Search results (tags) for: "wholesaling"

Holiday How-To: Wholesale on Etsy

2008-09-17T12:03:00Z

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 Virtual Labs (our live online classroom!).

Why Wholesale?

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).

Minimums

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?

Pricing

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.

For more info on this topic, check out Bethela's great article, Preparing for Wholesaling, from the Art of Pricing series.

Terms

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

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 Storque articles:

The Art of Pricing: Preparing for Wholesaling | The Ins and Outs of Consignment | Let's Trade: Behind the Scenes at the National Stationery Trade Show

We'd love to hear your wholesaling tips in the comments below or live at our Holiday How-To workshop in the Virtual Labs this Wednesday, September 17th, 2008 at 4pm.

Let's Trade: Behind the Scenes at the National Stationery Trade Show

2008-06-16T15:08:00Z

Back in January I wrote an article for the Storque reviewing the book Craft, Inc by Meg Mateo Ilasco. The book is a business primer for anyone in the craft field. One section of the book discussed the basics of showing your work at a trade show. Since I was already planning to attend the National Stationery Show (NSS) in New York, I decided this would be a great opportunity to pop in on several Etsians who were participating in a large trade event. Prior to the show, I interviewed six designers but was lucky to run into several more during the show. Those I interviewed included my friend Hannah at piebirdpress, Katie at micahandme, Shelley at albertinepress, Marty at letterarypress, Lisa at sweetbeets, and Jennifer at jhilldesign. They gave wonderful insight for anyone interested in this often daunting and sometimes mysterious scene.

A trade show is a ‘trade only’ event where sellers (you, the craftsperson) show their wares to buyers (retailers from small boutique shops to big box stores) in hopes of landing wholesale accounts. Trade shows are not open to the public and to “walk the floor” you usually have to either have a press pass, an exhibitor pass, a retailer pass or otherwise prove you are in the biz. Most trade shows occur over several long days in which the buyers can either place orders at the show, or take your catalog home for what you hope will they will buy later. One thing to note is that you do not actually give them the goods at the show. You simply have a display featuring your items. When buyers place orders, it is up to you to set your terms which include how soon after the show you will ship them their items.

If you do decide that you are interested in selling wholesale, and you have the means to produce larger quantities of your products, as well as having enough items to attract a variety of buyers, then a trade show may be a worthwhile investment. But note that it IS an investment which can quickly add up to a pretty penny. Booths can cost $2000+ for only a 10’ x 8’ booth. This doesn’t include electricity, flooring, walls, furnishings/display, not to mention travel and hotel expenses for the week. For this reason, I would suggest making sure you have a well developed line with several years in business under your belt before tackling the trade show circuit. Also, once you commit to exhibiting at a large trade show, it is often an unwritten expectation that you will exhibit every year (unless you ask for a sabbatical).

Sweet and simple sums up the sweetbeets booth display:

The National Stationery Show is the largest paper goods trade event in the country with approximately 1300 exhibitors and nearly 15,000 national and international retailers. Sweetbeets says it best: “I decided to go to NSS because it is THE show for my market and will help me expand the wholesale side of my business.” It runs 8 hours a day from Sunday till Wednesday annually in mid-May. While the smaller booths chosen ranged from 10x6’ to 10x10’, the majority of these lovely gals chose the 10x8’ booth as their temporary home away from home. As for years of experience, this was the third year for two of them, the second for one, and for three of them, this was their very first year. When I asked how long they had been preparing for the show, many of the first year exhibitors said they started planning for the show 1 ½ to 2 years prior. As micahandme put it, “About a year and a half ago… I came across an article online about a girl who attended (NSS) the year before. I made a promise to myself that day that I would be an exhibitor at the 2008 show …and it’s a promise that I’ve kept!”

A gorgeous wall of cards by micahandme:

When it came to the money, most of the exhibitors I interviewed had budgeted roughly $5000-7000 for exhibiting. Some were spending as much as $10,000 and one as little as $3000. The discrepancy in costs often is attributed to where you stay (with friends vs. nearly a week in a hotel, if you have to travel far to get there and even the costs of getting your display to the show). These costs also don’t include the expenses involved with developing and manufacturing their lines.

So how many products do you need to have at a show like this? Obviously the more products the better, with more choices for the finicky buyer to choose from. But a large line also means that many more designs you will have to produce. The number of items available at these ladies’ booths varied from around 50 up to nearly 150 different designs. Some of the larger companies had designs running in the hundreds of items. While hundreds of products may be a little out of your capability, it is important to have realistic goals. letterarypress told me, “If I take enough orders to cover expenses, I will be thrilled. My main goal is to open as many new accounts as I can, meet with reps, and maintain a presence in the industry.”

