I often hear designers talk about wanting to see their work in major chain stores.
It’s an understandable goal. Who wouldn’t want to see their work on the shelves of their favorite major retailer?
But it’s important to consider whether pursuing those stores is worth it from a business standpoint.
Sure, those stores come with major orders and some potential prestige. But they also come with ironclad contracts, detailed specifications, and often, prices that have been negotiated below your standard wholesale price.
I have friends who’ve had great experiences working with chain stores, and friends who’ve had not so great experiences.
If your dream is to see your work sold in major retailers, it’s important to ask yourself why. Is it for your ego, or is it really what’s best for the bottom line?
Because it is possible to build a successful wholesale business without selling to major retailers. I know, because I’ve done it.
I’m not saying that I’d turn down a major chain if they called. But I love the flexibility and personal connections I get working with my museum stores, craft galleries, and boutiques. I love feeling more like a partner than a vendor. And I love sending my work to stores that are committed to their local area.
I firmly believe that there is no one single path to success when it comes to running your business. What works for me isn’t necessarily what will work for you. But if you’ve been dreaming of getting your work into a certain major store, take a minute and ask yourself why. If it’s what’s best for your business, go for it. But remember, there’s more than one way to build a successful wholesale business.
Share your thoughts: Do you aspire to have work in major retailers? And why? And if you’ve sold your work to major retailers, was it worth it?
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Want help growing your wholesale business? Check out my best selling class on Creative Live, Sell Your Products to Retailers.
Interesting question. This is something I have personal experience with and working with larger stores in a beneficial way was a goal for my business when I began.
It certainly depends on your business model and production capacity. For makers without the structure in place to make mass quantities, it doesn’t make sense unless there is a long lead time, production you can put into play, or some other agreement (like, a designer credit and flat rate or cut of the profits, while the retailer or their manufacturer of choice creates the merchandise).
Also, it depends on your cash flow. If you go after those big orders, and get them, you may be looking at tens of thousands of dollars to produce what that store’s purchase order requests – and you may not be ready to foot the bill, even though payment will come after the order ships to them.
Lastly, even if you can create the quantity, and you can give a discount (which shouldn’t surprise people since larger retailers are buying more than the average bear – personally I believe people ordering in mass qtys are *always* entitled to a discount) – costs can balloon. Buying and printing bar codes, figuring out routing instructions, and working through the casepack size, quantity, excel spreadsheets and other required, retailer-specific bits of info can be seriously demanding and take a lot of mental energy (and capital.)
Personally, I think it is worth pursuing. But, the risks are huge for people without a lot of backing support, and there are many pitfalls if you don’t know what you’re doing. If you pace yourself and don’t let the situation make you anxious, it’s possible to do business, make a profit, and…learn valuable info for the *next* time. One great thing about larger retailers is that once they get you in, they almost always want to reorder.
The big retailer question is an interesting one: I do think it’s a good learning lesson and resume builder, but there is something very unique about working with individual boutiques, galleries, etc. that connects you in to a community and local economies. There’s something very special about being part of cities and towns in that way, and generally the store owners have a greater reverence for your work. Their success and your success are more closely tied than with a large retailer, so there’s a kind collaboration there. Those are my thoughts!
I think the (possible) name recognition that *might* come from being sold by a major retailer would be nice, but I wouldn’t be interested in it exactly for the reasons you mentioned. And yeah–I guess one would really have to sit down and ponder–what does “having a major contract” and/or “having name recognition” really translate into for both self and bottom line”?
My (OC) business life is already fairly involved and tightly-run as it is without having to deal with major production, contract, cost, or delivery issues. On top of that, it seems like it would be a huge time and energy zapper which would kill my creativity and end up making me hate what I do. I know me, and I think I’d feel as if I were selling my soul to make a buck.
Add to that, as Susy mentioned in her comment, I’d be one of those who didn’t know what I was doing in this arena–and I’m really tired of learning business lessons (despite the best of my KSAs and prior research) the hard way.
Your sentence
=> “Is it for your ego, or is it really what’s best for the bottom line?”
I’d like to think that I’m over myself ::chuckle::, which makes the answer really easy for me. I do what’s best for both my bottom line and my sanity. Ego be damned. [Of course, I say that now, but if I were ever approached… (on the flip side of this kind of stuff, though I’d be very much inclined to take a pass on such an opportunity, I’ve learned never to say never. ;-P)]
I forgot to add, great post! –I’ve always wondered if I was an oddball for thinking that this kind of thing wasn’t something that I necessarily wanted to pursue (even with my new, more “mainstream” wholesale lines I have coming down the pipes).
