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The Ultimate Guide To Getting Ready For Retailers

This is your great big wholesale starter kit.

Written by Clare

First, a love letter.

Hello. I’m Clare, the founder of Indie Retail Academy. I help creative people like you sell their work to independent retailers.

I don’t do it for the good of my health. I don’t do it to be nice. Or because I’m working towards my Girl Guide badge in Advanced Helping. Or to pass the time until Midsomer Murders comes on.

Want to know the real reason?

You’re a creative person. So am I. I know that can be a damned hard thing to be. At times, the pressure to throw it all in the bin, get a job in a call centre and let that part of yourself drift away can be overwhelming.

Believe me, I’ve felt it.

But I think the world needs more people like you. You’re an artist. You’re plugged into something important. You conjure things up.

You create value.

So forget drifting away. Not on my watch. And especially not because starting and running a creative business is challenging. Let me say it again. You’re an ARTIST.

You’re naturally inclined towards solving problems, asking big questions, tuning into deep meanings and noticing things other people miss. Do those abilities remind you of anything? Like running a business, perhaps?

And while we’re at it, cast your mind back over all the obstacles you’ve had to overcome to get to where you are right now. It’s not exactly been a breeze, has it?

And yet here you are.

You’re a marvel of natural engineering. Just like a shark, only you have cooler hair.

You’ve already got the talent, courage and determination to create a successful business from your art. And today, I’m going to help you get ready for retailers.
I’m assuming:

  1. You make a lovely thing.
  2. It’s already selling pretty well.
  3. You’re ready to go up a gear.

This guide is designed to give you an understanding of how wholesale works and how it makes you money. Before we get to that, however, let’s take a quick look at some of the secret benefits of wholesale.

Selling your work to shops is a way of scaling your business.

That means producing larger quantities of your product, selling more in each transaction, widening your customer base and making more money. The wholesale business model can also make things more predictable.

When a shop places an order you’ll be able to work out how long it will take to make those items and therefore when you’ll get paid. When you sell directly to the public, you have to react to sales as they come in. Wholesale lets you call the shots much more.

And you have the opportunity to reach many more customers than you ever could on your own. When you team up with a retailer, your stuff gets promoted by their marketing strategy as well as your own. That can hugely increase the number of people who know about you.

But here’s one of the best reasons to get into wholesale.

For the freedom.

If you want to be your own boss and make a living from doing what you love, wholesale could be a game-changer for you.

Sure, it’s scary when you’re starting out, but you’ve done scary stuff before. Part of the fear is not understanding how the process works, and this guide is here to make that better.

Shall we get started?

So what the heck is wholesale, anyway?

At the risk of triggering an unpleasant flashback to that time in primary school when Mrs Wormthrapple made you stand up in front of the class and spell “physiognomy,” let’s start with a definition.

wholesale
noun the sale of goods in large quantities to a retailer.
adjective, adverb buying and selling, or concerned with buying and selling goods in this way.

It’s not exactly titillating, I’ll grant you, but it’s a good, honest, workmanlike kind of word. The two things to grab onto here are large quantities and to a retailer.

Wholesale is all about bigness. We’re usually talking about selling huge wodges of stuff when we use this word, not teeny tiny amounts. To put it in food terms, wholesale is an enormous side of roasted hog, not a cucumber sandwich.

If you sell your work directly to the public, you’re probably used to orders of only one or two of each item when you make a sale. That isn’t the case in wholesale. Shopkeepers don’t just want a couple of your hand-knitted nose-warmers, we want twenty, or sixty or a hundred-and-five. We need large quantities in order to keep serving our customers, and it’s less expensive for us to buy a lot all at once than small amounts again and again.

There are always exceptions, however, and it’s perfectly possible to wholesale a single item, but in general wholesale means BIG.

The other important bit of our definition is “to a retailer.”

If you sell your work to a shopkeeper who intends to resell it, that’s wholesale. Anything else, like selling on Folksy, Etsy, on your own site or at a craft fair, is retail.

Let me put it like this.

If you sell a nosewarmer to your gran, that’s retail.
If you sell three nosewarmers to your postman, that’s retail.
If you sell seven nosewarmers on Etsy, that’s retail.
If you sell me twenty-four nosewarmers so I can resell them in my shop, that’s wholesale.

Retail means selling small quantities of goods to members of the public for their own use. Wholesale means selling large quantities of goods to merchants for the purpose of resale.

So now we’ve got our heads around the definition, let’s get down to the really important stuff.

How does wholesale make you money?

I like the way you’re thinking.

Art is all very well, but you can’t retire to Bora Bora, pay your council tax or buy a box of Frubes with a carefully crafted objet. Seriously, try that in the ten-items-or-less queue at Tesco and see what happens.

But we’ve stumbled across rule one of Indie Retail Academy, which is:

Artists deserve to get paid.

It’s not original but as principles go it’s admirably succinct. And if it isn’t already, I’d urge you to make this your number one rule too.

As an artist you create value by conjuring up magnificent things from the ether and using your skill, experience, energy, unique perspective and training to make them a reality. That’s a noble pursuit and I hope you see it as such.

One of the reasons Indie Retail Academy exists is to help you make money from your art. If that idea makes you uncomfortable, here’s what I want you to know.

Being interested in money and wanting to get paid for what you do isn’t grasping, selling out, forgetting your roots or ANY OTHER CRAZY THING that might be flitting across your mind.

You’re an artist. You create value. You deserve to get paid. That is all.

So where’s the money in wholesale?

If you want to understand how selling your stuff to a shopkeeper leads to a happy feeling when you look at your bank account, the key word is VOLUME.

We’ll go into this in depth, but here’s the short version:

To make money in retail you sell small quantities of products at a higher price.
To make money in wholesale you sell large quantities of products at a lower price.

Yep, you read that right.

If you want to do wholesale, you’ll have to sell your work to shopkeepers for significantly less than the retail price. Usually about half, in fact.

Wait!

Before you fly into a rage, throw your computer out of the window and become the subject of a class action lawsuit by injured pedestrians, let me point out where things get good for you.

Yes, wholesale means selling your work for less per item, but it also means selling much larger quantities of items.

The money is in the volume. You make less on each widget, but your stockists are buying loads of widgets at once. Get it?

Looks like you might be able to buy those Frubes after all. But don’t start spending all your money on yoghurt just yet. Before we can go hunting for the big bucks, let’s work out whether your product is retail-ready.

I know. Yikes. But it’s going to be okay.

Oh alright, let’s have one Frube each just now. Just to keep us going.

This is weird but do it anyway.

Let’s imagine your product is on the table in front of you. Or on the wall. Or warming the nose of a small child who’s sitting in your lap. We’re going to take a really close look at it – and only it.

Let go of any worries about its price, your production schedule, or who nicked your egg and cress sandwich from the communal fridge even though it was very clearly labelled.

All that stuff is floating up into the sky or down into the earth.

It’s leaving your mind and your body because you don’t need it right now.

Bye, worries.

Bye, tension headache.

See you in hell, sandwich thief.

Now that stuff has gone, we’re going to think about your eyes.

Give your eyelids a flutter.

Man, you’ve got pretty eyelashes.

So you’re breathing in and out smoothly. You’re noticing where your body connects to the floor or your chair. You’re feeling the touch of your clothes against your skin.

Your eyes are beginning to feel really clear and open. Energy is flowing up from the earth, tingling all the way up your spine and into your eyes.

It feels like you can see better than you’ve been able to for ages.

And it’s taking no effort. You’re just breathing and seeing. And noticing the sensation.

So let’s look at your product. The whole thing, including any packaging, labels or tags.

Not as an artist.

Not as an entrepreneur.

You’re just looking. Perhaps in a way you haven’t looked at it before.

Look at the details. Take your time.

When you’re ready, answer these questions.

1. What colour is your product?

Is there a name for the exact shade you’re looking at? If not, invent one. Maybe it’s forest green, milk bottle white or the colour of wet sand. Be as descriptive as you can. If there are lots of colours, name them all.

2. What shape is it?

Is it a regular shape like a rectangle or a circle? If not, invent a name for the overall shape of your product.

3. What texture is it?

Smooth, rough, woolly? Where else have you felt a texture like that? Write down what it reminds you of – as many different things as you can.

4. Does your product have a particular smell or make a sound?

Describe it. If not, make one up. Maybe your painting smells like wet grass, or your birthday cards sound like pennies dropping into a pool. It’s okay to feel this is dumb. Do it anyway.

5. Imagine you’ve shrunk to the size of a pinpoint.

You’ve just landed somewhere on the surface of your product. What does the landscape look like to you? Is it dark and overpowering? Smooth and open? Write it down.

6. Now imagine that you’ve actually gone inside the fabric of your product.

You’re jostling up against its atoms. What’s the mood like in there? Are those atoms ready to party? Are they calm and serene? Write it down.

Gosh, that was intense.

You might feel it was intensely stupid, but here’s my point.

You know stuff that you don’t know that you know.

This little exercise might seem rather ridiculous to you, but I’m an actor. I once spent four hours pretending to be a tree frog. This is actually pretty tame for me.

The reason we did it is because sometimes when artists try to assess their work, a lot of things get in the way. Fear, for one. And a misplaced sense that it’s time to put your Grown-Up Serious Business Person hat on, and become someone who’s all about the spreadsheets.

That’s really not the case.

By playing that looking game, you just downloaded a boatload of valuable information about your lovely thing. You always knew it, but now it’s in the front of your mind.

So now, we’re going to look at your product again, but this time with your business eye.

But there will be no donning of terrifying hats. We’re simply going to observe whether the outward aspects of your product match up with its essence. Retail-ready products have inner and outer aspects that compliment each other. There’s no discord.

I’ll show you what I mean in a moment, but first let’s kit ourselves out with some examples. We’ll be referring to these throughout the next section.

These lovely things are made by Lee May Foster Wilson at Bonbi Forest, and Ruth Williams and Brendan Fan at I Am Acrylic.

Now let’s zip through the seven qualities of a retail-ready product.

1. It’s high quality.

Retail-ready products are of the highest possible quality. It doesn’t necessarily follow that they’re made of the fanciest materials on the planet, however.

It simply means the fabric of the object is stable and not about to fall apart, it has intrinsic value and the finish is perfect.

These things are all true of the products made by Bonbi Forest and I Am Acrylic. Take a look – the quality shines out of them.

Unfortunately, I can’t help you achieve this. As an artist, you must hold yourself to the highest professional and personal standards and produce work that you’re entirely proud of.

If you don’t, can’t or won’t, your work isn’t good enough to sell in a shop.

2. It does what it’s supposed to.

If it’s a piece of jewellery, the clasp works. If it’s a bath bomb, it fizzes when dropped into water. If it’s a printed scarf the dye won’t run in the rain. You get the idea.

Obviously, this can be subjective. The purpose of a painting might be to stir the emotions of the viewer, but clearly there’s no guarantee that will happen to everyone who casts an eye over it.

Nevertheless, the painting shouldn’t crack or fade if you say it won’t. Your stuff has to do what it says on the tin, not only when it’s first bought, but also over time.

3. It meets legal requirements.

As a producer of goods, you have legal responsibilities towards those who come into contact with them. It’s your job to know what these requirements are, to comply with the law and to ensure your lovely thing is not a hazard to others.

This could mean your product has to carry a warning – that it contains small parts which represent a choking hazard to small children, for example. It could also mean that you’re required to have your product tested or certified in some way before it can be sold.

So go looking for this information, be certain your work exceeds the minimum standards in your part of the world and investigate product liability insurance.

Retailers can’t risk their customers getting injured, or even disappointed, by the products they sell. We want to see that you’ve ticked every box.

4. It comes in robust packaging.

As a shopkeeper, there’s nothing worse than getting some lovely new product in stock, putting it out on the shelves then having to write it off a week later because the packaging rips or gets marked at the slightest provocation.

That’s a complete waste of money.

Your packaging concept has to stand up to life in a shop and look fabulous no matter how many people have touched it. Where necessary, it also has to properly protect what’s inside. Cellophane wrapping that tears easily looks shoddy and means your lovely thing could get damaged. That’s just not good enough.

Again, hold yourself up to the highest standards. Look at how other artists and big companies who make similar products package their work.

If you make jewellery, also think about providing gift bags or boxes, which is something both Bonbi Forest and I Am Acrylic offer. That’s really handy for both retailers and customers and it makes your work look and feel even more special.

5. Your branding is in good shape.

If you read the word “branding” and suddenly start hearing a high pitched whistling that blocks out all rational thought, that’s okay.

I SAID THAT’S OKAY. Just sit quietly for a while until the bad noise stops. We’re going to look at branding in detail in the next section.

For now, let’s start slowly by taking a closer look at the Lee May’s work. And let’s crack open a case of describing words while we’re at it.

Here’s how I might describe the physical objects she creates:

Jewel tones, floral, natural, feminine, tactile, friendly, relaxed, environmentally-friendly, fair-trade.

Now let’s look at some features of Bonbi Forest’s branding. Here’s another example of her logo, one of her products and its care label

I can see:

  • Natural forms.
  • Relaxed, slightly undone feel.
  • Hand-drawn and hand-coloured lettering.
  • “Ghost prints” sounds pretty special.
  • Warm, friendly and useful note on the label.
  • The label and tag are printed on high-quality card.

So there’s a big overlap here between the physical reality of Lee May’s product and the ideas she’s purposefully attached to the product, right?

Everything’s pulling the same way. There’s no conflict between the messages her branding is giving out and the work itself.

Polished, cohesive branding like this is what retailers want to see. Products with good branding are easier to sell because it’s obvious who they’re for – not only to the shopkeeper, but to the customer too.

From what we’ve noted down above, what kind of person do you think this scarf would appeal to? How about:

  • Women.
  • Aged from about 16 upwards.
  • Who’ve been known to get chilly.
  • Who enjoy natural forms and patterns.
  • Who have a feminine and sophisticated sense of style.
  • Who like the fact it was made by an artist, not in a factory.
  • Who care whether the items they buy have been ethically produced.
  • Who like relaxed and playful accessories.

This is only scratching the surface and there are lots of other things we could add, but just look at what’s happened.

We’ve gone from having a target customer of women, which is roughly 3 billion people, and refined it down into a much more manageable group. Lee May’s branding waves a big hello to this collection of people. It helps them to find her.

As a side note, it’s also worth mentioning that retail-ready branding is unobtrusive. Don’t slap a massive label on the front of your product. Most shopkeepers will just peel it off and that’s rough on the fingernails.

It’s fine to have a tag or sticker with your name, details and website address somewhere on your lovely thing. Just make sure it doesn’t draw attention away from the lovely thing itself.

6. It’s photogenic.

If you can’t take a great photo of your product it’s not ready to sell to shops. This isn’t about your photography skills. If you suck at taking pictures it’s easy enough to learn or to find someone who knows what they’re doing. It’s about the product itself.

Let me tell you a story. In the early days of my store, Merry + Bright, we stocked a small collection of ceramic cups. They were kind of off-white with smooth, tactile surfaces and no handle. If you picked one up it felt great in your hand – pleasingly round and comforting, with no unnecessary details.

If you held one and stared moodily out of the window, you could easily pretend you were a Swedish detective trying to solve a series of grisly murders.