A fun display for letterarypress’ cards:

Of all the ladies I spoke with, jhilldesign was the only one sharing a booth with three other companies (two of which also have Etsy shops — Tara Hogan of Ink + Wit and Anna and Sean of Sub-Studio). This allowed them to afford a larger booth than they would individually. But don’t think you can cram 10 of your best buds in a booth with you. Large trade shows have serious rules, many of which involve how you can and cannot share a booth. Typically everyone sharing must be represented by a larger "rep group." Some of Jennifer’s best advice on gleaning info: “I always tell people to find someone who does what they want to do and ask them every question under the sun.”

A trio of beautiful displays from tarahogan, substudio, jhilldesign:

So if you are considering a future in the trade show market, hopefully these final words of advice from the two veterans of those I interviewed will inspire you — yet keep you grounded at the same time. Piebirdpress mentions, “The wholesale world is pretty brutal, and you have to be really serious about your business to get involved. You really can’t go to a show like NSS and expect to print cards per order, or produce editions of 50 cards at a time. If you aren’t equipped to step up production, you will flounder….If you do decide to go, a creative booth display is really important. Make sure you wear good shoes and dress comfortably…You should have plenty of promotional materials available: linesheets, business cards, giveaways… It’s important to be really friendly to everyone, and be prepared to point out what makes your cards special, even if nobody asks.”

A deliciously decorated booth from piebirdpress:

Lastly, according to albertinepress, “Participating at NSS or any other trade show is a huge endeavor. Don’t go in unprepared, and don’t expect to be a huge success overnight. Spend a lot of time to make sure that you’re reflecting yourself and your work in your booth display. Buyers are visiting over 1000 booths (or rather, walking by over 1000 booths). You need to give them a reason to stop at yours. Then you need the products to keep them there. But have fun!”

Stunning patterns and colors from albertinepress:

Some other Etsians I ran into include:

The orangebeautiful ladies are sitting pretty in their lovely booth:

A warm and welcoming feel from dutchdoor:

Overall, the show was wonderful to see. Every year I come away with a new list of designers I admire. My favorite part, hands down, was meeting the talented and lovely Etsians exhibiting. Even in the larger booths, when I asked if they knew of Etsy, they all were like… "Oh yeah, yeah.. I know Etsy." That was a nice feeling.

Some other Etsians who exhibited at NSS include:
Susyjack, pearlmarmalade, angelaliguori, and magnoliamoonlight

Further Resources:
American Craft Council Baltimore Show
Craft and Hobby Association
EXTRACTS (bath and body trade show)
George Little Management: A trade show organizer
International Contemporary Furniture Fair
New York International Gift Fair
Philadelphia Buyers Market of American Craft

For extended coverage of the show from more of a design perspective that includes Etsians and non-Etsians alike, visit my blog at www.paper-stories.blogspot.com.

Looking for more info about trade shows? Check out this post on the International Gem and Mineral Show!

The Ins and Outs of Consignment

2007-12-11T12:47:00Z

Success!

After gathering up every ounce of confidence, and samples of your work, you finally get a gallery or shop owner to sit down with you. And she wants to sell your work! Suddenly visions of fame, fortune and crafting dance around your head. And then the owner suggests a consignment.

But what exactly does consignment mean and how do you know if it's a good deal for you? Wholesale means the artist sells the product directly to the retailer at a bulk rate. With a typical consignment, the artist supplies the store with products for free. When an item sells, the artist will receive the proceeds of the sale minus a commission. The commission is usually around 40 to 60 percent of the sale price (whether wholesaling or consigning, please price your work accordingly (see this article on wholesaling from Beth's Art of Pricing series). That means the artist will not get paid until the work sells. If the work does not sell, the retailer may return the work to the artist.

A consignment deal may benefit an artist. A consignment might make it easier to get items in many outlets. Also, consignments can be ideal for new or risky work, and an artist might be able to pull back items or switch a line during the run. But there are some tricks to the trade that you should watch out for.

