Wednesday, February 20, 2008

Selling Wholesale - Part I

The question often comes up from new craft artists. What do I do if I am asked to sell wholesale? This is the ultimate in craft sales. This is what every craft artist should want! At wholesale you will sell in quantity and you will have the potential for continued wholesale orders - if your item becomes popular at the retailer's shop.

I have had success at selling wholesale to shops and to catalogs. It is a wonderful feeling to know that your work is being sold in stores. To sell wholesale there are a few things that the craft artist must know.

In anticipation of any wholesale sales the craft artist needs to determine the wholesale pricing of their work. When a retailer sells an item the retailer generally doubles the price paid at wholesale for that item and that becomes the retail price. Some retailers triple their items. Amusement parks are known for tripling wholesale prices on souvenirs and other things that are sold in the park. When a retailer is looking to purchase items at wholesale the retailer is looking to see that your prices are able to be doubled (in the industry this is called "Keystoning") and that the wholesale price that you are offering is below the price that the item is currently selling for to the general public. Pricing is a difficult issue for many artists and craftspeople. They tend to devalue their work and place lower than market prices on their work. There is a whole psychology of this that we will not go into here, but it is important to understand the basics of pricing.

To price an item you need to take the costs of all materials, supplies, and expenses that make up an item and then add that to an hourly rate that you as the artist must determine that your labor and talent are worth. Start with the minimum wage and work up from there. You should certainly be paid the minimum wage. Of course, you should be paid more than the minimum wage. It is up to you to decide what you are worth per hour. Multiply the number or fraction of hours that it took to create your item. Add that item to your costs. Your wholesale price should be the result.

You are not finished yet. To sell that item on your own you may have other expenses. If you are on an internet site that charges fees you now need to add those fees. If you sell at a craft show the table space will cost you money. You need to proportion that into your prices. If you take credit cards or use Paypal you must pay fees. Those fees need to be added into the price. Ideally when you are done you are at or near doubling that wholesale price that you came up with a few moments ago. (See why retailers double your wholesale price - they have these expenses too, only greater if they have a brick and mortar store.) Many craftspeople will feel that their item will not sell at double that initial price and feel uncomfortable about offering the doubled price when they try to sell the item on the internet or at a craft show. Eager to make sales they often offer their wholesale price to the public. This is a problem when it comes to selling wholesale. As I said earlier, retail shops do not want to compete with you and want to see that the price that they are paying wholesale is significantly less than your usual prices.


TO BE CONTINUED!

13 comments:

DreamWoven said...

good article! i have one on my blog as well... takes a bit of a different slant tho.

http://DreamWoven.blogspot.com

Robert A said...

Part II will address more in detail.

Raven said...

Ahh, the wholesale dilemma.
I've had many people ask me about selling wholesale, but I've not gone forward due to some of the reasons mentioned.
I can't wait to read Part II.

xxx
Raven

SoapnLotionLady said...

Great article. You are exactly right about pricing. Perhaps once you have educated about your readers about wholesale, you might refer them to http://www.boutiqueboxes.com. By providing product samples and marketing materials to go into sample boxes that are sent to business owners, they have the potential of picking up wholesale business easily and affordably.

Alison Chappell

novelartsanddesigns said...

Great article. Makes me think about my regular pricing.

alexlady said...

this is a really good article, thanks!

www.alexladydesigns.etsy.com
www.alexladydesigns.blogspot.com

penguinsplunder said...

This is such great info, thank you!

Desert Soapstone said...

You are providing very good info. I'll get back to you after reading part 2.

Yoni said...

Good article, those looking to sell wholesale should check erayo.com you need to submit an application to join but if accepted you have a very good channel to develop your business

Linda Friedrich said...

Thanks so much - great post,which helped me a lot!

Clare Johnston said...

Really helpful info, thanks! It helped me really examine my pricing structure.

www.awakenjewelry.com

Krug's Eco-Logic said...

Great tips - thank you!

Jamal said...

Thanks for the advice.

Mosabox.etsy.com