Store-Selling Vocabulary
If you’ve made the decision to start selling your handmade things, you have a few venues for doing that. You might try doing trunk shows, craft fairs, and holiday bazaars to get started. You might build a web site or consider selling things through an on-line marketplace like Etsy. If you are ready to increase your production and deal with the demands of the retail market, selling your work to boutiques may appeal. When people ask me questions about how I got started selling things, I find that they are most interested in unraveling the mysteries of how to sell their work to stores. In my next few posts I’ll be reviewing some parts and pieces of the wholesale/retail relationship to help you decide if it is one worth entering.
There are good reasons, even in the global/web-site-lush world of commerce, to sell your products to shops. The most obvious of these is the increased sales you’ll experience and the exposure your work will gain as customers (and media-related types — yes, they shop, too!) have a chance to see your things in person, every day, all over the city/state/country/world. When you first start thinking about what it means to sell your . . . knitted baby bibs . . . to stores, it’s helpful to familiarize yourself with the basic wholesale/retail structure that most product buyers will expect you to understand. To that end, a little vocabulary:
Product: What you’ve made, and what you will sell
Product line: The entire range of things offered by a designer or manufacturer
Manufacturer: Not a romantic term, but let’s face it: If you’re going to sell things to stores, this is what you’ll be called. There is very little about this relationship that is romantic, anyway, I promise.
Buyer: The person at a shop who makes the decision about what to purchase for its shelves
Wholesale price: This is the price that you will sell your handknitted baby bibs to shops for. Generally, it’s 50% of the retail price.
Retail price: This is the price that the customer who ultimately buys your bib from a shop will pay, sometimes also called the “price point.” It is generally double the wholesale price that the buyer has paid, and can be marked up to include shipping costs, neighborhood cache (i.e. high rent), etc.
Consignment: The practice of “giving” your bibs to a buyer without getting any money for them up front. The shop will sell them for you, and pay you a percentage of the retail price regularly when/if they sell.
Wholesale price: This is the price that you will sell your handknitted baby bibs to shops for. Generally, it’s 50% of the retail price.
I had to repeat that last one because if I had a nickel for every time someone has said “Wha-wha-wha-what??? FIFTY PERCENT???” to me when I define “wholesale price” for them, I tell you I wouldn’t have to sell another handmade handbag as long as I live. I’d be lying on the beach at Lake Como reading mysteries all day. That’s how many people.
So, more later, when you’ve had a bit of time to recover. Fifty percent is not . . . small. But, there’s hope. We’ll talk.
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April 5th, 2006 at 5:59 am
I am so glad that you are posting business related articles here. This one is another great one. Thanks for sharing your business knowledge!
April 5th, 2006 at 10:17 am
and don’t forget or underestimate Party Plan! I have had three people offer to host a party for me and I have less than a dozen pieces of stock! Of course it depends of your item (mine is jewellry and bags) so they suit this method. Now all I have to do is get enough stock together to do it… :-)
April 5th, 2006 at 10:46 am
Wonderful insight Alicia, and I love the picture too!
April 5th, 2006 at 3:12 pm
Thanks for the information! :)
April 6th, 2006 at 5:00 am
Though I’m not selling anything at the moment I’m really enjoying reading these posts :)
April 6th, 2006 at 8:31 am
Thanks for sharing the experience. I guess a lot of people are just out there looking for a way to start selling, or even a little encouragement. I myself have a lot of stuff stashed that I would like to sell. I am thinking of taking a few samples or photo prints to some stores and display them. I can’t wait to see your follow ups on this article.
April 12th, 2006 at 9:17 am
I once had stuff in a gallery shop that took nearly 70%, I nearly gagged!
Another great article Alicia.
April 14th, 2006 at 7:59 pm
I have just opened my shop in Wellington New Zealand called Juniper. I myself am a handcraft artist and have found over the years no shop that just sells handmade. So here it is…http://junipergallery.blogspot.com/ I enjoy everyday meeting new designers. I only take 35% comission on a sale (except my own stuff of course) I do all the merchandising of the products as they come in and make sure the bio is up to date on each designer. I work hard for the small comission and that’s how I like it. I like the artisit to know that I work for them.
April 16th, 2006 at 1:27 am
Thank you for posting this. I have a retail shop and I also design alot of items that I sell in my shop . When I first opened my shop in 2004 I took alot of local arts and craft items in on Consignment and I was only keeping 20% of the retail for the shop and after a couple of months I had to make a change and I lost a few good artist because they did not understand that I could stay in business if I dod not up my consignment rate. I had since up the rate to 45% and I am happy with the people that I have designing for the shop.
And I will say that if you want to sell to a shop you best keep your prices the same everywhere or the shops will drop you and I have had this happen to me when I did consignment prior to opening my own shop.
April 23rd, 2006 at 12:41 am
This is really interesting. If you are supplying lots of places as well as selling yourself, its as well to have a *retail price* which is 50-60% above what you want / need to make on the item - your cost price. Then have your wholesale price which you sell to shops. Its important not to undercut shops by selling direct, particularly the same products or in the same city. If you want to keep your prices down to personal customers then offer a discount, right down to your wholesale price, should you wish and tell them its trade price, and they will love it! At some fairs etc where you are paying for a stand and need to make more profit and are confident of the retail price, then sell things nominally at the retail price, but again, offer discounts and special offers as a special ’show price’ and drop things for favourite customers and anyone else you like the look of, likewise for parties etc.