This is definitely a question worth thinking about. I think it really depends on what your business goals and strategies are and if getting your products on the shelves of major retailers aligns with those goals, strategies, not to mention your target niche and demographic. There’s nothing wrong with this, but you are correct wondering into this type of territory comes with tight contracts, specs and wholesale prices way below the ones you’ve set for your products.
After reading your post I thought sure that sounds great! But then I read Susy’s post and thought ugh, that sounds awful. The $ sounds great, but I don’t know if it would be worth the constraints. I like having flexibility. I like your comment about feeling like a partner and not a vendor. I’m still an artist and want control over my product.
One other thing to consider – if you DO sell to a major retailer, some of your smaller accounts may no longer carry your product. I used to be a buyer for an independent book and toy store. One of my directives was to carry items that couldn’t be found anywhere else. Some of my favorite vendors started selling to Target and I had to stop buying from them.
Hi Megan,
Great article and great discussion! Like you said, many producers dream of having their products in major retail outlets, but have no clue to the ups and downs (and their are lots of downs) of having that happen.
Thanks for sharing …. and I featured your article in my blog as well (to be published on Sept 1): http://www.SellingtoGiftShops.com
Sandy Dell
Good post! A big consideration in working with a major retailer is how much of your production time will be devoted to that one retailer. Will you still be able to supply your other smaller accounts? Your production time is limited. Putting all your resources into one account can backfire. With today’s economic climate, stores are closing at an alarming rate. You need to keep the smaller accounts supplied and NOT limit your time to only one major account. Many artists were in trouble when People’s Pottery went under. You don’t want that to happen to you. It’s like investing in the stock market. You don’t put all your money into one stock. You diversify, spread it around, so if one fails, you still have others to work with.
I should clarify that I don’t think one has to choose between selling to larger retailers and smaller boutiques. It’s business. If a retailer of any size asks me to make something in a way I cannot live with, or in a way you think will cost relationships that you’ve built…I might choose not to engage with them. I have turned down business in that case and never lost a wink of sleep.
I am of the opinion that working with larger stores — or smaller stores — should not pigeonhole a designer as not fighting the “good fight”. After all, if a customer walked into a little indie boutique and wanted to buy 100, or 1,000 of something from them, you can bet they would contact the mfr. and try and fill the order.
*Some* larger stores will try and outprice, and could will anger your smaller retailers. You can only try and be as sensitive as possible to all. There are many larger retailers who inquire what retail price you suggest and price to that. There are also smaller stores who mark up like crazy. So, it’s a two way street.
We should all – large and small – want each other to do *well* and do business well, and do as much business as we can, and succeed in a healthy way. Personally, I am learning to take time to make good decisions, on a case by case basis, and trying to be as up front and as much of a resource for my retailers – of all sizes – as I can.
I did sell to a very upscale boutique in a prestigious mall in OC California. But it didn’t pay despite the fact that I could say I was selling at such and such. First, I got bored
Repeating myself. Then! I had to deal with their mishandling o f the merchandise. One piece was returned with a high heel mark in it, where it was stepped on in their show wndow…. I’ve had other offers since to do wholesale, but I have turned them down. I am going to do a OOAK show in Domincan Republic in Sept. And have already been approached online by a wholesaler. If their terms aren ’t right, I’ll be plodding along as usual, just selling locally.
I love your articles. I know of one seller who was approached by a large retail establishment with stores nationwide who asked the seller to create huge amounts of product. During the time they staffed up and laid out a lot of capital to rent a place to make the product, the rest of their existing business, virtually dried up. The ride was over in just one year.
It is important not to put all your eggs in one basket. Maintain 3 – 5 customers, so that your business isn’t in the hands of one and if that one goes, so goes your business. Remember, if your product doesn’t sell the way they hoped, they won’t reorder.
I supplied a major retailer on concession(consignment), to my own detriment. Their targets were unrealistic and unsustainable. It was a battle on the shop floor with other indie designers for prime selling space. And it took up all of my time, to the point where I had to give up everything else. After the third year I realised that even if I consistently reached my targets, I was still not making a decent profit. As it was a high street store, I was competing with there own brand, mass-produced cheap stock, so it was a race to the bottom. Competition between the designers was fierce, which was extremely draining.In order to make it work, I would need to get my stock mass-produced, but this would be a huge cost up front and I still held all the risk for the stock. Plus the fact that I never got time to really design properly, I ended up miserable, sick and I eventually ran out of steam.
