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Topic Wholesale pricing Go to previous topic Go to next topic Go to higher level

By Michy On 02/03/04  

I thought there was a thread on this but I couldn't find it ... so sorry if this is a repeat!

I'm starting to get inquiries on wholesale orders ... what are people generally using for a discount? Is 20% appropriate? Also, what about a minimum order? Should I require one to justify the discount?

Any advice is much appreciated!



By shop gal On 02/03/04  

Hello-
I, in my business, mainly sell wholesale and my "day job" is as a buyer for a childrens furniture and home decor boutique. So I kinda know a bit about this subject. Therefore I have a question: What do you mean by, discount? Are you asking how vendors (you) should price their products?
It depends on what you want for it, what you need to get for it, what you're time is worth. Boutiques will mark up items anywhere from x2.0 (called: Keystone) to x2.5 (truthfully, thay can mark items up however they want); it depends on location and clientele and shop owners prerogaitve. So if you are asking $13 for an item, understand that the shop is going to try and get anywhere from $26-$32 for it, respectively. A lot of the time, boutiques take into consideration the higher wholesale prices for "cottage industry" merchandise and choose to only keystone the product. Now concerning minimum orders: at the least you should have a minimum opening order, and it should be whatever makes this transaction worth your while, $100, $150, $250? Whether or not you want to have a minimum re-order is again your call; it can be of a lesser amount if you like, $50-$100. Again, it's all about doing what is worth your time and effort. Do you have a line sheet? I'm going to pretend like you don't and that you don't know what one is (so if you do, my apologies, skip this part). When a shop inquires about wholesale info, you should send or leave if you're there in person, a line sheet with all pertinent information and some photo's or drawings of the products. A good start would be, company name and contact info, product descriptions, prices, terms (leadtime, how you accept payment, minimums, shipping/handling fee's, "prices and availability are subject to change blah, blah, blah"), you get the picture.
Now one other thing to take into consideration. If you currently sell your products directly to customers you need to consider this when pricing for wholesale. If you sell an item to the public for $13, it would stand to reason that your wholesale price could be $6.50. Now if that is unthinkable, if you must get $13, you might want to consider raising your prices to the public, say to $26. Then your wholesale price could be $13. You don't want to be under-cutting your wholesale accounts.
Hope I've helped and not confused the situation.
all the best to you.

p.s. line sheets don't have to be fancy. nice computer print outs or color xerox's are great.



By myrrh On 02/04/04  

That was a really helpful post! I'll have to bookmark it!



By Michy On 02/04/04  

Thanks for all the info! I already sell my product resale, and do not think I can double those prices to justify a 2x wholesale markup. I think the products would just be way too expensive at a retail level. But I also would make no money selling them at 50% to a boutique, unless we were talking very high volumes.

That's why I'm wondering what the limits are (I'm thinking in terms of a "discount", price off from retail to the wholesaler). I have checked some other websites, like Crafty Chica and noticed her prices look around 20% off for wholesale.

What do you think of a sliding scale based on volume? So 20% for <$500 orders, etc. up to 50% for $1000+ ? I can justify lower costs for higher volume based on lower material & labor.

My product is wedding favors, so I don't expect that stores will be stocking my product - it would be like invitations, where they show a sample, and then order as needed.

Thanks again for the help.



By garnish On 02/04/04  

Just wanted to back up Shop Gal's comments. She's right on with how store buyers do business. They don't look for a "discount off retail price." They expect to see that you have set a wholesale price when you show the line to them. They'll set whatever retail price they think that they can get in their store (usually with in the range shop girl mentioned). If you sell retail as well and undercut their prices substantially in their area, you won't get reorders. You probably need to look at your pricing again maybe your product can be inched up in price a bit or maybe wholesale isn't right for you at this point or maybe you want to just give it a try to test whether the market will respond to higher retail.

Another thought on minimums, some artists I purchased from for my store, had $ minimums, others had piece minimums. Piece minimums can work for some product as you guarentee a more interesting presentation. In a store a grouping of 4-5 items has more visual punch than 1 expensive item.

Dana
www.garnishinc.com



By miss_erma On 02/07/04  

This is a very good thread! If only I learned of all that shop_gal mentioned earlier than learning it the hard way, hehe. Good tips to keep in mind about selling wholesale, I may have to bookmark this thread.



By jennymeg On 03/20/04  

*bump*



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