The And She Looked Up Podcast
Every other week The And She Looked Up Podcast sits down with inspiring Canadian women who create for a living. We talk about their creative journeys and their best business tips, as well as the creative and business mindset issues all creative entrepreneurs struggle with. This podcast is for Canadian artists, makers and creators who want to find a way to make a living doing what they love. Your host, Melissa Hartfiel, left a 20 year career in corporate retail and has been happily self-employed as a working creative since 2010. She's a graphic designer, illustrator, writer, community co-founder and has owned and operated a multi-six figure a year creative content business. She resides just outside of Vancouver, BC.
The And She Looked Up Podcast
1124 Subscriber Soundbite: Subscriber Q&A - Wholesale Tips
Thanks to Patreon supporter Sonia for this month's question. Sonia would like to get her cards and other products into local stores and was looking for some wholesale tips!
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And She Looked Up Creative Hour Podcast
Each week The And She Looked Up Podcast sits down with inspiring Canadian women who create for a living. We talk about their creative journeys and their best business tips, as well as the creative and business mindset issues all creative entrepreneurs struggle with. This podcast is for Canadian artists, makers and creators who want to find a way to make a living doing what they love.
Your host, Melissa Hartfiel (@finelimedesigns), left a 20 year career in corporate retail and has been happily self-employed as a working creative since 2010. She's a graphic designer, writer and illustrator as well as the co-founder of a multi-six figure a year business in the digital content space. She resides just outside of Vancouver, BC.
Hello everyone and welcome to the premium subscriber episode of the Angie Looked Up podcast for November. As always, thank you all so much for your ongoing support. You all know how much it means to me, but it certainly bears repeating every month because you are all the little engine that keeps this podcast going and I really do appreciate it. This month's episode is not the episode I had planned, which will keep quite nicely till next month. In fact, this month's episode is as a result of a question asked by one of our premium subscribers. It is from one of our Patreon members, sonia, and she sent me a message as a response to last month's episode, where I talked about making big business decisions, and she said that, like me, she was also planning on not doing many markets this year. So she was thinking of other sales avenues. And her question was I'm going to try pitching my cards and products for wholesale to some local shops. I'm curious if you do much wholesale business and if you have tips. So I actually do not do a lot of wholesale business right now because I don't have the time. It is definitely something that I would like to do at some point, but it is just not something that I have had the time to pursue.
Speaker 1:So, having said that, in my past life I spent 20 years working in retail for a national chain. I spent two years of that as a cosmetic buyer and I spent another two years as a front store manager and buyer and I spent another two years as a front store manager and buyer and I worked in retail drug. So a front store manager is somebody who does the purchasing for the entire store except for the actual dispensary, the post office. And because I worked in a larger store, the cosmetic department, I had a cosmetic manager who did the buying for that department. So basically I was in charge of health and beauty, general merchandise, giftware, that kind of thing and what most of us sell in our businesses would be considered part of the giftware category. So I am very familiar with purchasing for this category for retail. So I think I can probably give you some tips here that might be helpful.
Speaker 1:I will just say before we dive in that wholesale is worthy of an entire episode on its own. It is a huge topic. It is a very nuanced topic. There are many different ways to go about it topic. There are many different ways to go about it and it is an episode that I have planned for the new year, but I think that for this episode I will stick pretty closely to Sonia's question about pitching local shops in her area, and I also happen to sell cards and I have purchase cards, so I think I can probably speak pretty directly to you, sonia, in this episode.
Speaker 1:Thank you for the question, by the way, it's a great question, and I think the first thing I will mention, before we get into any discussion about wholesale, is that you need to have your pricing nailed down. This is the biggest mistake that so many artists and makers make, because a lot of us do not price for wholesale. We don't think we'll ever sell wholesale. We're going to sell on Etsy, direct to the customer, or we're going to sell on our website or at in-person markets direct to the customer, and so we don't price our products to allow us wiggle room for wholesale. And if you want to sell wholesale, you need to have a lot of room, because wholesale involves a middle person and there's always somebody who needs to take their piece of what it is that you have made. And this is especially true if you want to sell on platforms like FAIR, which can be a great option if you want to get into wholesale in an easy way is an online platform like FAIR. But of course, fair has fees and commissions and you need to factor that in. And if at any point you want to hire a sales rep to sell your product into local shops, you are going to have to factor in their salary. So all these things require that your pricing is really bang on, because the biggest thing is in the giftware category. Retailers expect to double the price of what they paid for the item. So the standard pricing method for wholesale is called the two by two by two method. And let's say that it costs you $2 to make one of your greeting cards, which is not an unreasonable guess. I know how much it costs me to make a greeting card, so $2 is not an unreasonable amount. When you are figuring out how much it costs you to make something greeting card so $2 is not an unreasonable amount. When you are figuring out how much it costs you to make something.