So the cups were great in person. The trouble started when we tried to take a picture of them for our website. Have you ever tried to take a photo of a featureless off-white cup against a white background? The result is so desperately boring that after the twenty-ninth try I was ready to commit a grisly murder of my own.

A bit of arterial spatter would’ve really livened it up, to be honest.

We tried coloured backgrounds and so on, but that meant it looked weird beside the other items on the page. Fab product, awful pictures.

You need to be able to take great photos of your work in order to sell it to retailers. They need great photos in order to sell it to their customers. Photos are a big deal now. Yours have to be of the highest standard, and the product itself must be photogenic.

7. Your product has shelf appeal.

You know that thing some people have?

You know, that thing.

They might not be the most conventionally attractive person in the room, but you can’t take your eyes off them. They somehow seem to take up exactly the right amount of space. You want to keep looking at them for a tiny bit longer than normal. When they ask you for a pen you get flustered and accidentally ask them to marry you.

That’s charisma. It’s a rather mysterious quality and it’s hard to put one’s finger on exactly how it works. One explanation is that it’s a combination of personality, presence, communication and body language.

Your product could do with a bit of that.

The seventh element of being retail-ready is a sort of charisma for inanimate objects. It’s called shelf appeal. It’s not a specific requirement, as such, more a combination of the previous six elements.

It’s a glimmer of magic around a product that makes a customer drop the bag of cat litter they’ve just bought, glide over, pick it up and huskily whisper “Where have you been all my life?”

Retailers live for moments like this. Sure, it makes the till ring and to us that’s a really sexy sound. But there’s also something in there about joy. Serving a customer who’s delightedly in love with what they’re buying is a truly joyful experience.

It reminds us shopkeepers that we’re not just meat puppets who endlessly empty and fill shelves and stockrooms. We remember why we wanted to open a shop in the first place. I can’t tell you how to imbue your work with shelf appeal, other than to give yourself to the process of making and selling it.

You’re the expert on this one.

How ready is your product?

Before we decide about this one way or another, let’s take a second to check where you are.

Each line below is a continuum for one of the seven elements of retail-readiness we’ve just looked at. The line runs from not ready to very ready. Consider what we’ve talked about. Then look at your product and mark its current position on the line.

For example, if you think your product is of the highest possible quality the line would look like this:

If you think your branding could do with a bit of sprucing up, however, the line might look like this:

Okay? So get a piece of paper, draw some lines and be as honest and accurate as you can. Here we go.

1. Quality

2. Functionality

3. Meets legal requirements

4. Packaging

5. Branding

6. Is it photogenic?

7. Shelf appeal

Tweak it like you mean it.

One more thing then it’s time for a very large gin and tonic.

Fish out your results from the first exercise we did. You know, when we got a little crazy.

We’ve now looked at your product in two ways – inside and outside. If the outward appearance of your product is fighting with its inner essence, your product isn’t ready to sell to shops.

Your job is to bring harmony.

Throw a bucket of water over them, distract them with a tube of Smarties or sit both sides down and get them to talk about their feelings. Whichever approach you take, any trace of conflict between the inner and outer aspects of what you make must be soothed away.

Look at the scores you gave your product above. In which areas are you less than ready? Branding, functionality or packaging perhaps?

To get from “not ready” to “extremely ready,” something has to change.

You already know what that thing is. To uncover it, have this kind of conversation with yourself:

“Okay, I’ve tuned into the atoms that make up my product, and I know what kind of mood they’re in. I’d describe that mood as __________. So how can I adjust my branding so it reflects that mood?”

Or:

“Hmmm. My packaging doesn’t seem to be quite ready for retail yet. Atoms! I need your help. I’ve got a packaging problem. Any suggestions on how to bring it into line?”

You know what?

Have the gin first. It’ll make talking to your product’s atoms waaaay easier.

Are YOU ready?

Don’t worry. We’re not going to talk to your atoms, and if you want me to tweak your features you’ll have to take me out to dinner first.

But this is important.

Starting and running a wholesale business is going to have a big effect on you. Since I don’t know what your circumstances are I can’t tell you exactly what kind of effect, but rest assured that you’re going to have to work hard. Maybe harder than you’ve ever worked before. Are you up for that?

Only you can answer that question, but here are some things to think about. You’re going to need:

1. Figures that stack up.

We’re going to look at this in detail later, but it’s sufficient to say that your wholesale business stands or falls on the figures. Two things are definite: you’ll have to do some maths and sometimes things are going to get tight financially. Can you cope with that?

2. A production plan.

Do you actually know that you can produce a certain amount of your product within a specific timeframe? Retailers will want to know the turnaround time when they place an order, and it’s no use if you say their delivery will arrive in a week when it’s actually going to take you a month to make all those items.

Can you make that many and still fit in eating, sleeping, time with your family and all your other commitments?

3. A shipping plan.

You’re going to be sending out lots of parcels. Any idea how much that’s going to cost?

4. A packaging plan.

As we’ve talked about, whatever packaging your item is sold with needs to stand up to being posted, unpacked, merchandised and examined by customers.

Secondly, you need to know how you’re going to ship a delivery without it getting damaged. You’ll probably need things like big boxes and environmentally-friendly packing materials.

Have you got somewhere to store and use all that stuff?

5. A website and good photographs.

Retailers need to see really good photos of your work – that means well-lit, in colour, with a mix of white box and lifestyle shots. One important place to put them is on your own website. Setting up your own home on the web, with your own domain name, makes you look like a professional outfit.

It also gives you the chance to convey a more rounded picture of who you are to potential stockists. They can check out your blog, find out more about you and perhaps read some glowing reviews from previous customers. Each of these little things helps to build a bridge between you and your target retailer.

Have you got the time and skills to create and maintain a decent website? If not, are you willing to learn or can you afford to pay someone to do it for you?

6. A marketing plan.

Approaching shopkeepers about stocking your work is a huge topic. It’s why I created What Retailers Want.

You need to research shops, find potential stockists and know what to say when you do get in touch. To increase the number of connections you make, you might also want to consider things like exhibiting at trade shows or, eventually, employing a sales rep.

7. A good grasp of the lingo.

Shops have a whole language of their own – terms like minimum order, carriage paid and net 30 days. In order to sell to retailers you need to know how to talk like retailers.

8. A buyers’ pack.

This is a package of information – either digital or on paper – containing the nitty-gritty stuff a retailer needs to know in order to make a decision about stocking your work. It includes:

A cover letter or email, personalised to each specific shop, which introduces your work and pitches your products.

A line sheet or catalogue which shows what you sell, your wholesale prices and all the other details retailers require. If your collection is small or you can’t stretch to a full catalogue yet, a smart-looking line sheet is almost as good.

Your terms and conditions. Do you operate on a sale or return basis, or is it strictly wholesale (do you know the difference?) Is payment pro-forma or 30 days? Do you have minimum orders or quantities? Is there a carriage paid level? Are you registered for VAT or another sales tax? What are your cancellation, damages and returns policies?

An easy-to-use order form, which helps the retailer choose and, if you wish, offers incentives.

9. Industry knowledge.

This is a bit of a no-brainer. You need to know what’s going on in your sector or you risk being left behind. Staying current means you and a potential stockist are on the same page.

In fact, if anything you should be a little bit ahead. You need to know who your competitors are and be able to express what’s different about what you do.

This means reading magazines, visiting trade shows and being informed about the world you’re working in.

10. The desire to build relationships.

Have you thought about how you’ll encourage a retailer to keep ordering your products?

Taking time to build a real relationship can mean that the orders keep coming your way even when a retailer is cutting other suppliers. For this to work, you need to regularly check in with your stockists and find out what’s happening at their end.