Before you agree to sell on consignment, consider the following:

Do research and use common sense. Unfortunately, retailers come and go. You don’t want a retailer to come and go with your art, without paying you. Before you place your work in a retail establishment, you might want to ask for references or lists of other artists exhibiting there. Ask the references about their experiences. When in doubt, avoid large orders until you have built a level of trust.
Get all the retailer’s details. You might want to ask for tax IDs, full names, addresses, email addresses and phone numbers. Ask for financial or credit information. That way you will be prepared to contact the retailer if necessary.
Get all the details of the agreement. You will benefit from a written consignment agreement. The agreement should cover (for example): the full inventory, the retail prices, the length of time of the consignment, payment information, the store’s responsibility for damage or theft, the store’s fees, return policies, display policies, shipping responsibilities, promotional responsibilities, insurance, legal fees, termination, discounting, and any obligations to post a sign regarding the consignment. Both parties should sign this agreement. You may want to use your own consignment agreement. If the retailer supplies you with a consignment agreement, make sure you agree to each clause before you sign it. Do not be afraid to negotiate!
Stay in contact with the retailer. Regular communication may alert you to any problems with the retailer and it can also help you prepare for success. For example, if you know the retailer is running low on your most popular item, you will be prepared for a re-order.
Know when to quit. It’s up to you to decide if a relationship is not working out. If you experience late payments or suspect financial problems, you may want to take your work back and move your talents elsewhere.

There are few guarantees in business. Some artists have had amazing successes by selling on consignment and some have had unfortunate experiences. If you receive a convo regarding a consignment that seems suspicious, please email abuse@etsy.com.

This information is for educational and informational purposes only. The content should not be construed as legal advice. The author and Etsy, Inc. disclaim all responsibility for any and all losses, damages, or causes of action that may arise or be connected with the use of these materials. Please consult a licensed attorney in your area with specific legal questions or concerns.

The Art of Pricing: Preparing for Wholesaling

2007-10-31T08:21:00Z

Beth is an admin at Etsy on the Business Operations Team. She is writing about pricing in a multi-part series, so ask her your questions in the comments below. This week's topic is how to prepare your business for wholesaling.

Wholesaling is yet another factor to consider as you price your work. Wholesaling is when a boutique or another reseller approaches you to purchase your items in bulk, usually expecting a discount for the large order. The expected discounts are between 30% and 60%, most often settling around 50%. These discounts are large, which is why it is so important to carefully consider how wholesaling could work for you before you price your items. As we discussed in Understanding Your Costs, it is critical to calculate your costs and related time and price your work accordingly. Remember that since you would selling multiple items with wholesaling, you may not need the same profit on each item for the economics to work out well for you.

Here are some numbers, for example:

Traditional pricing:
$20 – Total direct costs
$45 – Price (this includes the amount you would like to make for your time)
$25 – Total profit per item

Wholesaling:
$45 – Price
$22.50 – Price per item at wholesale discount of 50%
$20 – Total direct costs
$2.50 – Total profit per item

In this example, the seller needs to consider if $2.50 per item is enough profit to justify the sale. It may seem low, but it may just be worth the sale. Depending on the quantity purchased, this profit can add up to a tidy sum. For instance, if you are selling 10 items, this profit is $20.50 and at 50 items $102.50. This is a simple example that illustrates the need to walk through your costs, necessary profit and the expected discounts before pricing if you want to consider wholesaling.

Wholesaling can be a great way to drive more sales, but you need to take care in pricing your work accordingly. Since each item you sell wholesale is not available to sell for the full price in your store you need to balance the increased number of sales with your ability to stock and sell in your own store.

When working with wholesale buyers, price is only once consideration. You want to outline the other terms and conditions you need to be comfortable with for the deal to work. For instance, you may find that it is not worth wholesaling unless the purchaser buys more than a certain quantity. In the above example, the seller may decide that 10 items is the minimum number to make a wholesale order work for them.

Other terms you may want to consider include payment before shipment (received and cleared) and a sliding scale for discounts. An example might be: 10-20 items receive a 40% discount, 20+ items receive at 50% discount, etc. Consider what you will need to make yourself comfortable with the deal and protect yourself. Some put these terms in their Etsy shop descriptions. However, I suggest listing on your front page that wholesale orders are welcome, like Contrary, an Etsy admin, does in her store. Then you can email or convo your terms directly to the wholesaler once you have established contact.

Another way to protect yourself is to conduct your wholesale orders on Etsy. This can be done a couple of ways:
1) After you've agreed upon a deal with a wholesaler, create one custom listing specifically for all of the items that they agreed to purchase. Make sure to title this custom Etsy listing as "RESERVED" so that some other buyer doesn't purchase it by unwittingly.
2) Use existing or create multiple listings for the items to be purchased by the wholesale buyer (this can also help increase
your sales numbers and feedback).
Both ways create an online record or "virtual paper-trail" at Etsy which is important to protect yourself. Etsy Support staff will not be able to help you if you do the transaction off Etsy and something goes wrong.

Wholesaling can be a great way to increase your sales and your reputation. Done thoughtfully, wholesaling can help your business get to “the next level” and broaden your exposure, which is always good for future sales.

Check back in next week, when Beth will be discussing Theories in Discounting. Please leave Beth your questions and comments below!