Okay semi-embarrassing story… about a year ago I had a retailer interested in carrying my greeting cards and stickers in their bookstore. They sent me an email asking for my wholesale pricing, and I didn’t understand or know ANYTHING about wholesale at the time, so I replied with my retail prices. Then, I never heard from them again. Ah! This still stings. Don’t let this be you!! But don't worry it won't be, because I'm here to give you everything you need to know about wholesale to get started!
Wholesale is when a retail business buys products from another business to resell them under their retail store. Most art and gift shops, bookstores, and boutiques utilize wholesale to fill their shelves with products. They get your products at a discounted rate and then resell them in their shop for profit.
Benefits of Selling Wholesale
- This method can benefit you (the artist/business selling products to a retailer via wholesale) because you are guaranteed money upfront. Although you want the retailer to have an easy and successful time selling your products so they come back for more, your payout is not contingent on their retail sales. You receive payment the minute the wholesale order is placed regardless of whether or not the retailer sells your products successfully.
- It gets your products in front of more people. When you sell your work wholesale to a retailer, that retailer’s entire customer base will now see your work and learn about your business. People who you may have otherwise never reached now have an opportunity to shop your brand, increasing your exposure.
- You have zero responsibility for selling your work beyond securing the wholesale deal. The retailer is now fully in charge of selling the work they purchased, and you get to sit back and reap the benefits.
Typically speaking your wholesale price is usually 50% of your MSRP (Manufacturers Suggested Retail Price). So, if you sell greeting cards for $6 in your retail shop, you would then sell them for $3 at wholesale. This can vary usually between 40%-60% of the MSRP, depending on your exact item’s costs, profit margin, and market prices. You should use your item cost to help set your retail sales prices, and then use your retail sales price to inform your wholesale pricing. Let me break this down for you super transparently to make sure it’s clear.
You should know the item cost breakdown of every product you sell. I find it easiest to determine this number without factoring in time. First, calculate only your material costs.
Greeting Cards = 69 cents/card
Kraft Envelopes: $13.94 for 100 envelopes = 14 cents/envelope
Cellophane Sleeves: $6.99 for 100 sleeves = 7 cents/sleeve
Paper: $44.94 for 100 sheets = 22.5 cents/sheet
Ink: (no easy way to calculate this) I estimate about 25 cents/card
According to my math, each greeting card costs me 69 cents to produce. This is strictly material costs. Time spent loading the printer, cutting, scoring, packaging, and designing the cards is not being weighed into that number. Still 69 cents is a really good number I’m happy about. You want your cost to be as low as possible while still maintaining high quality and ethical materials. Bonus points if you manage to source eco-friendly materials as well.
Next you want to factor in the typical market prices for the item you’re selling. Continuing with my example, greeting cards are sold on average anywhere between $4- $10 depending on the brand and complexity of the design. I price my greeting cards at $6.00 each for retail because it’s somewhere in the middle, my designs are unique and original, and each one is made my own two hands. I also like how that price offers me some flexibility to discount cards bought in bulk at my in person art events. Ex: $6.00 each or 3 for $15.00. I then chose to sell my greeting cards at $3/each for retail, which is 50% of my MSRP. That means on an individual card I am profiting $2.31/card while the retailer has the opportunity of profiting $3/card given they market my cards at the suggested retail price of $6. I feel like I am essentially trading their customer reach/marketing of my work, for the .70 cents extra they are making per card plus my time spend prepping and packaging their order. In my mind, this is a fair trade. You might choose to charge a little more or a little less depending on what feels right to you after assessing the numbers. But as a general rule of reference, this is how to go about coming up with your wholesale pricing and my best starter guide for you.
How to Find Retailers
I hope I didn’t put you to sleep with all that math. This is the fun part! I have found a few of my retailers from social media and building an Instagram connection that turned into a partnership. I have met others in person at local art markets. Either they were also vending and expressed interest in carrying my products at their brick and mortar, or were a customer passing through who happened to own a retail shop. Those connections took a little bit of luck, chance, and right timing. But lastly, there’s a third way that I would highly recommend. You can use an existing online platform to connect with retailers. The platform I use is called Faire. I’m relatively new to the site, but have already received a handful of orders. It’s basically an online shopping platform specifically for retailers to find business to purchase their work wholesale, taking out 90% of the work of you having to run around trying to find retailers to buy from you. You build a shop, fill it with your products, and the retailers come to you. When you feel ready to journey into the realm of wholesale, you can use my direct referral link to apply for your own storefront on Faire and increase your chances of being approved.
I hope you found this blog helpful! Feel totally welcome to comment any lingering questions you have or topics you’d like to see me touch on next. You got this!!!