Can you offer exclusivity within their area, high-res photos so the retailer doesn’t have to take his own or promotional material to go on the shelves alongside your products? How can you contribute to their success?

11. An idea of what you’re getting into.

This is going to take up a lot of your time and energy.

A LOT.

As we saw, the driving force behind wholesale is volume. Everything you currently do gets scaled up. That can mean more money, but also more items to make, more boxes to pack, more shops to contact, more photos to edit when it’s already 3am.

Does the idea of all this make you happy? Does it light you up inside? You don’t have to answer right now, but keep checking in with how you feel.
 
 

What is branding?

Ah, branding.

It used to mean something unpleasant involving the hindquarters of a cow, now it’s a fluid concept that strikes fear into the heart of fledgling entrepreneurs everywhere.

Branding is about ideas and desire. And desirable ideas. If you want to sell your work, to retailers or anyone else, you need to know about branding. There are lots of ways to explain it. Here’s my way.

Humans live in two places. The first is in the physical world, which is filled with physical objects like stones and cats and melon ballers.

But humans also live in another place, and that’s inside our own heads. Instead of physical objects, that world is filled with ideas.

So there’s a physical melon baller, which you hold in your hand. And there’s the idea of a melon baller, which you hold in your mind.

Branding is the process of attaching a specific idea to a specific object.

Instead of letting people look at your stuff and come up with their own ideas from scratch, you give them a bit of help.

Now, we can easily agree on the characteristics of the physical melon baller I have here. It’s got a nice yellow handle, the metal parts are all shiny and it’s easy to use, even on melons which aren’t completely ripe.

Here, have go.

Fun, right? Melon balls are definitely due a comeback.

It’s much harder, however, to say for definite what the idea of a melon baller looks like. That’s partly because we can’t see into peoples’ heads, and partly because each person’s ideas are shaped by their own unique experience.

When Tim sees a physical melon baller, for example, he gets these kinds of ideas in his mind:

  • Fussy.
  • Tricky to use.
  • Old fashioned.
  • Pointless.
  • Just cut the damn thing up with a knife.

It’s fair to say Tim’s not a fan of melon ballers.

They don’t speak to him except in an annoying way. To get Tim to buy a melon baller, you’d have to attach a seriously attractive idea to it – an idea desirable enough to overcome all his current, negative ideas about them.

When Jeremy sees a melon baller, however, he gets these ideas:

  • Old fashioned.
  • Vintage.
  • Kitsch.
  • Nostalgic.
  • Kitchens in the 1950s.
  • Taking time and care over how food looks.
  • Playful and a tiny bit glamorous.

Wow. Jeremy’s got a different take on the melon baller question.

He rather likes them. He’s much more predisposed to buying one than Tim. So let’s say Jeremy’s in a shop. He’s got a spare tenner in his pocket and he sees two identical melon ballers. They’re both £9.50 and are the same in every respect, except for their branding.

Which one will he pick? Well, let’s take a look.

Okay, call off the dogs. We can probably expect Jeremy to pick the first melon baller.

Why? Because it coincides with the pictures that are already in his head. The company which makes the first melon baller has attached these ideas to it:

  • Fun.
  • Retro.
  • Nostalgic.
  • Quality like you got in the old days.
  • Heritage.
  • Tried and tested design.
  • Vintage.

They did this through their branding, which includes:

  • A retro colour combination.
  • Typefaces and shapes which are reminiscent of those used in the 50s.
  • The word “original” as in “the original and best.”
  • “Original” also has connotations of heritage and longevity.
  • They’ve also used “premium” which backs up the idea of great design.
  • They’ve included the year they started making melon ballers, which is actually in the fifties.

This product is practically jumping up and down in front of Jeremy, begging him to buy it. It’s calling to him because it matches up with all the favourable ideas about melon ballers he already has in his mind.

But let’s go further.

Why has Jeremy even got those ideas in his mind? Why does he give a toss about melon ballers at all? Tim doesn’t.

The reason is that the pictures in Jeremy’s mind – his ideas about nostalgia, fun, playfulness and so on – reflect deep emotional needs.

I know.

You wouldn’t think a melon baller could satisfy a deep emotional need but there you go. People don’t go around with their heads full of random ideas. There are always reasons for the meanings and pictures we attach to things.

Maybe this is how Jeremy’s mind works:

Melon ballers are kitsch and quirky —> Satisfies need for play, need to feel unique

Melon ballers are retro and nostalgic —> Satisfies need to feel safe, triggered by memories of grandmother’s kitchen.

Melon ballers evoke heritage and glamour —> Satisfies need to feel I deserve the best, that I’m special.

To get really good at branding your work, you need to look at the deep emotional needs it satisfies. It won’t satisfy every need for every person, but you should be able to narrow it down to two or three.

If you don’t know what those needs are, ask someone who loves what you do. Keep asking them until you get right down into the bedrock of why they love it.

That’s where you’ll find the gold. Satisfy those deep needs and your customers and stockists will come back again and again.

Making yourself visible.

The last time we saw him, Jeremy was standing in front of a rack of melon ballers.

One of them was leaping out at him while another model left him cold, even though it was identical in every way. The decision about which melon baller to get suddenly became very easy for Jeremy – the minute he saw the packaging.

So branding is not only a way of attaching favourable ideas to your product. Branding is also a way of making your stuff visible to the particular people who are looking for it. It’s a way of getting their attention, of saying “Hello! I’m over here! I’ve got something that you’re really going to like, Jeremy!”

Great branding is like a flare.

It gets the attention of people who already have favourable ideas about your kind of product, helps them to find you and makes their decision about buying your stuff really easy.

But here’s the important bit.

That flare is not for everyone. If you try to create branding that appeals to everyone, you end up reaching no-one.

Products that blast out “Hello!” messages to everyone with a pulse just become part of the noise of modern life. We tune them out. For branding to work, you have to be really specific about who your product says hello to.

It’s time to talk about your ideal customer.

Choosing who to talk to.

When you’re clear about who your product is for, everything gets easier. It’s easier to sell it to customers. It’s easier to sell it to retailers. The right partners become obvious. You’ll spend less time searching for potential stockists and less time pitching your work to retailers who aren’t interested in it.

Here’s the one word you need to grab from this section.

It’s niche.

Broad brush strokes are out. As we saw, if you try to appeal to everyone you’ll reach no-one. You’ve got to get micro. That’s where the money is. Why?

Okay. Say I’m trying to choose between two paintings. They’re both landscapes, they’re both in oils and the colours, quality and price of the pieces is the same.

One is by an artist who paints everything. She paints still lives, portraits, seascapes, abstract art and she’ll even do you a picture of your dear departed dog McMuffin if you want her to.

The other painting is by an artist who only does landscapes.

In fact, she’s spent twenty years painting landscapes. Sometimes she paints the same view over and over again. She does tiny landscapes and big landscapes, but whatever she produces, it’s always a landscape.

She’s painted so many landscapes, that she’s become known as the Landscape Lady. That’s her thing.

Now, I’m choosing this painting for my boss’s office. She’s sent me out with a thousand pounds and told me to come back with something she can gaze at when things get stressful. I want to make the best possible choice.

Which painting am I going to buy?

Easy. The Landscape Lady is going to get my money.

Even if I know nothing at all about art, which is absolutely the case, I can see that the Landscape Lady is a specialist. If she’s been painting the same tree and hill and bit of hedge for the past twenty years, she’s probably got pretty good at it.

Added to that, she’s got a name for being the artist who knows about landscapes. If you want a really special landscape painting, she’s the person you go to.

So as well as buying the painting, I’m buying her reputation.

