Selling your products wholesale to retailers can be a great revenue stream…if you’ve priced your products properly. Selling wholesale often means bigger orders with less effort. Instead of having to sell 50 items to 50 different customers, you can sell 50 items to a retailer in one transaction.
Of course, profit margins are lower when selling wholesale, but it does allow you to spend less time marketing, selling, and shipping directly to consumers. So there are some perks (especially if you’re an introvert like me and don’t enjoy selling).
Store owners and buyers are looking for a few key things from a business when considering if they want to carry their products.
If you want to attract more wholesale orders, be sure to avoid these 5 mistakes.
MISTAKE #1 – You Haven’t Thoughtfully Priced your Products
Store owners aren’t going to purchase products that don’t produce a good profit for them.
They also won’t be interested in products with price points that don’t make sense in relation to other items in their store.
>> Price your products too low and neither you nor the store profit, and it makes their other products seem overpriced.
>> Price your products too high and it makes your products seem overpriced and harder for the store to sell them.
Make sure you’re properly calculating your prices.
>> Here’s the RIGHT way to price handmade products (and it’s not by multiplying costs by 2 for wholesale pricing).
Keep track of how much every piece of material costs, pay yourself a fair wage and track how much time it takes to make each item.
And don’t forget about covering your overhead costs (*not sure what those are or how to cover them? Check out this article).
Watch out for all the little expenses that can add up (here’s a long list of expenses makers often miss).
>> If your prices are too low, raise them. Here’s how to do so without shoppers questioning your higher prices.
>> If your prices are too high, consider where you can reduce costs. Check out: What to do When your Prices are Too High
You can’t have a successful business if your prices aren’t set properly. Store owners know this and will avoid products with prices that seem “off”.
MISTAKE #2 – Your Products Don’t Fit Within a Box
Being creative is the best part of running a handmade business. You can still think outside the box, but your products must fit within an existing box first.
Once you’re in that box, then you can get creative.
Think about the major retailers you shop with that carry your type of product.
How would you describe the style of the store and the products they carry?
Each store has a specific style.
For example, a home goods store will follow either a modern style, or a farmhouse style, or a Scandinavian style, etc. Or, they might add their own spin (e.g. Urban Barn’s style is modern with a touch of rustic) but they fit within a popular style category first (e.g. Urban Barn first fits into the modern category).
If you want your products to work in a store, they must also fall under a popular style category.
Add your flair within it, but don’t make up a genre and expect store owners to understand how it will fit in.
For example, if I’m selling tea towels at a craft show and describe them as having “an eclectic, funky style with everything from vintage floral prints to sassy screen-printed quotes.”, store owners would have a hard time determining where and how they’d fit in.
I would need to fit within a popular box first (e.g. modern farmhouse decor style), and then add my unique spin (e.g. sassy screen-printed quotes).
Determine the category your products fit into. E.g.:
- Art, candles, table linens, etc. fit into the home decor category
- Jewelry, scarves, clothes, etc. fit into the fashion category
- face wash, creams, serums, etc. fit into the skincare category
Then research the popular subcategories within it.
- Home decor
- Skincare may be sub-categorized by type of skin, or a skin issue it addresses, or even by types of ingredients (e.g. organic or natural)
Choose one popular subcategory and make sure your products fit within it.
MISTAKE #3 – You Can’t Be Their Go-To Gal/Guy
When I worked for a major retailer, I was lucky enough to visit their head office a few times and get a glimpse behind the scenes.
One time, I was able to sit in on a buying meeting for their menswear section.
It was a meeting with a vendor selling men’s dress shirts.
But they weren’t presenting any and all types of men’s dress shirts; they presented ONLY men’s slim-fit dress shirts.
They were the retailer’s go-to vendor for slim-fit dress shirts.
The retailer used different vendors to purchase other styles of men’s dress shirts (e.g. classic-fit dress shirts, wrinkle-resistant dress shirts, etc.). That’s under the men’s dress shirt category alone. So you can imagine how many vendors they require to offer everything from dress pants, shirts, and blazers to jeans and t-shirts.
That’s how retailers offer a wide selection. They don’t make everything from men’s shirts to women’s jewelry.
They have a different vendor for each type of product.
Keep that in mind as a small handmade business.
You can’t make everything from art to pillows and expect to have a successful business.
Choose one thing and do it well.
Store owners need you to be their go-to gal/guy for one specific type of product.
For example, they aren’t likely to buy pillows, pottery, and tea towels in a variety of styles from one craft show vendor.
