How to sell retail business
6 Things to Know When Selling to Small Retail Stores
If you want to sell your handmade products to small retail stores,
you need to watch this video first or I'm going to share with you six things you
need to know so that you can set yourself up for success and make a ton of sales
and money selling wholesale.
Hey there, my name is Mei and I help makers,
artists and designers create a consistent income from selling their handmade
products online.
The first and most important thing you need to know is your pricing.
This is one of the biggest things that I see new handmade business owners do is
not know how wholesale pricing works.
So if you're thinking about selling your products wholesale,
then you're being really,
proactive by watching this video and doing your research.
But if you're fairly new in business,
maybe you've even had a brick and mortar store buy or approach you to ask you
about your wholesale information,
so then you might start panicking and do a quick Google search and go onto
YouTube to find out how to do it and hopefully that's how you found this video.
When you start doing wholesale store,
buyers are going to expect your wholesale prices to be at least 50% of your
regular retail prices.
So if you sell a tee shirt for $28 stores expect you to sell them for $14
wholesale to them, if not less. Now,
if this is the first time you're hearing this,
it might sound like a huge decrease in your prices,
but don't forget the reason this is is because these store buyers have to make a
profit too, right?
They're buying your products with the purpose of reselling them to their own
customers. Well, you might be wondering, okay, I understand that,
but why does it have to be such a huge cut?
It's because running physical stores are extremely expensive.
We're actually really lucky for those of us who are solely online businesses
only, you know, we don't have to pay for rent for a space.
You don't have to pay for electricity or other utility bills for a separate
building other than your home.
You don't have to pay for employees to help manage your store.
You don't have to pay for expensive insurance or business licenses.
I have a friend who's in the restaurant business and granted restaurants are in
their own special category of business,
but he told me that most restaurants go out of business after the first year and
he's in his third year, which is great,
but he's only breaking even in large part because he has to pay off a lot of
loans from when he started the business.
So what will help your wholesale deal go so much more smoothly and successfully?
It's just putting yourself in the shoes of your wholesale customers.
They need to make money too. So right off the bat,
I've had so many people reach out to me telling me how they were approached for
the first time by a wholesaler and they didn't know what to tell them.
So they just said their prices were 25% less of their retail pricing and that
they hope that was okay.
It's not going to be okay and not enough and it's likely you're going to turn
away. That wholesale customer, this 50% number is not a number that I made up.
It is the industry standard and some different categories of products have
slightly different percentages,
but the general number is 50% and the larger the store,
like say you work with a department store or a store that has multiple locations
or franchise, they're going to want even lower prices from you.
I've had to go as far as 80% of my retail prices, which sounds way too low,
but of course this was for an order that was over $10,000 so ultimately I was
still profitable.
The way wholesale works anyway is you're not as profitable item,
but you can be more profitable as a whole for the entire order because wholesale
stores are required to buy your products in volume.
The second thing you need to know when selling to small retail stores is can you
handle production? Depending on what you make.
Selling wholesale may not ever be something you do in your business,
but if you're able to create a product or even a special collection in your shop
that's just for wholesale buyers.
Selling wholesale is a really great way to grow your business and have a new
stream of income.
It really helps diversify where your money's coming from and it helps so much
with that roller coaster feeling with your business and that not knowing when
your next sale is going to come in because sales aren't consistent for the more
income streams you have, the less this becomes a problem.
So production can you handle making your product in volume?
And if you can't just yet, that's okay.
Most of us starting out aren't thinking about making our products in quantity
like that, right? Well,
what I recommend is that you start thinking about how to make your products in a
faster way.
One idea for you that will instantly save you time making your products is by
doing them in an assembly line style.
So instead of making one product from start to finish in one sitting,
you would break up your product design into as many different separate steps as
possible. Then say you were to make an order of 20 of your products,
you would do the first step for all 20 of your products.
Then the second step for all 20 and the third and so on.
It will obviously take you more time to make 20 products than to make just one,
but overall you'll be spending less time per product doing it this way.
Third, you need to have really good branding.
That means good photos and a cohesive product line.
This is something that I've heard really appeals to store buyers.
If you were to email a store buyer,
this can be what makes them email you back versus not responding to your email
at home. Now,
what's interesting is while I have heard that it helps to have already had
success of your own selling in your own website,
having gotten your own press and in the social media following well,
all of that does help you become a slightly more attractive to wholesale buyers.
I have also seen many businesses that have none of those things and almost even
zero online presence,
but their entire business is built off of just selling wholesale,
so those things help but you don't need them.
All you need is a good product and you have a line of product designs that are
cohesive where there's a similar common thread or style,
bringing them all together and you have beautiful photos of your work that's
going to make selling to stores a lot easier for you.
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That helps us video get shown to more people and this is truly why I create
these videos to help people and so let's help spread the word. Okay?
The fourth thing to know is how are your products going to be displayed in
stores? Generally speaking, right? If you sell t-shirts,
they're probably going to be put on hangers on a clothing rack.
If you sell jewelry, your products might go in a glass case,
but every product and brand is going to be different and to ensure your success
selling wholesale, you want to think about this now,
your products packaging and how it's displayed is so important because if it's
displayed not so attractively,
customers won't be interested to look at your products and the store isn't going
to sell any of your work and you want them to sell your products.
You want the stores to make money from your work so they run out of your stuff
and come back to make more orders from you, right?
