What is Wholesale?
Are you struggling to figure out how to grow your business as a maker? Or is your business growing too fast for you to keep up with? There may be a solution for you that actually frees up time and ensures that you can batch orders in larger quantities with guaranteed sales. The possible solution is wholesaling.
What is wholesaling? Wholesaling is when you sell your product in bulk to other retailers at a discounted price. It’s beneficial because you can have a large one-time order that gives you a target revenue. People or businesses can make these bulk orders at usually 50% off your retail price and resell the product.
Wholesaling is NOT for everyone. It works best for businesses that:
- Have a successful business with an established and growing customer base
- Know what their best selling products are
- Have a standard operating procedure for manufacturing, packaging, and shipping
If you check all these boxes- wholesaling could be a great next step to expanding your business. As long as you are willing to let other brands sell your product.
Why should you wholesale?
- Having wholesale orders give you more freedom in your schedule- you know exactly what to make and how much in quantity
- Prepping for shows is time consuming and results are NEVER guaranteed
- You learn how to be more efficient in growing your business
- Having larger orders requires you to master your operating procedures and refine production practices
- Wholesaling will boost your business cash flow and allow for expansion
- Allows for hiring or outsourcing certain services like marketing, shipping, etc.
- You can eliminate the need for having excess inventory
- Wholesaling means you have an exact quantity or products that are guaranteed to sell
- If you’re looking to move on from loading up your inventory and heading to shows every weekend…wholesaling is for you.
Why you should NOT wholesale?
Wholesaling is NOT for you if you do not have the time or resources to produce products in bulk. If you’re still just starting out and expansion is NOT your goal- it may be better to hold off.
A great alternative to wholesaling that does not require as much preparation- is consignment.
Consignment means renting out a shelf or two at a retail location for a monthly fee or percentage of the sales see this article for more information.
How to wholesale
If you’re ready to get started with wholesaling- there are a couple concrete steps you need to take:
- Set your wholesaling price
- Your wholesale price should be twice your break-even price- supplies+labor+overhead= break even price
- Start making notes on how long things take and how much time you need for delays so you can be realistic when taking orders and setting delivery timeframes. For example, if you know you can make your product in 15 minutes when you’re in the zone, but in 30 minutes when you’re tired, budget 30 minutes for all your orders.
- Research wholesaling companies or consider online marketplaces. Here are a few: