Showing posts with label Wholesale. Show all posts
Showing posts with label Wholesale. Show all posts

Wednesday 24 March 2021

Contacting the Wholesaler


Credit: lunchshow.co.uk

Preparation

Whether preparing for a trade show or direct approach to a wholesaler, you need to get things to a good standard before making contact.

This can be a lot of work, but it will benefit your sales across all the venues you have work placed.  Wholesale gets your work out to multiple locations, develops your relations with shops and, by extension, to communities and to customers that you would not be able to reach by yourself.

Presentation materials

You need to have a clear identity to your work – something which binds the separate pieces together, making it clear that it is your sensibility that runs through the works.

You need to have a pricing strategy that runs through your range of products.  This will be connected to the target market that you have identified.  This is important to getting your work taken up by wholesalers and stores.

Excellent photographs of your work are needed in all the literature you produce for the buyers. Photography can make all the difference. Include photos that highlight your story and integrate with your products.  These should be consistent across all your materials.  They should have a unity of style whether shot on models, on background (normally plain white or black), and with props that support the story of your work.


Line sheets
credit: sewport.com


Line sheets are simple listings of each of your products with a code, title, sizes, and prices with each product line and variation on its own line on the paper. Create simple, readable line sheets with clear instructions on how to order, minimum order levels for discounts, and all your contact and banking details. If you have a required means to get in touch, make sure that is included on the line sheet.  The line sheet is essentially an order form which each of you will have a copy, and from which you will create the invoice.  The agreed payment terms, including supply dates should be written on the line sheet when agreed.


Information on product and maker


Write the material for promotion of your work and yourself clearly and concisely.  Start with the most important information about the business and products. Details and methods should come much later.

Be consistent in the way you describe your products.  Always consider the target market.  The wholesaler will be much more dispassionate about the products than the ultimate buyer will be. The descriptions show the trade what your target customer is like and so they can see what the fit between your work and the shop’s offering is.  Use the concepts and words that are familiar to the ultimate customer. 

Review your literature many times, proofread, and finally get a friend to look over the materials for style, spelling, consistency and accuracy.

Your complete contact information is required on every piece of printed material.  It also is needed on all online and email communications.


The meeting

Do the work to know who you are contacting by name and job title.  Use the person(s)’ names, refer to the business, store or shop, indicate you have followed any blog or social media postings, and if relevant, be knowledgeable about the local area.

Be selective in what of your work you present to the buyer. You don’t have to have all your lines of work in shops.  You probably could not cope if you did.  Consider what you can supply in quantity that will fit with the shop’s offering.  This will relate to the materials you can source in bulk (for discounts), and what you can produce quickly and easily.  To offer the best prices at a profit, you will need to determine processes that can be streamlined; designs that can be simplified; processes that can be done by less skilled people.


Remember the buyer’s interests during the meeting

They are looking for a range of work that has wide appeal – to both/all genders.  A price range for different works to appeal to a range of customers is needed. 

You need to demonstrate you know what is going on in the design and crafts field and can respond, keeping your offerings fresh and contemporary. Colours, themes, shapes, interests change, and you need to show you are aware of current trends.

Owners are looking for exclusivity.  Store owners want to sell items that no other venue in their area has available.  It is arguable that the more of your work a shop sells, the more exclusive the two of you should become.

Part of the appeal for the shop is signed and dated pieces.  It adds to the caché of the work.  This should be done discretely to avoid distracting from the whole of the work. 

Often owners expect not only well-made items, but displays too.  At the least, you should have presentation boxes that show off your work well.

credit: theproductmart.com


Trade Shows
The alternative to trekking around shops is to attend trade shows.

Trade shows are a place to make contacts – shop owners, fellow crafts people, and representatives.  Yes, you are there to get orders, but the people you meet may be your future customers. Your contacts might help you understand the market better, or move your work in different directions.  It is a place to gauge how your work is perceived, and what you might change or re-enforce.

Networking can help you in gaining new contacts, and even friends in the crafting community.  Visit other stands and arrange to have a coffee break during the show with those you find compatible. You can compare notes on the show or general business stories with those who are not in direct competition.

Have your product display in evidence at the show.  If that is not possible for some reason, have photographs of it in your literature that you can hand over. This enables potential buyers to see how your work might be displayed in their shop.

Take material to the show that you can hand out to prospective purchasers or representatives.  This could be inexpensive samples, the essential business cards, literature, and of course, the line sheet that you complete with the orders at the show, or be taken away if you cannot get them to commit immediately.  Be sure you get material from them too and that you record what they were interested in, so you can contact them after the show.  A contacts book for you to keep information in is essential.

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Selection of a gallery or shop in which to place your work is a complex interaction of commission levels; the value you place on your time in preparing for and attending craft fairs or putting your work online; the perceived prestige of the shop/gallery; the potential relationship between you and the outlet; and the relationship of the consignment, wholesale and retail prices.





Wednesday 10 March 2021

Craft and Wholesale Pricing

Craft fair pricing 
Image credit: craftprofessional.com

An important element to be considered in setting prices for pieces at a craft fair that are also consigned to a shop, is that the price the shop is selling your item at, is also the price you should be asking at craft fairs.  Without doing this you risk losing the consignment arrangement with shops and stores.

Also remember that when attending craft fairs or pop up shops, you are doing the setup, travel, marketing, sales, etc., that the shop is doing in a commission arrangement. That cost needs to be reflected in your price for the item at a craft fair, even if different work is being offered.  Especially if the craft fair is in the region of any of the shops or galleries you have placed similar items, you need to be fair to the shops in your pricing to be able to continue supplying them.  The same principle should apply to your online sales.

Some people solve this problem by having a craft fair range and a consignment range.  The craft fair items can be offered at a slightly lower price, if you must. But remember to factor in the costs of craft fair and pop-up shops even when pricing craft fair lines.

Wholesale pricing

Image credit: erplain.com 

Also note that your price on consignment needs to be high enough that you can take wholesale orders without losing money.  Wholesale orders are where the buyer pays you for the work in advance or upon delivery without taking a commission. They normally expect to buy at a lower than commission price and multiples of the work you are offering.

Maybe you feel you do not want to do wholesale work.  Stop a moment to consider that instinctive reaction. Wholesale means you have made the sale already without having to wait for the ultimate sale to occur, as you would on consignment. You do not have the administration of keeping track of stock in various galleries. You have certain, and almost immediate income. All these things make wholesale attractive.

It is the expectation that the wholesale price will be half or less of the retail price.  To make the piece affordable to the wholesaler and for you to still make a profit, you need to add something to the consignment price to enable the items to be sold by the wholesaler and the consignee at similar prices. This is most often less than the full difference between wholesale and consignment prices because you receive the money up front.  Cash can mean quite a lot.  You also need to have enough cushion to be able to give a discount on orders for multiples of the piece.  And that means you need to set the minimum order number to get that discount.

The bottom line (as they say in accountancy circles) is that you need to set the wholesale price first and then work back to the consignment price and retail price.

The wholesale price should be about 10% above the absolute minimum price where you can make the desired profit.  This enables you to offer that amount of discount for orders of multiples of your work.  This then implies the retail price is twice the wholesale plus taxes.  The consignment price will be about 70% to 60% of the retail price (based on 30%-40% commission levels).  More realistically, you can visualise the consignment price to be 10% to 20% higher than the wholesale price, leaving the shop to add their percentage on top of your price.


Image credit: seobook.com

Selection of a gallery or shop in which to place your work is a complex interaction of commission levels; the value you place on your time in preparing for and attending craft fairs or putting your work online; the perceived prestige of the shop/gallery; the potential relationship between you and the outlet; and the relationship of the consignment, wholesale and retail prices.

Wednesday 23 December 2020

Consignment

Why sell on consignment?


Biscuit Factory, Newcastle


Benefits
Consignment arrangements can add income additional to your other strategies of online, direct sales, craft fairs, pop-up shops, etc. 

It can develop new customers, and develop growth in both commercial and artistic terms. 

It exposes your work to new and different customers.

It can provide opportunities to partner with another small business (the shop) and benefit from mutual promotion.  

