This week we'll be talking about selling your work via wholesale and consignment. We're going a little backwards, starting with an interview on wholesale today, back to wholesale basics tomorrow and then onto consignment stuff Thursday, but we do things to the beat of our own drum around here, right?
So, to start us off, we have an interview with wholesale pro, Jessica Constable of Jess LC jewelry. She's sold her jewelry in over 150 shops and boutiques over the last 9 years and has been working on her jewelry line in Chicago full time since 2007. Today she's here to offer us a little insider info about successful wholesaling!
I know you've been selling your jewelry since you were just 15! How did you get started selling your jewelry wholesale to shops?
Another thing I did in the beginning was consignment - where the store split the retail price with me 50-50, and I only got paid once the jewelry sold. Any unsold merchandise was later returned to me. Now I have sales reps who sell my line for me and I pay them commission.
If a designer wants to approach a shop about carrying their work, what are the proper steps to take?
1: Do your research and make sure this store is a good fit for your products. Are their prices similar? Would your current customers shop there? No matter how good your sales pitch is, if your products won't sell in the store you approach you are wasting your time as well as the buyer's.
2: Go prepared. Bring samples and printed materials (like line lists, postcards, and business cards) with you. Know your prices - both retail and wholesale! Also make sure to have hang tags or earring cards - whatever the case may be. Unique packaging can go a long way to separate your product from things they already sell as long as it isn't too "homemade" looking.
3: Start with a general conversation. By being friendly and talkative with the sales staff you will get more information and assistance which will help you get a meeting with the owner or buyer.
4: Think about their perspective. Are your wholesale prices too high to allow them to mark up your goods? (Hint: find out what the industry mark up is for your product and make sure your product will sell at that price.) Is your product likely to break or fall apart? These are things that will turn off a buyer and could prevent a first or second order.
5: If they don't take your line, listen to what they have to say. Sure, the store might not be a good fit for you, but keep in mind what the buyer says about the product regarding price, quality, and availability. They have retail experience and will know what will sell in stores. You can then take their advice and tweak your line to be more marketable to the next store you visit.
What % of your business comes from the wholesale accounts you have? Have you been more successful selling to wholesale customers or directly through your own shop?
Can you give us a quick outline of what a typical wholesale contract entails? Have you found the terms to be generally standard from shop to shop in your experience? Any red flags designers should look out for?
1. Store buyer looks at my jewelry samples and writes an order.
2. I go to my studio and complete the order.
3. I call and ask the buyer for permission to charge their credit card and ship the order. (For designers that don't have the ability to charge store credit cards, getting a check is fine- just wait until you get the check before you deliver the product.)
4. I deliver or ship the order to them after their credit card is approved or receive their check.
One thing designers might see here is "Net 30" or "Net 60"- this means that the store has 30 or 60 days to pay you once they receive the product. For larger boutiques this can be a strict policy. If you really want to get the account, feel free to agree to this term. Just be careful, some less stable boutiques might not be on top of their accounting and may stall on your payment. It's up to you to check in and make sure you get paid promptly.
The other offer common route for emerging designers is consignment. As I mentioned earlier, this is where you leave your goods in the store and you get paid as the products sell (usually via check once every month or so). In this situation make sure to track your inventory and make sure all of your goods are accounted for. And if you notice that the store hasn't sold any new pieces for a month or two, it might be a good chance to take your goods back and find a new store to work with. (ed note: we'll discuss more about consignment on Thursday!)
Do you have any suggestions on how to price your work so that you can successfully sell wholesale, retaining some sort of profit margin even when you're selling at 50% less than your retail price?
To summarize: my wholesale price is multiplied by my industry markup and that becomes my retail price. This ensures that the store's price will match (or be close to) my retail price.
wholesale price x industry markup = retail price
Thanks Jess for all your insider knowledge and advice! If you have questions for Jess on what she mentioned here or would like to know more about topics that she didn't address, please leave them in the comments below. Also, be sure to check out her blog, Makeunder My Life, for more business advice.
And stay tuned for more of a breakdown on what you need to get started in wholesale tomorrow, and tips on consignment on Thursday. If you have more questions specific to wholesale/consignment, let me know below and we'll try to tackle them this week, or in future posts.