Some stores will will take the responsibility of thinking about how to best
display your products.
They usually have their own collection of different display racks and cases and
tables they can use,
but I've sold my jewelry in over a hundred stores and I've done wholesale long
enough to know that.
I can tell you that you're going to have a much easier time selling your
products when you make the buyer's life easy by having kind of like an all in
one solution. If they bought from me.
This means put your products and packaging if they need it.
An offer to sell them display units to hold all your products together.
And the display unit doesn't even have to be expensive. For example,
I offer white display racks to my retailers for free once they've placed over
$300 worth of an order.
And I buy these display racks from Palay Display for about $6 each end.
If you've watched my other videos,
you might know that I have different packaging for my jewelry depending on when
I'm selling it to an online customer or if I'm selling it to a store.
When people buy my products online,
they're usually buying them as gifts for other people.
So I gift box all orders,
all the jewelry go into boxes with a ribbon tied on top and a paper doily in
between the box and never been.
So obviously this wouldn't work in a physical store setting because people can't
see the jewelry and they would need to smell, see and look at it.
So I put them in clear boxes that hang on my display rack instead.
So think about how your products should best be displayed in a store that will
make them easier to sell.
Then spend some time creating your packaging for wholesale. Number five,
you have to be very persistent when you're selling your products to small retail
stores. Don't forget,
when you're approaching a store buyer to buy your products,
you're making a really, really big ask. Like I said before, right?
Let's put yourself in the buyer's shoes.
You're asking them to take a risk with you.
Pay you money for products they're not sure is going to sell.
They have no guarantee that they will make money from your products.
It's a big decision that they have to make.
So if you don't hear back from a store buyer,
whether they approached you first or you approach them,
don't take that as a sign that they don't ever want to buy from you.
Store buyers have a limited budget to shop around with,
and it also depends on the season and what other products that they are already
selling that they want to make reorders for.
Sometimes the timing ends up being not so great,
but that doesn't mean they're not going to buy from you later,
six months or one year or two years later even. So keep in touch with them.
Follow up with them every few months. Tell them about new designs you have.
Just keep them in the loop so you're fresh and front of mind in your head.
Many times when you reach out to stores,
you're probably never going to get a response and for good reason,
everything I just said,
but also because you're not the only one reaching out to them,
they probably have a ton of other shops emailing them to ask if they'll carry
their products. The way you will stand out is by being persistent.
You can also offer to send the buyer free samples of your work.
Remember how I said the risk is all in the buyer,
so help share in that risk.
If you want this to work and if you want to make sales by offering them samples
of your products,
they get to experience them firsthand and if you have ever done craft shows
well, but struggle to sell online,
you know your products do better in person when people have a chance to touch it
and feel it and wear it and smell it.
Also consider offering generous returns,
exchange and refund policies. Again,
you want to make life easy and make them feel like working with you won't be a
risk, right? I offer a 100% happiness guarantee.
We're all, we fund their order completely.
If the store can't sell 30% of what they bought from me in three months,
this shows the buyer how confident I am with my products,
but it also gives them comfort and support and knowing that they have a plan B
in case your products don't sell that well.
Now I know you might be thinking that you're afraid to do something like that
because you don't want to be taken advantage of. Right?
Well after selling in over a hundred stores,
I've only ever had one store exercise.
My guarantee policy one out of over a hundred yes,
it definitely hurt. It stung. It wasn't a happy feeling for me personally,
but this was less than 1% when you consider how many more sales I was able to
get because I did have this policy in place that made retailers comfortable to
buy from me. So when you weigh the pros and cons,
having this guarantee policy without a doubt helps my business more than hurts
it. Number six, know,
that the profits or the real money from selling wholesale really comes in from
the reorders, not just the first order.
What I mean by this is that first order you get from a retailer might feel like
it was a very small order and it might feel like you worked so hard to convince
them to buy from you and it might feel like, nah, it just wasn't worth it.
But if you make a good product and your product sells in their store,
that store buyer is going to come back and buy from you again. And again,
these are called we orders.
Their first order might have been small because they were just testing the
waters. They didn't want to take that big of a risk up front. Right?
Make a smaller order.
Now see how their customers like your product and go from there. Right?
Selling wholesale is a longterm game so you want to be prepared to spend time
building relationships with your retailers.
I have an entire video on how to do this,
but what this means is reaching out to them from time to time to ask them how
your products are doing. If people are buying,
what kind of feedback are they getting and I know it can be scary to ask these
questions because I have been there myself and it's nerve wracking, right?
What if your products aren't selling and everyone hates it and the buyer wants
to return everything? That's what I thought too,
but you will be surprised to find that buyers are actually going to be very
grateful to have your support and knowing that you're there to help them.
I think of it is like a partnership.
You might need to share with them the different ways you have success selling
your products.
Like maybe people don't know your products on a certain feature about them or
that you use a special ingredient that's not immediately noticeable.
Sharing this kind of information will help the buyer train their sales staff to
know what to say to their customers when they're looking at your products.
And you know, if something really isn't selling well,
but maybe another design has already sold out,
offer the buyer to exchange the item that isn't moving with more of what was
selling well.
Sometimes buyers themselves just don't have time to reach out to you to tell you
all of these things because they're so busy and let's be honest,
it is easier to not say anything than it is to reach out and communicate.