If an angry investor storms into the office, demanding to know why my boss is spending so much on mini bagels, she’ll be able to distract him by saying “Hello, Hugo. Did you see my new painting? It’s by the Landscape Lady.”

And, crucially, he’ll know who that is.

It’s hard to get known for being really good at one particular thing when you do everything. That’s not to say that the other artist has to restrain herself to a single subject if she doesn’t want to. She can paint any damn thing she likes in her spare time. But if she wants to make a serious business out of her art, she’d be wise to pick one or two subjects that she’s really good at.

The pets, for instance.

I mean, I feel really comforted by having this portrait of McMuffin hanging over my fireplace. Feels a bit like having him back again. It’s almost as though that painting has somehow satisfied one of my deep emotional needs.

You know the cat’s been looking peaky lately. Chairman Meow is twenty seven now, after all. Perhaps when he is, um, no longer with us I might ask that artist to do a painting of him for me too.

Then there are my pygmy hedgehogs, of course. One of them has a very bad cough. Do you think she does hedgehogs?

See? Niche.

Finding your niche.

Working out what kind of niche customer to target is not about demographics. Knowing their age group and which newspaper they read won’t help you sell anything.

Knowing WHY they read that newspaper and how they secretly feel about being 37, however, is a different story.

In fact, you’re going to tell me that story right now.

We’re going to play a game you might remember from being a kid. It’s that one where someone writes the beginning of a story at one end of the paper, folds it over and passes it on.

The next person continues the story, folds it over and passes it on. When the paper’s been all the way around the group, you unroll it and read out the whole thing. Hilarity ensues.

Yeah, I never thought it was that funny either. But we’re not trying to be funny.

What we’re trying to do is narrow down your target customer from every person on the planet to something much, much more niche. So get your long bit of paper, and at one end write this:

My ideal customer is a human being.

Fold it over. Now answer these questions in turn, folding over between each one.

1. Is your ideal customer male or female?

2. What age are they?

3. How do they feel about being that age?

4. What colour of socks are they wearing right now?

5. Do they have children?

6. What colour is their hair?

7. Is it curly, wavy or straight?

8. Are they short or tall?

9. What did they have for breakfast this morning?

10. What do they do all day?

11. How do they feel about what they do all day?

12. If your ideal customer could pick any age and stay that age forever, which age would they choose?

13. Why?

14. What’s their favourite drink and why?

15. What does your ideal customer’s living room look like?

16. What do they wish their living room looked like?

17. What’s the best possible present they could receive on their birthday?

18. What does your ideal customer have nightmares about?

19. Where do they go on holiday?

20. Why do they pick that place?

21. What’s their favourite book?

22. What really annoys your ideal customer?

23. What problem does your product solve for them?

24. How does it solve that problem?

25. How does your ideal customer feel about having that problem solved?

26. Write down a reason why your ideal customer wouldn’t immediately buy your product.

27. And another one. What’s stopping them from buying it? What’s running through their mind?

28. One more. What other possible objection could they have to buying your product this very second?

A few tips before you get going:

Don’t spend ages reflecting on these questions. Your first response is usually your best one in this case.

Answer your own questions too. Write down how your ideal customer feels about jewellery, or what she most hates about buying birthday cards.

See if you can find a photo of your ideal customer. Rake around on Pinterest or tear something out of a magazine. Stick it up in your workspace to remind you of who you’re making things for. This can be surprisingly helpful.

When you’re finished, unroll the paper. The person described is who your brand has to say hello to.

Not anyone else, just them.

You now have much clearer ideas about visual things like the colours and style they prefer, as well as a handle on some of their deep emotional needs.

You’re also aware of some of the reasons why your ideal customer won’t buy your product. This means you can work backwards to take those objections away.

If their reason not to buy is it’s too expensive, maybe it’s time to emphasise the fact that your product will give them pleasure for years to come.

Your job is to soothe away those concerns. And to be clear, I’m not just talking about your logo here. Remember that branding is about attaching an idea to your product – it informs everything from your packaging design to how you answer the phone.
 
 

Figuring out your wholesale price

Your wholesale price is the amount you charge retailers for your work. It’s the lowest price at which you’ll ever sell the lovely thing you make, but that doesn’t mean it’s a painful, humiliating, welcome-to-the-workhouse kind of price.

Quite the opposite, in fact. Let’s start with a clean slate.

For the moment, forget everything you know about pricing your work. Clear your mind.

I’ll help.

Picture a perfect beach being gently washed by the tide of a lazy ocean, leaving behind acres of smooth, golden sand untouched by human hand or foot.

That’s your mind, that is.

Don’t ask me what that crab is doing there. It’s probably symbolising your latent desire for prawn cocktail crisps.

Now, what we’re going to talk about next involves maths and money. You may or may not find that rather triggering, by which I mean you might feel immediately overwhelmed, uncomfortable or unable to take it all in right now.

If this is you, THAT’S OKAY.

You’re allowed to hate this stuff. I mean it. Hate away.

You don’t have to be a mathematical or financial genius to run a kick-ass wholesale business and take your holidays in Aspen.

In any case, we’re not actually talking about you right now. All we’re doing is taking a stroll through the theory. We’re just shooting the breeze. No decisions have to be made or conclusions drawn.

Before we get started, an important caveat. There is no perfect pricing system and one size certainly doesn’t fit all. To get specific advice tailored to your business, talk things over with an accountant or another qualified professional.

The system we’re going to talk about here is one of many options.

Some artists take a different route and prefer to make a clear division between the wholesale and retail elements of their business. That means they don’t factor in costs connected to the retail side of things, like Etsy fees, when calculating their wholesale price. They keep the two separate.

That might be something that’s helpful to you at some point, but for now we’re going to keep things simple and look at your business as a whole. You might ultimately decide on another method, but regardless of how you arrive at your wholesale price, it’s essential that you take the stuff we’re going to look at below into account.

It’s also worth mentioning that what we’re going to work out is the wholesale price for one item. If you make more than one kind of product, you’ll need to go through this process separately for every item in your collection.

Part One: Direct Costs

This bit is easy.

It’s simply the cost of all the materials you use to make each item.

To work out this figure, collect your receipts and find out what you paid for the raw materials that make up your product. Whether it’s paper, inks, fabric, clay, canvas, silver, or wool, your lovely thing is made from something, and you probably had to fork out some hard-earned cash to obtain it.

Let’s say you make screen prints using a gocco printing machine. Your prints are pretty special because you use extra thick paper and three kinds of ink. You also use three fine mesh gocco screens and six light bulbs per design. Your gocco machine needs crisp photocopies to burn onto the screen, so you have to take your original drawings to the print shop before you start.

When the prints are dry you sign them, back them with stiff card, slide each one into a biodegradable cellophane pocket and seal the whole thing with a custom sticker.

You know, I’m suddenly remembering why I sell lovely things rather than make them.

From the receipts you’ve ferreted out of your bag and pockets, the cost of buying the materials for your last batch of prints broke down like this:

Paper, cut to size by you = £9.50
3 Tubes gocco ink + postage = £12
Pack of 10 gocco light bulbs + postage = £22.75
That’s £2.27 per bulb and you used six, so the cost of bulbs for this particular batch of prints = £13.65

3 Gocco screens + postage = £7.50
Photocopies of drawings = £1.50
100 Cellophane pockets + postage = £6.21
100 Pieces of stiff card + postage = £10.29
100 Customised stickers + postage = £4.25

Added together, total cost = £64.90

You made 25 prints with these materials. If we divide £64.90 by 25 we get the direct cost of making each one, which is £2.59

Part Two: Overheads

This time we’re going to look at some other costs in your business. We’re interested in all the stuff you need in order to operate, but which isn’t directly required to make your lovely thing.

We’re talking about expenses like:

  • Etsy or Folksy fees.
  • Website hosting fees.
  • Paypal fees.
  • Cardboard boxes, bubble wrap and other packaging materials.
  • Rent for your studio if you have one.
  • Stationery.
  • Advertising on blogs or in magazines.
  • Professional fees for help from people like accountants or web designers.
  • Transport to and from your studio.
  • Equipment like a glue gun, metal-working tools or a printing press.
  • Specialist design or financial software you use only for business.
  • Subscriptions to industry magazines.
  • Research materials.
  • Studio utilities – electricity, water, phone, broadband.
  • Insurance.

This isn’t a complete list but I’m sure you get the picture. Everything that indirectly contributes to you being able to make and sell your work is covered in this part of your wholesale price.

To mash down all those costs into a single figure we can use to calculate your wholesale price, we’re going to add them up then divide the total by the number of items you can produce in a month.

So pull out your calculator and add up all your indirect expenses for a single month.

Now decide what quantity of this particular item you can realistically make in that month.

If you can, look back at your records and count up how many you’re generally making in a four-week period.

Now take the first number and divide it by the second. The number sitting on your calculator is your per-item figure for overheads.

Let’s go back to pretending you’re a gocco-printing whizz and walk through that again. Your overheads for the month look like this:

Etsy fees = £36
Blog advert = £25
Pack of 12 stiffened envelopes for posting out orders = £4.99
Paypal fees = £12.50
Magazine subscription = £4.50
New guillotine for cutting paper to size = £12.99
Squeegee for gocco machine + postage = £5.50

Total = £101.48

Now let’s think about how many items you’ll realistically be able to make this month. Let’s say you do two print runs of 25 each, giving a total of 50 new items.

So take your total of £101.48 and divide it by 50.

That gives a total of £2.02. This is part two of your wholesale price.

Write it down somewhere obvious and go have a cup of tea or something. And put some sugar in it – you’ve earned it.

When you’re ready, we’ll move on.

Part Three: Your Time + Skill

This is where lots of artists and designers shoot themselves in the foot.

Let’s just say it. Creative people often suck at putting a price on their work. We can also be pretty dreadful at putting a price on our time, labour and expertise. Maybe it’s because when you’re closely connected to something it’s hard to give it a market value.

When you’re in a dynamic, evolving relationship with something, as you are with your creative process and the lovely thing you make, trying to see it as a commodity can feel unnatural.

Wrong, even.

But remember rule one of Indie Retail Academy: artists deserve to get paid.

You create value. It’s time to allow some of that value to come back home.

So how much do you want to make an hour? What’s a reasonable wage for everything you do to run your business? How much time do you spend working on it, anyway?

Need a quick reminder of what you do? Chances are it’s all of this and more:

  • Product design
  • Sourcing and purchase of raw materials
  • Prototype development
  • Product manufacture
  • Branding
  • Packaging design
  • Copywriting
  • Photography
  • Sales
  • Customer service
  • Web design
  • Social media marketing
  • Email and print marketing
  • Accountancy
  • Advertising
  • Inventory management and dispatch
  • Administration
  • Cleaning
  • IT support (fixing your sodding printer / phone / website)
  • Continuing professional development

That’s rather a lot, right? So what’s all that worth to your business?

If your mind’s gone blank, try this little trick to figure out what your hourly rate currently is.

  1. Add up the amount you made in sales from the last month.
  2. Count up how many items you sold to make that amount of money.
  3. Work out the direct cost of making that number of items.
  4. Work out your monthly total for overheads.
  5. Add your direct costs for the items you sold to your monthly overheads.
  6. Subtract this figure from the amount you made in sales. This shows how much was left over once your costs are taken care of.
  7. Work out how many hours you spent on your business last month.
  8. Take the figure for left-over-money and divide it by the number of hours you worked.

This figure is your current hourly rate.

For our printmaker, that looks like this:

She made £350 in sales last month.

She sold 25 items to make that much money.

The direct cost of making those 25 items is £64.90.

We know her overheads total for last month is £101.48.

Add her direct costs to the overheads: £64.90 + £101.48 = £166.38.

Subtract £166.38 from the £350 she made in sales, to give £183.62.

She spent 27 hours working on her business last month.

So £183.62 divided by 27 gives an hourly rate of £6.80.

£6.80 per hour. Shocked?

Doesn’t seem very much in light of everything that’s involved in running a business, huh?

Do this revealing little calculation on your own figures and let it inform the decision you make about your hourly rate.

Here’s one thing to keep in mind:

You’re probably aiming too low.

Remember, you’re not trying to be affordable here. We’re not actually thinking about your stockists and customers at all right now. They come later.

All we’re interested in at the moment is rewarding you for what you put in.

So set your rate at a figure you think is a fair reflection of your value, skill and experience, and that’s a little bit higher than what you’re comfortable with.

Whether that’s £10, £50 or £100 an hour is entirely up to you.

Once you’ve settled on your hourly rate, there are a few final calculations to do and we’re done with part three.

Work out how many hours it’ll take to make the number of items you want to sell in a month. Include not just the actual making time, but all the hours you’ll spend on the other areas of your business too.

Multiply that number of hours by your hourly rate and you’ll get a cost for your labour for a whole month.

Divide this figure by the number of items you’re going to make in that time. This number is part three of your wholesale price.

Imagine you’re a printmaker again and let’s take a quick spin through that.

You decide to pay yourself for your time and labour at the rate of £20 per hour.

In order to make enough items and keep your business running smoothly, you’re going to spend 30 hours on your business.

So your labour cost for the whole month is £30 x 20 hours = £600

We’ll divide that by the number of items you’re going to make in that time, which is 50, so that’s 600÷50 = £12.

So your payment for your time and labour comes in at £12 per item

That’s part three of your wholesale price done and dusted.

Phew! That was a tough one.

Why don’t you take yourself out for a pizza, and don’t hold back on the fancy toppings. Go on, have those extra artichokes, you deserve them.

Part Four: Profit

Now we’ve hit the motherlode. Building profit into your wholesale price is crucial.

Why? Because this is the part that allows your business to grow.

What we’ve worked out so far is your cost price.

If we add up the three figures you wrote down at the end of each section, we get an overall figure for how much it costs to make your lovely thing.

To put it in a more mathematical way:

Direct costs per item + Overheads per item + Time and Labour per item

= Cost price per item.

But that’s not enough. For your business to grow you need profit. Profit is more than just the money that’s left over when your expenses are taken care of.

Profit is rocket fuel.

Building profit into your wholesale price means that if you hit your sales targets, you’ll make more than you need to meet your basic expenses. When you’ve got more money than you need, you can invest it back into your business.

That might mean new equipment, a better work space, a research trip, an employee, a new logo, a new website, prototypes of new products, a coaching session, an accountant, a PR company, a stand at a trade show or something else entirely.

As we talk about in Give Yourself A Raise, investment allows your business to go up a gear. It allows you to do more, be more, give more and sell more to your beloved stockists and customers.

It also means you can do less.

Less of the stuff you hate (your accounts, cleaning, setting off for distant craft fairs at four in the morning) and less of the stuff that exhausts you.

When your business is profitable you’ve got the time and space to set up systems that take you out of the equation. No more personally replying to a ton of identical customer service enquiries when you’d rather be working on a new product.

Or learning how to work some new-fangled social media site when actually you don’t give a toss and would much prefer to be at a cool artists’ convention in Berlin, making connections and getting inspired.

When you make a profit, you can afford the time to write a really comprehensive FAQ page that cuts your customer service enquiries by half. You can also either pay someone to look after your social media strategy, or just be confident enough to say “You know what, my business is doing great so let’s not even bother with this new site right now. If it’s still around in three months, we’ll think about it then.”