Speaker 1:There are a few hidden factors that you need to account for. Obviously, you're going to account for your time and you're going to account for your raw materials. Those are the two that everybody seems to be aware of. But you also need to account for your packaging, not your shipping, not your shipping materials or your shipping packaging. I'm talking about the packaging that the product will be in in the store. And with cards, you have some decisions to make about whether you are going to package them individually for sale or whether you're going to package them without any packaging, being aware that this may make your product shopworn much more quickly because it's a paper product. So you need to factor that into your pricing. You also need to factor in your overhead and you need to factor in waste. So waste is like when you go to cut a card and you cut the wrong size, or you scored in the wrong place, or you do a bad fold or you have a bad print job or any of those things.
Speaker 1:Um, that needs to be factored into your cost. And there's standard percentages for those two items. Um, and they're quite small. I can't remember. Off the top of my head, I think one is 2% and one is 5%, and they're quite small. I can't remember. Off the top of my head, I think one is 2% and one is 5%. I could be wrong, but anyway. So you need to factor those in and that gives you your true cost of your product. So let's say that it costs you $2 to make a card.
Speaker 1:The next step in the formula is to multiply that by two. So two by two. So basically you're doubling it. Two times two is four, so four becomes your wholesale price. That's the price that your retail shops are going to pay you to purchase the card. They are going to turn around and double that price again by two, and now that card becomes $8, and that is the retail price of the card, so for your retailer.
Speaker 1:So another thing that is really important to know is that retailers do not like it when you sell your product at a cheaper price on your website or your Etsy shop or your in-person markets than they have to sell it at in their store. They really do not like that. So you need to be prepared. If you're not already selling your card at what that retail price would be for your retailer, you need to be prepared to raise your prices. So the good thing about that is it gives you a lot more profit when you do not have the middle person in there. The good thing about that is it gives you a lot more profit when you do not have the middle person in there. You're not selling at wholesale. You are making a nice juicy profit on that card. You're making $6 on it instead of I don't know. Let's say you were selling it for $6, and you were only making four. Now you're selling it for eight. You're making $6 on that $2 card. That's a nice profit margin. So this is why pricing is so important. A lot of us don't factor in that wholesale level and for some of you you never will sell wholesale, and that's totally fine.
Speaker 1:But if you are going to sell wholesale, you are going to really need to take a look at your pricing and make sure that it's good, because you do not want to be losing money selling wholesale. That just negates the whole purpose of doing wholesale. So, yes, you need to have your pricing nailed down two by two by two. That is the number one thing. If your retailers are not going to be able to double the price, they're probably not going to be interested in you in this particular category. And if you are selling below that suggested retail price, they are not going to be happy either. They don't want to be competing with you. What is the point of them having to sell it for $8 if their customers realize they can buy it from you for $6? Having to sell it for $8 if their customers realize they can buy it from you for $6. And it's not good for you either to be selling your products lower than your retailers, because then they're not going to reorder from you. It's just not going to work. So that is my biggest thing, before you even start thinking about selling wholesale, is make sure you have your pricing nailed down. And I could talk a lot more about this, but I'm going to keep it brief and maybe I'll save that for the bigger episode. Yeah, standard pricing, two by two by two. Yeah, that's all I'm going to say about that for now.
Speaker 1:As I mentioned, fair is a great place to get started If you, particularly if you, don't love the idea of going out and talking to retailers and, sonia, I know you mentioned that you wanted to go talk to local shops so fair is definitely something that you could look at. But I'm mentioning it more for those people who may not be quite so excited about going out and talking to people. So that brings me to my next tip. My next tip is that you need to make sure that you do your research before you reach out. Heather and I talk a lot on the podcast about research and relationships and if ever there was a scenario where you need to spend a lot of time on both of them, it is selling wholesale. So the first thing you're going to want to do is and you probably already have some ideas in your head you're going to want to investigate local retailers who might be a good fit for what it is that you sell. Don't be afraid to think outside the box.
