How do you set up Wholesale Prices?

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Original Post

SaysYou says

I've been asked about wholesale prices on my items. As I understand it, they want to buy my item for half my listed price so that they can sell it for the full price. How do I make out on top in the end?

Posted at 11:11 am Jun 23, 2009 EDT


Really to end up still making a profit, you need to set your prices *for wholesale*. Figure the cost of your materials, include money to pay yourself for your time (or you're giving your work away!) - add in the cost of shipping/packaging materials, and a small amount for advertising/promotion - and decide what your price will be based on those items (and more, those are just some basics).

So if your materials cost $2.50, and you spend an hour making the item, you should be able to pay yourself a minimum of, say, $15.00 per hour (that's probably higher than you were thinking - and lower than it should be! You have a SKILL!)

Anyway, materials at $2.50, your time at $15.00, add say $1.00 for packaging etc - and the WHOLESALE cost of your item is $18.50.

Your RETAIL price should be at least twice that (though a lot of stores end up charging more than 2x the price they pay - they have to pay mortgages, staff, insurance etc).

If you do it that way, you're making at least a minimum profit at wholesale. No reason to sell at wholesale if you're not making any money!

I'm sure I'm forgetting a lot of stuff, but that gives you a starting point to think about, at least...

Posted at 11:20 am Jun 23, 2009 EDT

If you want to sell wholesale, then your prices on Etsy (your retail prices) should be the same as the retail prices in the shops that buy from you to resell your items. So when you initially come up with your price for an item you need to take that into account.

Many, many etsy sellers are actually selling retail at the price that should be there wholesale price. That's fine if you never want to sell wholesale, but doesn't work if you do.

Posted at 11:20 am Jun 23, 2009 EDT

goheadoverheels is totally right... you need to make sure your prices here on etsy (which is a public, retail site) are RETAIL prices. Otherwise, you'll have a hard time selling wholesale. People (retailers) who are going to sell your product to the public want to be sure that YOU aren't ALSO selling to the public at the same wholesale price you sold to them... you have to be consistent.

Posted at 11:27 am Jun 23, 2009 EDT

My Etsy shop is set up at a discount because Etsy's market runs a bit different than the rest of the market. I've clearly stated that this shop is discounted so buyers (store buyers) don't presume a wholesale price from this shop's prices.

What you need to do to calculate your wholesale price is determine how much a piece costs you. Materials and time. Then add up to half that for profit. You do get to make a profit. That's the wholesale. Double it for your retail. You can have a MSRP which is a guide for stores on how much they can sell your product for. They can go up to the MSRP but not exceed it... however, they do have the option of selling it for less if that is their choice. The MSRP is a good guide for them to have an idea of what they can do for themselves by stocking with your product. If they've already bought wholesale from you, it doesn't matter what they sell it for, really. You've gotten your payment.

I am currently debating whether to start a section on my website to allow wholesale purchases to make things easier. I can determine a minimum quantity ordered and give a MSRP right there.

Posted at 11:35 am Jun 23, 2009 EDT

Here here GoHeadOverHeels - i have learned that lesson the hard way myself. I am still trying to figure out an appropriate price point form y items that would allow me to entain wholesale requests. I have actually raised my prices recently in response to similar discussion threads that I've been reading, since at my original price I was over breaking even (some of the time - until I had to buy more supplies - LOL). It's tricky - I am interested to see if it has any impact on my sales, not necesarily here because I don't sell a lot here, but face-to-face. I do think that most are selling items similar to mine at really cut-rate prices, which makes it tough to feel competitive and I'm sure you crave those e-mail notices of sales as I do :-)

We'll see! Good luck to you!

Posted at 11:35 am Jun 23, 2009 EDT

A veteran wholesaler (pillows, curtains, etc) gave me her formula:
materials x 3.5 = wholesale
wholesale x 2 = retail

That 350% markup hopefully covers labor and overhead -she got tired of tracking her hours.

Your Etsy prices should be at the retail amount in the formula.

Posted at 11:40 am Jun 23, 2009 EDT

livelaughlovesoap says:

They can go up to the MSRP but not exceed it... however, they do have the option of selling it for less if that is their choice.
Really?! I own a brick and mortar, and I haven't encountered that yet. My vendors say I shouldn't go BELOW their price... are you sure you don't have that backwards?

Posted at 11:41 am Jun 23, 2009 EDT

SaysYou says

Thanks for your valuable information. My pricing procedure has been like this, "Ah, that sounds about right..." based on what I would pay for such an item. Clearly I am making a big mistake!

Posted at 11:43 am Jun 23, 2009 EDT

adornedbyrobin says:

Your Etsy prices should be at the retail amount in the formula.
You're right :) But I think this is where most people struggle. If they put their prices at that level, they're probably going to "scare away" your everyday buyer here on etsy (who's gotten used to some pretty LOW prices). BUT, if you DON'T set them that way, you're not going to be able to get wholesale business (or, it's going to be a very sticky issue).

That's where the big decision comes in... WHO do you want to cater to... the end user/consuer/etsy buyer... OR, the retailer (selling wholesale). You need to figure out if you can generate enough wholesale leads/business to justify losing some business here on etsy. Which one is going to be your bread and butter?!

Posted at 11:45 am Jun 23, 2009 EDT

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