When it comes to my business, nothing has had a bigger impact than selling to stores. It’s where over 90% of my sales of jewelry and other products comes from. It’s what’s enabled me to hire someone to do production and truly grow my business.
If it wasn’t for wholesale, I wouldn’t have a business.
But I see so many makers resisting getting into wholesale because of a few misled beliefs. And these beliefs could literally be costing your thousands, if not hundreds of thousands of dollars of revenue.
Here are three common myths that might be stoping you from diving into wholesale:
Myth #1: Selling to stores means giving away half my profits.
It’s a mistake to think that when you sell to stores, they take away half your retail price. When you sell to stores, you set a wholesale price and stores mark up from there. Which means you need to price your products so they’re profitable at the wholesale price.
This is the biggest shift I see most makers needing to make in order to get into wholesale, but once you get it right, it can have a major impact on your business. Because not only does pricing so you’re profitable at the wholesale price point mean you can start selling to stores, it also means that any time you do sell retail (like in your online store or at a craft show), your profit margin is a whole lot bigger.
Myth #2: Everyone is just shopping online these days.
You hear it all the time. Brick and mortar is dead. Everyone is just shopping online these days. But while online shopping is certainly growing, in the US, only 6% of all retail sales are taking place online.
Only 6%.
Where are the majority of sales transactions taking place? Still in stores. So if you aren’t selling to stores, you’re missing out on a big chunk of potential customers.
Myth #3: I can’t afford to do a trade show, so that means wholesale is out for me.
First off, let me say that I love trade shows. They are a huge accelerator for most wholesale businesses.
But you can certainly start building a successful wholesale business without them. (I know someone who picked up hundreds of stores simply by waking up every morning and sending lots of emails.)
And if you want to do a trade show? It may not be as unaffordable as you think. Picking the right show and budgeting accordingly can keep your costs down, and with social and crowd funding sites becoming the new norm, there’s never been more creative options for funding your first trade show.
Now it’s your turn! Share in the comments: what’s holding you back from getting into wholesale?
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Want help growing your wholesale business? Check out my best selling class on Creative Live, Sell Your Products to Retailers.
What do you suggest for handmade items? I make large wood flowers. Many of them I could sell wholesale, but I’m not sure I should try a catalog or walk into a brick and mortar store.
Any thoughts on the difference between trying to break into the catalog market (in my case maybe Sundance -style items) or trying to find a local store that carries similar items?
thank you!
Lynda
Lynda – There’s no reason that you can’t do both! Stores are great because it gives people a chance to see your product in real space, and that can definitely help with sales. But a major catalog certainly has the advantage of higher distribution and higher volume.
Thanks, Megan! You’re always encouraging and informative. I’ve participated in your pricing and marketing seminars and you have made a huge difference in the way I price my items. The problem I’m having is that people keep saying that my prices are high and this is with markets AND wholesale. I definitely think they could–and perhaps should be–higher, but I hear this so much. I had a shop out of state that was selling on consignment. She wanted to switch to wholesale, and so did I, but I knew my prices would have to be a little higher than what she was used to. She pulled the plug on our relationship. Now I think perhaps she thought what she paid would go down when switching to wholesale, not go up. How do I combat this thinking? The person who is acting as sales rep in MI keeps telling me that this is the only complain people have at the small trade show she does. But I can’t spend 2 hours or more on a crocheted hat or cowl I designed and then only get $25 for it so they can sell it at $50. That leaves nothing for me and for putting toward my biz. This is what is making me think that wholesale may not be the way to go when what you sell is extremely labor intensive and good yarn isn’t cheap. What do you think?
Alicia – Hopefully you were able to tune in for today’s session on Creative Live, as we really dove into the pricing and value piece!
Thanks so much, Megan! Yes! I’ve been wanting to take your wholesale course for a while, but couldn’t afford it. So I’m very thankful you decided to offer the entire course on CreativeLive. I’m sorry that I wasn’t able to be there live to ask a few questions, but I did purchase the course during the weekend for the sale price. I’m going through all of the videos now. Great info!
Re: the pricing segment: Most of the live participants indicated that they could make their products quickly. It can take me 45 minutes up to hours and hours to complete an item. So I don’t think the cost method works for crochet and knit fashion accessories. (I’m always trying to come up with less time consuming pieces, but . . .) I don’t think my prices are where they need to be yet, but they are so much better than they were. And I’ve got a lot more cool stuff than when I took your pricing and marketing seminars. Been getting great comments and better sales at craft markets! I feel SO much better about my prices and I have you to thank!
Hi Megan!
The biggest thing holding me back from wholesale is the time it takes to make enough of a stock to sell to b&m shops. I have the assumption that a shop will buy from me & there will only be a small amount of time for me to make a large quantity of items. What kind of quantity is involved in wholesaling?
Thank you for the insightful & encouraging post!
Great question Jessica! As the seller, you can dictate how long it will take to make a purchase, so you can give yourself ample time. If you’re selling to smaller stores, most quantities will be low (stores might even only by one of each of your products) so it won’t require crazy volume. Hopefully you can tune in to Day 2 on Creative Live tomorrow, because we’ll be talking more about this!
Thanks Megan!
I am looking to grow the wholesale side of my business but a trade show isn’t in the budget for now (hopefully later). So I love the idea of just getting out there with my line sheet and getting to stores. Its still work but only a time investment. Thanks for the tips and the knowledge to know it can just work.
-fionna
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Hi Megan!
How do you feel about online wholesale platforms, like http://www.wholesalecrafts.com/ or Vianza? Is it possible to do it all online?
peggy
Peggy – You can certainly use an online platform to sell, but ultimately, I still love the personal interaction that I get selling products to stores. At the end of the day, we’re selling physical products that stores are selling in a physical space, and it helps for buyers to see them in person.
I just finished watching your Creative Live course and it was AWESOME! You have helped me so much with pricing. Thank you so much for sharing your knowledge.
Where to start…
I stumbled across your course on CreativeLive this week and thought, what the hell! Might as well check it out.
Now just a few days later I’m not ready to look at the shows yet but I’ve sent in a proposal to my first shop and am looking into other opportunities to do some wholesale work for my photography prints & stationary. I still have a whole lot of work to do on the handmade business side of things including craft fairs to get more consumer feedback but selling wholesale is one more thing that i need to closely examine and add to my business repertoire. Do you have any advice on selling art and art related items like photography wholesale?
Rebecca
Depending on price point, selling art (particularly prints) and photography wholesale really just works the same way. The biggest challenge with art and photography for most stores (this is as opposed to galleries) is the challenge of making space to display art, so I would suggest doing some recon in your target stores to see how they display/sell art and photography.
I think my biggest challenge is not being sure of how to produce in larger quantities. I have a couple wholesale customers right now but they are small retailers and order “6 of those and 8 of those” kind of thing. I’ve just been approached by a BIG retailer and am at a lose about what to do. Headed over to Creative Live right now for the seminar. Thanks Megan!
Genevieve
Definitely watch the parts about working with different types of stores and setting your wholesale terms, because they goal is that you want to feel in control of your wholesale relationship!
Megan,
You’ve been on my radar awhile now and I’d love to connect at some point. Your information is very valuable for makers. I founded an online platform that brings handmade artisans together with wholesale boutique buyers. We’ve represented our artisan clients at a couple of wholesale trade shows in Chicago. We are going to begin offering online wholesale ordering this fall…great resource for makers who do or want to do wholesale. I will peruse your site and perhaps pass you on as a resource via my biz. Thanks!
Tracy