Craft fairs are not a long term means to sell your work.  Fairs are concentrated at certain times of the year.  You cannot attend all of them anyway.

Consignment spreads the income over the seasons.

Down sides
Your stock is tied up in the shop.
Your craft fair and online prices need to be similar to the retail prices at the shop(s) to which you consign work.


Further Action
Consignment can be beneficial to your sales, but it does require preparation and effort. 

You need to investigate shops and prepare for a meeting with the owners. You need to have a written contract even with friends and it should include all the elements and assumptions for the arrangements.

If you decide to pursue consignment arrangements, there are several things you need to consider and prepare.
  • Finding suitable shops and stores and assessing them.
  • Preparation for meeting the owner.
  • Knowing your terms
  • Placing and promotion of your work.
  • Maintaining the relationship.
  • Wholesaling


These aspects of consignment are the subject of postings to come.


Selection of a gallery or shop in which to place your work is a complex interaction of commission levels; the value you place on your time in preparing for and attending craft fairs or putting your work online; the perceived prestige of the shop/gallery; the potential relationship between you and the outlet; and the relationship of the consignment, wholesale and retail prices.


Other posts on consignment:

Wednesday 2 December 2020

Consignment Rates


The most common comments about the rates for consignment of pieces to a gallery or gift shop are that they are not fair. They are too high. The gallery is greedy. And so on. How do you judge whether the commission rates are fair?  What are the factors that should be considered?




Time
How much is your time worth?  

Think about the amount of time used to prepare, promote and attend craft fairs, pop up shops, or prepare for and administer online selling. Could you be using that time to make more things, or be with your family?  How much would it improve your quality of life to have to do less selling?



Costs

What are the costs of attending craft fairs?  

    You have to acquire display materials, whether you make or buy them.  You must travel to the event.  You have to be prepared to accept breakage risks from repeated movement of the pieces.  You must pay for the space at the craft fair.



Customer base
Is the shop’s market different than yours at craft fairs or online marketplaces?  
    Shops have a different clientele than craft fairs or online shops.  They spend effort in attracting customers.  They know their clientele and what kind of things will sell to them.  They are aware of the pricing levels needed for their visitors.

Decision
Answering these questions about time, costs and customer base will give you an assessment of whether consignment commission rates being offered are fair. 

Sunday 9 February 2020

Pricing, 2 - Pricing Structure

Creating a Pricing Structure

After calculating what you are going to charge, use the prices to create a pricing structure:

  • Selling price to the public - recommended retail price
  • Wholesale price/trade price
  • Sale or return price
  • Selling direct to the public

The selling price for the public should be the trade/wholesale price times two, plus tax. This means that the wholesale price is your bottom/lowest price that will give you a profit.


You should set your prices to realistically cover your costs, including time spent at an event, and know what you need to charge to make a profit. You charge double your wholesale price to cover your own costs of sales, such as packaging, stand hire, etc.


Do not undercut your other outlets, otherwise they will no longer want to sell your work.


Use selling to the public as an opportunity to test the market by exploring new products and new prices.



Selling to trade


The prices you offer to trade, i.e., your wholesale prices should cover your costs and provide some profit.


Galleries and shops have enormous overheads, which is why they put so much of a mark up on pieces, but remember they will be selling your work all of the time, so you can produce the work without interruption.


Before approaching wholesale or trade outlets you need to decide on:

  • Minimum order quantities.
  • Discount prices, and quantities to qualify.
  • How much of your work they will need to make a good display (it is in both of your interests to display your work as well as possible).
  • Consider charges for carriage or if you want to offer carriage free.
  • Agree what the payment terms are – pro forma, payment on delivery or credit. If offering credit, ask for trade references.

Sale or Return


If you provide work on consignment (sale or return), make sure you know exactly what the terms are. Keep a close eye on the pieces, as there are risks that may or may not be covered by the seller


You do not want your work out for too long, so if it is not selling after 6 months it is time to move it. That means keeping records of where your work is and when it was placed.



Review your prices annually.





More information is available 
Establishing the costs
Creating a pricing structure
Terms and conditions of sales
Customer relations


Payment