesale buyers know that your wholesale discount is less than 50%. Both have their own challenges: You need to weigh the pros and cons for both situations and figure out which will be most advantageous for your shop. If you are serious about selling your work in brick and mortar shops, I would suggest increasing your Etsy prices. It is always best to have the prices of your work consistent online and off. This will keep your wholesale buyers happy!
Tip: You can keystone your Etsy price + shipping! If a shopper buys your item from one of your wholesale accounts, they don’t have to incur the shipping price. This is a little trick that can help raise your wholesale prices a touch.
Before you send information, such as your terms of agreement, I would make sure you are dealing with a “legit” buyer. You can ask them for their resale certificate, business license or state tax resellers permit. You should politely ask for more information about their business, not only to see if they are “legit,” but to make sure your work will fit in with their customers. If they are local, go and meet the owners in person. If not, make sure you have a look at their website, photos, blogs, etc. Remember, this is your business and you set the rules. If something feels odd, investigate!
When a buyer comes to you wanting wholesale information, make sure you set your terms. We have talked about some of these conditions already, such as minimums. You may also want to set a separate minimum for reorders (i.e. $200 first time wholesale minimum, $100 reorder minimum).
Next, let them know what your shipping fees are for wholesale orders. Definitely include the price of tracking and insuring your packages.
You may also like to mention your return policy in your terms. Many artists will only return defective or damaged merchandise for a certain period, such as within 90 days. This is, of course, up to you.
Lastly, let the buyer know how to order from you. If they have found you via Etsy, let them know you can create a reserved, customized listing in your Etsy shop just for them. (Here’s how!) It is perfectly acceptable to ask for complete payment up front! By creating a wholesale listing for them through Etsy, you have a transaction record and more resolution options should the agreement go sour.
Tip: Creating a listing through Etsy for your wholesale buyers can increase your feedback and also serve as a small advertising to other shops who are looking to buy wholesale from you!
Packaging is just as important when sending out a wholesale order as it is with an Etsy order. Make sure you have tagged your items with your business name! This way your buyers (online and offline) will connect your work with your brand. Cute, thoughtful packaging will impress your wholesale buyers and their shoppers.
Hopefully, this has shed some light on the sometimes daunting topic of wholesaling! It can be an intimidating step for small business owners, but if you are prepared, this can take your business to the next level. You can find out more about wholesale and consignment in the following Blog articles:
We’d love to hear your wholesaling tips in the comments below or live at our Holiday How-To workshop in the Online Labs this Wednesday, September 17th, 2008 at 4pm.