You might have been retailing your products for a while and everyone around you are telling you that your products need to be in John Lewis or in other big shops but you’re not sure if you and your products are ready or if it’s the right direction for your business. Or perhaps you have been dreaming about having your products in Liberty’s since you first started your business but you’re unsure if now is the right time.
There’re obviously quite a few things to consider if you would like to start to wholesale, but here’s a few key things to help you figure out if you’re ready or if you have a little bit more work to do before you start. I’ve tried to explain any jargon within this post but if you’re unsure about anything have a look at this post.
Are your products shelf ready?
Before you approach any retailers it’s important that you’re confident that your products are shelf ready. Imagine your range on the shelf's of your ideal stockist:
Where are they displayed?
How are they displayed? Do they hang or stack, sit on a product shelf or in a display cabinet?
Are they displayed in or out of the product packaging?
What other products are they displayed with?
Do your products stand out?
How does your prices compare?
Do you have enough products that can form part of one range that will look great being displayed together in a store?
Do you have your brand name on all the product packaging and the products themselves?
If you know the answers to all these questions then you’re off to a great start but if you’re unsure about any of them don’t feel defeated, plan how you can make your products ready before you start to prepare your sales material and start approaching retailers.
Can you scale your production?
When you start to wholesale you will be selling larger quantities of your products, have you considered how you can scale your production? Would you need to get someone to help you? How much time would this take? Stockist understand that small brands are often one man/woman team but an empty shop is never a good look so they need to feel confident that you will be a reliable supplier with reasonable lead-times so they can place re-orders.
Before you start it’s difficult to know how much stock you will need. You will need to make a few assumptions and work out how you would get that amount of stock produced. Having a plan is important to keep your stockists happy and supportive of your brand.
Can you make enough margin selling your products to retailers?
Review your prices, the standard mark-up for home and gifts products are 60% or x 2.5. Some start out a little lower than this but any lower than 50% will make it a challenge to start to wholesale.
This means that if your recommended selling price is £20, your wholesale price for this item might be £8.00. This £8 needs to cover:
All your direct costs - materials to make the product.
Indirect cost - all your costs that allow you to do what you do, website hosting, studio space etc.
Labour cost - if you make your product you need to decide how much you need to be paying yourself.
Profit - this is what will allow you to re-invest in your business and what will drive your business forward. It will allow you to spend on marketing, developing more products or exhibit at trade shows so please do not skip this.
Sales material and product photography
Before you start contacting retailers you will need to have your sales pack ready. This means either a catalogue or a line sheet. This will be your sales tool and at the most basic line sheet should include product images, wholesale price, recommended retail price, any pack sizes, your company details, how to order and all your terms (for example. Minimum order £150 ex vat with £10 carriage or £300 ex vat carriage paid, first order proforma and thereafter we offer 30 days credit).
You will need good product photography, even the smallest independent stores have online stores nowadays and most of them do post on social media. Consider having your photography done professionally and keep a dropbox or google drive that you can share with your stockists. Include some lifestyle photos and chances are they will use them for banners on their websites and for their social media.
Can you cover all the upfront costs?
When you start out, your new stockists will often be happy to pay for their first order on proforma, this means they will pay you before you ship their order. Some suppliers ask for the first 3 orders to be paid proforma and some offer credit right away. After the first few orders all stockists will generally expect 30 days credit. Larger retailers expect credit from day one, usually 30 days or more.
I wish I could say that they all will pay you on time without any chasing, but this is not always the case. Most retailers will pay you around the right time but there will always be a few that will keep putting off payment. You will need to cover all the upfront costs of having your products made until you get paid, so you need to know what you can afford before you start targeting any retailers.
My advice, unless you have a very healthy cash flow is to start slow and small. Target independent shops first, focus on making sure they are happy and that they re-order. Once you established this you can take a bit more risk and go after more stockists and larger retailers if that’s your goal.
If you're interested in working with me, book a free 30 min call to discover how I can help you. If you have any feedback or any topic you would like me to cover please get in touch. I also share tips every week on my Instagram account.
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