Profit allows you to spend less time working in your business, and more time working on your business. It gives you the space to take a step back from the details and look at the big picture.

Still not convinced? Think of it this way.

Building profit into your wholesale price is like mailing a present to yourself.

You’re setting things up so that future-you is well equipped to deal with the opportunities and challenges that arrive further down the road. In three months time, maybe your printer will finally give up the ghost.

If you build in profit now, future-you can buy another one.

This time next year, you might be invited to exhibit at a prestigious trade show.

If you build in profit now, future-you can immediately put down the deposit and start planning her stand.

In two years’ time you might decide to overhaul your website, be accepted to stock a major high street retailer, or want to spend six months on sabbatical in Japan.

If you build in profit now, it’ll be easier for future-you to say “Yes!” to all those things because she’s got the resources to make them happen. That’s how profit helps your business, but let’s not forget what’s most important here.

(Hint: it’s you.)

Choosing a profit figure.

So how do you work out the profit part of your wholesale price?

Easy. For now, all you have to do is pick a figure.

You can decide to make it a percentage of the cost price or simply an amount of your choosing. We’re going to revisit this later and do some fine-tuning, so for now it’s fine to choose a profit figure that feels about right.

But keep in mind everything we just talked about, okay?

Let’s go back to our printmaker and work out her profit figure.

The three amounts we’ve calculated for her so far are:

Direct cost per item : £2.59

Overheads per item: £2.02

Payment for time and labour per item: £12

If we add these up we get her cost price, which is £16.61

For now, this printmaker decides to make her profit figure 50% of the cost price.

So £16.61 ÷ 2 = £8.30 per item

Picked your own profit figure?

Great. That’s part four of your wholesale price.

Setting your wholesale price.

The moment has finally arrived. You and your calculator have a date with destiny. You’re about to meet your tentative wholesale price.

I know, I’m shaking too.

It’s simple. All you have to do is add up the four figures you just worked out. To put it in way mathematicians would approve of, it looks like this:

Direct costs per item + Overheads per item + Time and Labour per item
+ Profit per item

= Wholesale price per item

Go on. Grasp the device in your trembling hands and do the sum you were always meant to do.

I’ll join you by working out our printmaker’s wholesale price. It looks like this:

£2.59 + £2.02 + £12 + £8.30 = £24.91 is her wholesale price per item

Got it?

Write down your figure. Put down the pen. Now try to collect the scattered fragments of your consciousness. Maybe have a jammy dodger.

And by the way, very good work.

How wholesale turns into retail.

Your wholesale price is nothing less than the rock your business is built on. It’s the minimum amount you’ll ever part with your work for.

Set it too low and your business will slowly suffocate under the weight of your costs and expenses, no matter how many stockists you have.

Set it too high and retailers will think there’s no opportunity for them to make money from selling your product, regardless of how amazing it is.

You literally can’t afford to get your wholesale price wrong.

Now, the wholesale price you wrote down a moment ago isn’t exactly solid. It’s an educated guess.

You’re reasonably certain about the first three parts – direct costs, overheads and labour – but you pretty much plucked your profit figure out the air.

In a moment we’ll refine and polish your wholesale price until it’s so solid and shiny you could mount it on a ring and use it to propose to Benedict Cumberbatch.

Or, you know, someone else. Gosh, it’s hot in here, isn’t it?

Before we get into that, however, let’s talk about how your wholesale price gets magically transmuted into the price customers pay in a shop. Here’s how it works.

When you sell your lovely thing to a shop, the retailer pays you the wholesale price. They then need to work out the retail price of your product, which is the amount they charge their customers.

To get this figure, the shopkeeper multiplies your wholesale price by at least two. Like this:

Wholesale price x 2 = Basic retail price

If we circle back to our printmaker again, that would mean her basic retail price looks like this:

£24.91 x 2 = £49.82 is the basic retail price.

Those figures are a bit untidy, so let’s round them off and say that her tentative prices for this particular print are £25 at wholesale and £50 at retail.

Do this sum to work out your own retail price and write it down.

In reality, many shopkeepers will multiply your wholesale price by more than 2 to arrive at their retail price.

They might multiply it by 2.3, 2.4, 3 or even higher depending on their audience and circumstances, and that’s absolutely fine.

 

Undercutting: not cool

So now you’ve got that idea under your belt, and before we move on to refining your prices, let’s talk about the shadowy world of undercutting.

You see, what some artists and designers don’t realise is that when you start selling your work to shops you change the basic fabric of your business.

This is in part because you start serving a whole new type of customer – your stockists.

Now, most entrepreneurs would agree that making a habit of screwing over your customers isn’t exactly the route to success, riches and your picture on the cover of Time magazine.

(Slime magazine would be a better fit.)

Wholesale is a business-to-business process. It all happens behind the scenes, away from the eyes of the wider public. That can give some artists and designers the feeling that their stockists aren’t actually proper customers at all.

This is extremely not the case. The retailers you work with will be among the best customers you ever have.

Let’s say you make greetings cards.

If an ordinary Joe buys your work directly from you, he’ll probably spend about £3 in a single transaction. Maybe £9 if he pushes the boat out and buys three cards. And let’s say he loves your work so much that he only ever buys his cards from you. If he buys 20 cards over the course of a year, that adds up to £60.

Now let’s say that Joe sends one of your cards to his mate Steve for his birthday. Joe’s a devoted fan of your work, but it doesn’t do much for Steve. He thinks it’s alright, but it’s not really his kind of thing.

That’s okay though. Everyone’s entitled to their opinion.

Now let’s look at the same situation, but replace Joe with one of your wholesale stockists. Retailers don’t just want one or two cards, we want loads. In a single transaction, we’ll often spend significantly upwards of £100, especially if you specify a minimum order amount.

So across the course of a year, a stockist might spend £1000 on your cards, or even more. We’re talking pretty big numbers here. And let’s think about risk. As we saw, if Steve doesn’t like the card Joe sends him, the consequences aren’t particularly dire.

As long as Steve doesn’t get bladdered at their mutual friend Dave’s wedding and blurt out the awful truth to Joe, leading to a punch-up in the car park, it’s probably going to be okay.

If, however, a stockist spends a whack of money on your cards and their customers don’t like them, the consequences can be severe.

Retailers have to speculate to accumulate, so if your cards don’t sell there’s an immediate problem.
At best, it’s an expensive mistake.

Some shops will be able to absorb the loss and move on. For a business that’s already on a knife-edge, however, buying the wrong products can lead to disaster.

The point is that your stockists are valuable assets.

We spend more with you in each transaction, and more across the course of the year, than your retail customers. We’re pretty loyal too. As long as your stuff keeps selling, and you keep looking after us, we’re likely to stick with you.

When we make an order we’re essentially gambling that our own customers will like your work enough to buy it. Buying stock is always a risk, but if a retailer is willing to place an order, it’s because we can see the value of what you do and are excited about sharing it.

None of this makes us more important than your retail customers, of course, but it’s essential to understand that your stockists are customers too. We’re also your allies and champions. As partners in your success, we deserve your professionalism and respect.

So what is undercutting?

Undercutting happens when an artist or designer sells their work direct to the public for less than their stockists are able to charge. This means they’re selling their product to retailers at a particular wholesale price, but selling the same products through their website, on Etsy, Folksy or at craft fairs for less than double that wholesale price.

Pretend I’m buying your widgets for a wholesale price of £5. The very least I can afford to sell them for in my own shop is £10.

But, hang on. You’re selling the same widgets on Etsy for £6.50.

You, my friend, are an undercutter.

Why do shopkeepers get cheesed off about this?