My experience with a major retailer was not very good. When I work with craft galleries, the buyer is usually the owner, and they are typically very sharp minds and plugged into their businesses. With the major retailer, I was working with a staff of buyers, some were good and some weren’t. There are so many small details when dealing in large quantities, and the buyers didn’t seem to be paying attention to the details from their end. Lots of miscommunication from them too. I wouldn’t rule out working with major outlets again, but only if the people involved meet my standards of professionalism.
First I have to say so glad Kait Emerson Designs led me to your blog. It is so up my alley and I can’t wait to read more. it is in my plan to start a fashion blog journaling my experiences as a designer breaking into the wholesale side of this business.
I am a firm believer that you have to diversify and understand that each aspect of your business must be managed differently. Know your client. On the online retail side know people compare and deal shop and market accordingly. Wholesaleing to boutiques is a fabulous partnership and they will value a unique product and it’s price point. These two markets alone can be enough but I have to admit I still have my eye on a larger chain transaction.
Susy is right though-there is a lot involved and retailers want a quality product at a lower price point. To me the only way to do this is mass produce oversseas. You will need capital up front and often chains won’t sign you unless they see they have funding. Another thing to keep in mind is charge backs. Some large chains will litterally returna dn charge back product that doesn’t sale. Others with return policies that allow the customer to return at any time used or not also charge those returns back to the mfg.
Another thing to consider is that if you offer boutiques a product at $20 and the large retailer wants it for $15 you may be able to swing it but when the large retailer now underprices all your boutiques what will happen to those relationships and what if your run with the large retailer only lasts one trial season. Belly up! Consider creating a different product line exclusive to the large retailer to avoid this.
I say start small-get your feet wet with boutiques-grow at a healthy paces so you can line up quality production partners as you grow. WOULD LOVE A POST ON THIS! I am in these growing pains right now. when you are ready to take the plunge with a large retailer do your homework and negotiate contracts so they are fair to all parties-and if it doesn’t make sense to the bottom line be prepared to walk away.
With some of the larger reatilers too, you may have a longer time before you get your payment, I have heard of 90 days not being that uncommon, which may be Ok once the ball is rolling, but I run a very tight ship and that would be very difficult for me. I sometimes think I would just rather do Farmers Markets and sell through my websites, I enjoy the feedback from my customers, but the cool thing about wholesale is to ship a box of soap and get a check, no standing in the cold for it. I guess as brought out above, diversity is a big deal, the more venues you entertain the better!
Thanks for the post and comments! Fun to be around my own “tribe” 🙂
I would like to add a comment based on my experience. My mother had an artisan based business in Mexico and sold her sweaters to one of the major mexican department stores. She decided early on not to compete with the mass manufactured sweaters since she would never be able to compete with machines. She set her prices high to come in as a luxury item. She had an amazing buyer who understood the value of her product and worked with her so she could get slowly up to the volume she needed. I learned not to be afraid to negotiate. If they really want your product they will go back and forth until an agreement is reached.
Also, it is not the same to sell to Bergdorf Goodman in NY – one location with sales people who are used to selling high end and hand made goods – than it is to sell to Macy’s with hundreds of stores and a sales force of thousands. You need to consider how your product will fit into the store and wether the sales people will be able to convey the added value to your product (design, process, story…) the way smaller galleries can.
One other aspect to consider is wether your product can lend itself to mass production. Thanks to Megan’s reading list, I read my favorite business book so far: Craft Inc by
Meg Mateo Ilasco. In it there is and interview with Jonathan Adler about how he went from hand making each object to working with vendors. You do become a business manager and it’s hard to focus on design but if you can make the transition like he did, you will eventually get back to focusing on design and hire a production manager.
If you find a good match with a store and you can produce the quantities needed, then financing is not too hard to get. If this is for you, you can go to a bank and show them the purchase order from the major retailer and you will most likely get the financing.
In the end, you need to know your product and yourself. Like Megan said: “it’s important to ask yourself why” Know the why of your business and what its essence is. If the essence is scalable then the rest is up to you.