Speaker 1:I know, with cards, a lot of us think that we need to approach gift shops Absolutely, but think of other places where you might want to buy a card. Pharmacies sell cards. That might be a great option for you. A bakery people often. Or a flower shop when people buy flowers, they often get a card to go with them. When they're buying a gift from a bake shop, they get a card to go with it. Anywhere where they might want to send along a greeting with whatever it is that they're purchasing from Bookstores would be another one that might be a great place. So anywhere that somebody might buy a gift could be a great location to check out.
Speaker 1:Yes, so you want to do your research to find out who would be a good fit, then what I would do myself is I would go around and I would actually physically visit all of these shops and just take a look and see what the whole vibe of the place is. Take a look at the merchandise, take a look to see if it's shopworn. Is there stuff there that looks like it's been sitting there for a long time? What are the staff like? How do they treat you, react to you when you come in as a customer? All those types of things. I would just, yeah, go in purely on a research visit, not necessarily planning to stop and chat with anyone, but just to get a sense of the vibe and the store overall and how well looked after the store is, and is this a place that you would be super excited about having your product in? Then what I would do, when you've got your short list, is I would uh, look at them all on a map and I would figure out how far apart each location is, because another thing that retailers really like to have is exclusivity.
Speaker 1:So, um, some of them will ask for it, some of them won't, but most of them will be very curious to know where else you are selling your items or your products and if you don't have your products in anywhere yet. This can be a little bit tricky to navigate, but you want to have a good idea in your head of how concentrated you want your products to be in your local area and realize that one retailer is probably not going to want to carry your items if a shop four or five stores down is also carrying your items. So some people will ask for exclusivity by postal code, some people will ask by a kilometer radius, and it's completely up to you. You may choose not to grant exclusivity radius, and it's completely up to you. You may choose not to grant exclusivity but be aware that it may limit your options. You may decide that, yes, nobody within five kilometers of another shop, or 10 kilometers. It's up to you to make that decision. But be aware that it is a question you will most likely be asked. So that is definitely something that you want to consider.
Speaker 1:Then, when you've kind of got your map done and you have a pretty good idea of who you want to approach, I would actually go out and I would visit them all again. This time I would go prepared, I would go, I would make sure I have my business cards with me, I would make sure that I have my sample of my cards or whatever product it is that you sell with me, and I would also make sure I have what's called a sell sheet. And a sell sheet is basically a one page piece of paper that you can hand the shop owner or the buyer that tells them about the product. So it might have a picture or two of the product, not a ton of pictures. You want one really good, clear picture. Well, that shows them what the product looks like. Maybe, if you've got a really cute back to your cards, you might want to have a picture showing the back as well.
Speaker 1:And then you want to give them the details of the card. So it might be you might want to list all the things like the dimensions, the price, obviously the price that they are going to pay for them and the price that they are going to be able to retail them at. You want to let them know what the minimum order quantity is. That's another thing you're going to have to consider. What is going to be the minimum number of pieces that you will sell into a shop? Okay, because you want to think about the presentation overall. Like you know, if you just sell in five different cards, that's not a huge statement, but for some very small shops that might be enough. What's the minimum of each, each card that you're going to sell in?
Speaker 1:So let's say you have a card with a tree on it, you have a card that says thank you. Is it going to be six, is it going to be three, is it going to be a dozen? And that's something you need to think about and keep in mind. So you want to have that on the sell sheet. You also want to have I think I mentioned the dimensions you might want to mention where it's made. So if you are making them, mention that. If they are printed in Canada, mention that. If you're not the person making them, if they're printed overseas, I believe you do have to mention that as well. You want to mention whether they're blank inside or whether there is something on the inside and if so, what is it? Because they may not be able to see that from the picture and in some cases you may need a UPC code or some kind of stock keeping code, a SKU. They're also called SKU, and smaller gift shops local gift shops probably won't require a barcode, but they will want some kind of stop keeping unit that they can reference. Large chains will expect barcodes at this point. So that's a whole other conversation and probably not relevant to what you're doing.
Speaker 1:So you want to make sure you have all that information listed on the sell sheet so that you can leave that with the owner. So when you go into these shops, do not expect to be making your pitch this go round. All you're going in is to. All you're doing is to go in and see if the owner is or the buyer is available, introduce yourself, ask them if you can leave a card, your business card, a sell sheet, and if you're feeling like it, you could even leave a sample of your card so that they can see it, so they can feel the paper. I always found it very useful, particularly for giftware, to see a sample so that I could get a sense of whether the quality was there, all that type of thing. And if you are able to meet with them directly, you can show them that and you don't need to leave a sample. But they may not be in, so you might want to leave just one card. So that might be something you want to budget for.
Speaker 1:So go in, ask if they're available. If they're not, ask the employee if it would be possible for you to leave some information for them. Handwrite a little personal note on a post-it note, just letting them know that you dropped by and who you are, and that you will follow up with them in the next few days and leave it with that employee If they are available, if the owner or buyer is available. Do not make your pitch. This is so important. Do not make your pitch. Instead, ask them, introduce yourself first of all, tell them who you are and let them know that you are a local artist or a local maker and you sell. You have a line of greeting cards and you'd love to talk to them about it, and would it be possible to book an appointment at a time that's convenient for them? I can guarantee you, in November and December. They don't have the bandwidth to process a lot in the moment. So this is something they're definitely going to appreciate.
Speaker 1:If you just launch into your spiel right then and there you're going to turn a lot of them off, they're just gonna be like I don't have time for you right now. I'm sorry, this is not the best, you know. Always be extremely respectful of their time. These are business owners. They're running a business. That's their job. Their customers come first, particularly this time of year, and so, yeah, be respectful of their time. Some of them may say I have time right now. Show me what you've got. In that case, that's why you want to come in prepared and have your product with you.
Speaker 1:But if they can't, then ask them if you can book an appointment now and if not, ask them if you can follow up via email or on another visit, anything like that, so that they don't feel pressured to talk to you. And because that's what you don't want to put them in a position where they're on the defensive. But you also don't want to make it super easy for them to tell you no, um, and even if they do say no, it doesn't mean no forever, it just means no in that moment. So, yes, that is probably my number one tip behind pricing Be respectful of the store owner's time and their business. Number one piece of advice yeah, absolutely, because a lot of them aren't. So you never want to make it sound like your business is more important than their business or that your time is more important than their time. Okay, you're both business owners, you're both CEOs of what you do, and so treat them as an equal. If you want them to treat you as an equal, so it's 50-50. So, anyway, if you're able to see them right in that moment, then have the conversation. Show them what you've got, show them, talk to them about numbers, explain to them why your product is a good fit, why you think this is the right shop for them to be in, for your products to be in. You are pitching them, okay, not the other way around. So you need to make your case for why you think your items should be on their store shelves. So that's really important. I think I was going to say.
Speaker 1:Another thing to be cognizant of with greeting cards is displays. You want to make sure they have a way to display your cards nicely, which requires spinners and things. So that's something to keep an eye out for in the store is to make sure that they have something, and some of them may expect you to provide a spinner. So that's something to keep in mind as well. I wouldn't recommend doing that until you have a high enough volume that you can afford to include a spinner or provide a spinner, so something to just be aware of. That that's something that might come at you.
Speaker 1:As I mentioned, no doesn't mean no forever. It just means not right now. There are a million reasons why they may not be able to bring your item into the store at this time. They may not feel you're a good fit, they may not have the budget, cards could be a slow seller for them, and so they're just not interested. There could be a million reasons. Don't let that deter you. You can still drop in once a quarter and just say hi, just coming in to see how you're doing, how the shop's doing. Is there anything I can you might like to talk about? Or has the situation changed? Or I have some new designs. Would you like to take a look?
Speaker 1:You know, don't nurture the relationship until it gets to a point where you just don't think it's ever going to happen, and that could take a long time. So keep, keep, don't. Don't hear no and then never talk to them again. It's just it's that's a silly way to go about it, especially in a smaller community. So, yeah, just keep keep asking. Don't be pushy. You don't need to be pushy. Don't waste their time, don't encroach on their business, all of those things. But keep keep the lines of communication open and don't be afraid to go in and see them multiple times a year. Just check in on them and if your products do get into the store, still drop in and visit and let them know that you're around and if they need anything, if they need to reorder, if they'd like to see your new designs like, there's a lot of follow-up that you can do with wholesale as well. So I'm trying to think.