A store owner will likely walk right past a vendor offering too much selection because they know it’s impossible for them to create a wide variety of products well, and keep up with a store’s orders.
HOW TO SELL HANDMADE BEYOND FRIENDS & FAMILY will guide you through finding your niche within a saturated category (such as soap or jewelry), finding your signature style, and creating collections.
MISTAKE #4 – You Don’t Have a Strong Brand
A brand adds a level of professionalism and clearly shows customers the difference between your products and a competitor’s.
First, you must have a brand.
I like to think of a brand as a vibe and message you communicate through a variety of touchpoints (e.g. logo, colors, fonts, copy, etc.).
Second, you must clearly communicate your brand (here’s how to brand your craft show table/booth).
At a craft show, you have several ways to communicate your brand. For example, if your brand has a romantic feminine vibe, your tablecloth may be a soft pink, your signage may use a script font, and you may use flowers as a prop.
But you need to ensure your product and its packaging communicate your brand when you take it away from your craft show display or Etsy shop and put it on a shelf next to other products.
Store owners need a product to communicate its brand message so shoppers are able to understand, at a glance, why they should buy that product. They can’t always have a sales associate standing by, explaining the story behind each product the way you might be able to at a craft show.
Store owners/buyers also can’t educate each employee about your brand and what makes your products different; it must be obvious at a glance.
If your products lack branding, store owners may be hesitant to carry your products.
They want products that practically sell themselves; branding helps do that.
If your brand is non-existent or lacking, check out: HOW TO SELL HANDMADE BEYOND FRIENDS AND FAMILY. It will walk you through how to define your brand and explain all the areas it should be coming through.
MISTAKE #5 – Your Products Aren’t Easy to Merchandise
Your business is not only being judged on its products, it’s also being judged on how they’re displayed.
A store owner doesn’t have time to constantly play around to get products to sit just right or figure out how to correctly display them.
They have hundreds of products in their store and they need to be able to easily merchandise them all.
If store owners can imagine how your products will look in their store and see that they’ll neatly sit on a table, hang on a hook, or stack on a counter, they’re more likely to carry them.
Imagine if I’m selling tea towels at a craft show and I’ve rolled them up and placed them in a basket with signage displaying the price.
It’s unlikely store owners will have baskets or signage available to display my tea towels and their prices.
If instead, each tea towel has a plastic hook and is wrapped in a paper sleeve with my brand name, logo, main product feature (e.g. 100% organic linen), washing instructions, and price, they become a lot easier to display and sell. The paper sleeve also allows retailers to easily add a price sticker.
- A tagging gun can be used to add plastic J hooks to lighter items so they can be hung.
- Smaller display racks, risers, or stands may be an option for retailers to buy with a wholesale order (or it may be complimentary with a wholesale order that meets “minimum order” criteria). These would be beneficial for displaying stackable items (such as bars of soap) or items that need to be propped up.
- Jewelry should be sold on hanging cards or packaged in plastic packaging that can be hung.
Go to a retail store that carries your type of product and see how they’re displayed.
>> Are they sold in a box?
>> Are they typically folded on a shelf or hung on a rack?
>> What type of tags do they have?
Follow the display norms so it’s easy for store owners to slot your products onto their display fixtures.
Online, you may add one or two photos to a listing to show how your products might be displayed in a store setting.
And Remember…Be Professional
It takes a lot of hard work to start any business, but a brick-and-mortar store has higher overhead costs and greater risks than a small home-based business.
Store owners need to know:
>> they’re purchasing well-crafted products their customers won’t return because they’ve fallen apart
>> they’ll receive orders from vendors on time
>> a vendor is going to be professional to work with
If your craft show display doesn’t look professional, you don’t look enthused to be there, or your operation seems unorganized, store owners likely won’t take a chance.
Make sure your craft show display is up to snuff (need help? Everything that must be in place is covered here)
Make sure you look the part of a business owner representing a brand and be prepared for store owners (here’s what to wear to a craft show).
If a storeowner stops by your table and inquires about ordering, what will you say? Do you have a lookbook? Line sheets? Wholesale prices set?
You’ll come across as much more professional if you hand them a package with everything they need to place an order, than if you simply say “Cool! I’d love to have my products in your store. I haven’t thought about wholesale prices. Can you email me and I’ll put together some information for you?”
Hey, I’m Erin 🙂 I write about small business and craft show techniques I’ve learned from being a small business owner for almost 2 decades, selling at dozens of craft shows, and earning a diploma in Visual Communication Design. I hope you find my advice helpful!