How does one choose & what is the difference?
Wholesale is selling items for less than what you would sell the product for in a store or an online shop. But when you sell wholesale, the purchaser is buying in bulk. The seller can define what bulk is. 10, 20, 100 items of each item? You have to decide that.
A wholesale formula that I use & that is used by many pros is this:
Materials + Labor + Expenses + Profit = Wholesale
(Tip: Multiply formula above x2 & that is your retail price)
I have had a couple experiences with wholesale. One that bombed big time & one that has been successul thus far!
Allow me to talk about the one that bombed. Because there are always lessons & golden nuggets to be found in mistakes. Ones that hurt so bad that you are determined never to repeat again!
My family & I were on vacation somewhere in Michigan. I was wandering in and out of the quaint little shops and came upon one that carried many products that were Made in Michigan. As I was going around through the shop, I notice that their aprons were not made in Michigan. Aprons are one of my biggest sellers & it's what started this whole journey. My husband approached me & gently nudged me to talk to the lady. With my heart pounding, I did. As I went for my purse, I realized I didn't have it on me. All I had was a class sinch sack on my back with survival items for us (water, snacks etc.) She handed me her card & I promised her I would be in touch.
And then I was super excited. (I have learned to calm my excitement since then, because not everything works out.)
Once I returned home I sent her a package of a few of my items, including an apron, so she could see the quality of my work.
Once I returned home I whipped together some wholesale pricing & min. bulk per item. She agreed via email & included the items & numbers.
Perfect & so I thought.
During the process of figuring this out & I was just about to start her order, she came back with her own numbers & what she was willing to pay for wholesale. It was a true kick in the gut. The pricing was not even enough to cover the cost of fabric.
After some disappointment & realizing this wasn't going to work out, I came to terms with the fact that it wasn't worth my precious time & money to be working in my basement slaving over items & get paid pennies for it. I was busy enough with sales & the way I was selling my items.
I participated in an Art Fair in early Spring. It was a larger show at a local high school. I worked hard on staying standing by my table & engaging in conversation with customers & passer byers. A quick smile. A compliment about something they had or were wearing.
During the hours of the show I would get the occasional, "I like your items, here is some info on a show I am having in a few months." They would do that to everyone. So it wasn't real personal & I would just toss the show info aside. Then another lady stopped by my table & handed me her business card & said that she was opening a shop soon & she really liked my items. She came to the show to check out another potential vendor that she was interested in. She wanted to look at their items in person, but she came across mine on her way.
Her words to me were, "Do you sell wholesale?"
Of course I said "Yes!" But in my heart I knew I needed to re-evaluate the process & not make the same mistakes.
I jotted down, "Wholesale Lady" on the back of her biz card & stuck it in my pile of papers.
I am happy to say that this relationship has worked out!
*I took my time & wrote out & figured out my numbers before I contacted her. I now have a wholesale pricing sheet!
*Was I anxious & excited like a preteen school girl, of course. But I had disappointment in the past & I was determine not to make that mistake.
*Be firm in your pricing.
*I hand delivered the first batch of product. I wanted to cheer her on & see her store. I also brought a few items she didn't order but wanted to show her in person. She bought one on the spot & has ordered more since.
*Store owners that have a true appreciation for handmade with purchase it from you!
*When a store owner buys wholesale, she has drive to sell the products so she can make her money back!!!
*Do not sell yourself short!
A reality that I realized from my first encounter with wholesale was that many of the shops at tourist locations buy their items for dirt cheap because they are made overseas. Store owners of little boutique shops that are quaint & cute attend vendor shows that sell this stuff for pennies. Chicago & NYC are a few of the locations for these shows. So when a handmade item that is made in the America is sold at wholesale price, it's out of their budget for them. They are sticker shocked!
But in the last few years more & more store owners are finding that customers want products that are unique & are handcrafted on U.S. soil.
Next, we will discuss Consignment Retail (shops that charge monthly rent or a % of the sale of your item).
*Please email me at firstname.lastname@example.org, if you are interested in wholesale pricing list for lil' alice items.