Speaker 1:I didn't write a list of all the things that I was thinking needed to be mentioned, but yeah, you want to keep nurturing those relationships and you want to make sure that you've got all your. You want to make sure you've got your pricing nailed down. You want to make sure that you are doing your research, figuring out good locations. You want to make sure that you have your sell sheets ready with all the pertinent information they will need. The other thing I will mention, because it is November, is that at this point they will not be purchasing for Christmas. Retail has very long lead times. I know myself when I was purchasing at retail level, about 95 to 98% of my Christmas purchasing was done by June 1st and the other two to 5% would be done by September 1st. So retail has very long lead times. So if you're coming to visit me in November, I am expecting to be talking to you about Valentine's day and even potentially mother's day in the greeting card arena, because I know that's what you sell. So that is something else to keep in mind If you're going in to see them.
Speaker 1:The other thing that you could pitch at this time of the year is just your overall everyday line of cards that would be appropriate at any time. So these are like your birthday cards, your thank you cards, your bereavement cards, those types of cards that people look for year round. But yeah, specifically Christmas, it's a little bit late to be trying to sell those in, unless you can offer them a screaming deal so that they can make a lot of money, even if they have to sell them at Markdown after Christmas. But most of us probably aren't in a position to do that. So, yeah, going in and even broaching the idea of Christmas to them right now, we'll send a message to them that you are very much a beginner and a newbie. So I would avoid that at this late juncture in the year. Yeah, I'm trying to think if there's anything else that could help you right in this moment.
Speaker 1:Another thing that you might want to consider and this is a broader suggestion for everyone who's thinking of wholesale is to join your local business association or chamber of commerce. This is a great way to network without selling, because a lot of getting your product into stores is about who you know, and that's another thing to look at. When you've narrowed down your list of people, you want to suss out the owner's name which you've done in your reconnaissance missions and start going through your network to see if there's anybody you know who might be connected to them, who can put a good word in for you. You know who might be connected to them who can put a good word in for you. Maybe their kid is on the same soccer team as your brother's kid, or maybe they're in your sister-in-law's book club, or you never know how you might be connected to them, and the smaller the community you're in, the more likely you are to have those personal connections. So those are something like this is where the research comes in. Like, how can I find a path to this person that is going to increase their level of trust with me before I've even spoken to them, um, because if somebody can put in a good word for you or vouch for you, that is going to make your job so much easier. And, yeah, so I would do that as part of your research.
Speaker 1:But when you join your local business association or your chamber of commerce or your um business improvement group or any of those groups and most small communities have something, um, and bigger communities might have multiple associations so join those. Go to the social events, get to know other business owners. When we're makers and artists and we work from home and we sell online, it can be very hard for people to get to know us or even be aware that we're based in their community. I can't tell you how many times this has happened, where I've found that I'm following somebody online and they actually live where I live and there's an opportunity to form a relationship there. So, yeah, get out to those kinds of events and see how you can connect with small business owners in your area. So I think that's probably it.
Speaker 1:I probably threw a lot of information at all of you and, like I said, this is a huge topic and I only went in a teeny, tiny bit, but there's so many nuances to this that we can talk about in another episode, as I mentioned. But, yeah, focus on relationships and research and your pricing and making sure that you have worked out all the details of how you want to sell your product in. So things like what your minimum order quantities are going to be, what your return policies are going to be, what your policies are going to be for damaged or shop-worn stock. Some places will expect you to take it back. So make sure that all of those things are included in some kind of communication and that you set yourself up for success so you're not having awkward conversations at some point. So all of those things are important. And yeah, and number one, get your pricing nailed down first. That is the key, because you don't want to be losing money. Doing this Wholesale can be a lot of work, so you don't want to be working to lose money and I think that's it.
Speaker 1:So if any of you have a question, like Sonia did, please drop it for me in Patreon. If you're a Patreon subscriber, if you're a Buzzsprout subscriber, you can email me directly at anneshelookedupatgmailcom and I am more than happy to answer your questions in the form of a subscribers only podcast. It makes my life actually a lot easier because I don't have to come up with a new topic every month, which is often my stumbling block, although this month I actually did have a topic, and we will do that one in December. It might even be more relevant in December, actually, more than I think about it. So that is it for this week, sonia. I hope this was helpful and to all of you listening through our premium subscriber network. Thank you all again. So much for your ongoing support, and I hope that you are having a fantastic selling season leading up to the holidays. That's it for this month, and I will be back next month with another premium subscriber only episode. I'll talk to you all then.