Well, it’s pretty simple. You’re trying to have your cake and eat it. Undercutters want the large sales and increased exposure that comes with wholesale, but also want to maximise turnover through their own retail channels by offering their work at an artificially low price.

Stockists can’t possibly compete with that. And to be honest, we don’t want to. If it becomes clear that a supplier is undercutting them, most shopkeepers will immediately stop working with them. Undercutting isn’t cool and it isn’t fair. It’s also incredibly unprofessional.

Want to make sure you don’t undercut your stockists? It’s easy. When you sell your work directly to the public, don’t charge less than double your wholesale price.

That’s it.

Does this mean that you might have to increase your Etsy or Folksy prices when you start selling your work to shops?

Yep.

How about the prices on your own website? And the prices you charge at craft fairs. Do they have to go up too?

They sure do. If your current retail prices aren’t at least double your wholesale price, they’ll have to go up when you start selling wholesale.

Some artists find this unsettling.

“Increase my retail prices? But my Etsy sales will totally drop off!”

“I make a large proportion of my income from craft fairs – if my prices go up, my customers will abandon me!”

“People will think I’m a money-grabber!”

These worries are understandable, but they’re based in the idea that what you sell, how you sell it and the people you sell it to are all fixed, eternal things.

But they’re not.

My Give Yourself A Raise class goes into this subject in detail, but let’s take a quick look now.

Your business is an evolving entity. It changes over time. Sure, if you put your retail prices up, a few of your current customers may disappear. That’s okay.

Why?

Well, for one thing, it’s extremely hard to build a thriving business on customers who are that sensitive to price.

I mean, come on.

Do you actually want to offer your stuff to people who look at it and go “£25 for this! Is she kidding? If it was £10 I might consider it, but it’s not worth that much.”

To be perfectly frank, that type of customer can sod off.

They’ll never be loyal to you, will remain stubbornly unimpressed no matter what you do, and will complain vociferously about your product, service, website, packaging and dress sense given the slightest provocation.

In short, they’re nothing but trouble.

The kind of customer you do want says things like “£25 for this! I’d pay ten times as much! Just look at all the work that’s gone into it. Unbelievable. Where’s my credit card?”

For your business to thrive, you need customers who get you.

People who are so in love with your talent, skill and unique point of view that they’ll buy pretty much anything you make, regardless of how much it costs. Customers like that aren’t going to be scared off by small, or even large, price increases. If they want your stuff, they’ll find a way to get it.

They’re tuned into what you do because it’s fulfilling a deep emotional need. Remember those? That makes you literally valuable to them. As long as you keep serving up that value, they’re not going anywhere.

When you’re starting out, it’s easy to feel that the first type of customer is all you’ve got. That’s not the case, though. You’ve got both kinds. Every business has. And do you know the best way to sort the wheat from the chaff?

Put your prices up. Confidently.

The good ones will stick with you, the less good ones will naturally fall away.

You’ll also become visible to a whole new type of customer – the ones for whom your work has been far too inexpensive up to now.

There’s a wider point here, and it’s about being prepared for change. When you start selling your work to shops, the winds of change are going to whistle all the way through your business – maybe even into places you didn’t expect, like your retail pricing.

Make sure you’ve got your thermals on.

How not to get a migraine.

Now let’s explore a little side issue.

As I said, your stockists may decide to multiply your wholesale price by more than 2 – perhaps 2.3, 2.5 or even more. That means that your product may ultimately be available from different stockists for a range of retail prices.

If you’re worrying about this variation, don’t. You don’t have to enforce a single retail price on your stockists. That’s the quick route to a migraine.

Instead, I’d suggest you take the view that once a stockist buys your work, it’s theirs. Whatever retail price they choose to sell it at is up to them.

You can be pretty certain, however, that the retail price they settle on is highly unlikely to be anything less than double your wholesale price. That’s the baseline. In fact, it’s your recommended retail price, or your RRP.

As long as you sell your work directly to the public for nothing less than your RRP, your stockists won’t get cheesed off.

Or en fromage, if you want to get continental about it. Your conscience is clear, your ethics are pure, and you can sleep the sleep of the just.
 
 

Spying for beginners.

Okay. We’re not going to need the services of Mr Calculator in this section, for the moment, at least. Instead, we’re going to rely on Mrs Pencil and Professor Eyeball. It’s time to do some (purposeful) mucking about on the internet!

So here’s what’s going to happen.

I want you to go hunting for your competition.

Not so you can print out their profile pictures and use them to line your guinea pig’s hutch, but to gather some cold, hard facts.

We’re going to go on an intelligence-gathering mission that will help you refine your wholesale price and get a fresh insight into the mind of both your customer and potential stockists. So get a pen and some provisions.

I find a jar of smooth peanut butter and a spoon are useful companions to any kind of internet-based research.

Start off by thinking about your own product. Write down its name, rough retail price and a list of its qualities and features.

If you’re a jeweller, it might look like this:

  • Oak leaf charm bracelet, rough retail price: £90.
  • Handmade.
  • Two sterling silver leaf charms.
  • Waxed cotton braid with adjustable knots.
  • Option to personalise with two initials per leaf.
  • Packaged in tissue paper with custom sticker.

As you can see, we’re going for a cold and unemotional description here. Think Data from Star Trek. Or the scary replicant from Blade Runner. Or the Terminator.

Don’t get tied up in this. Write down as many details about your work as you can, then move on. Here are a few to get you started.

My product’s name:
Rough retail price:
Materials used:
Qualities + features include:

Scoping out your competition.

You’re probably already aware of a few artists and designers who make your kind of lovely thing. Next, go look at their websites. If you’re on Etsy, Folksy or any other handmade marketplace, do a search for your specific type of item.

Then move on to the wider world. Pick a couple of major high street retailers and find out if they stock something similar to your product. Look at some independent shops too, and online-only retailers.

Aim to collect information on at least twenty similar products.

What we want to know is:

  • Who else is selling your type of lovely thing?
  • What’s their retail price?
  • Where is it being sold?
  • What are this item’s qualities and features?
  • What kind of materials is it made from?
  • Does it come gift-wrapped?
  • Can it be personalised?
  • Is the design intricate or simple?
  • Is it eco-friendly?
  • Is it cruelty-free?
  • Is it hand-made or mass-produced?
  • Is there a choice of colours?
  • Is there a choice of sizes?

You get the picture.

Next, we’re interested in:

How does it compare to your product? A simple plus or minus sign is all we need here. If the item you’re looking at has more qualities and features than your own, give it a plus. If it has fewer, put a minus.

This is going to be subjective, but try to think like a customer and be as honest as you can.

What’s the standard postage cost for delivery in your country? This tells us a couple of things, such as how heavy, how fragile and how urgently customers might need your kind of product.

Okay.

Before you get started, I want to tell you something important.

There’s no judgement here. I’m not judging you, and I don’t want you to get all Judge Judy on yourself either.

I’m not asking you to decide whether your competitors’ products are better or worse than your own.

We’re just trying to get a feel for where they fit into the spectrum of oak leaf charm bracelets, baby blankets or tote bags which are available in the world.

And if this exercise makes you feel a bit rubbish, that’s okay. Working out where we fit in among our peers isn’t renowned as a delightful experience.

It’s a bit like that moment when you’ve smoothed warm wax onto your shin and now there’s nothing left to do but rip it off. You either have to get on with it or go through life with your trousers, bits of furniture and hapless bees stuck to your leg.

I think you can do this, even if it stings a little.

Ready to test that theory?

Analysing your results

When you’ve completed your spy-a-thon information gathering process, it’s time to draw some conclusions.

The main thing we want to know is your whether your tentative retail price is in generally the right place. We can tell this by looking at the range of retail prices you wrote down for similar products and noticing where your price fits in.

If your retail price is at the lower end of the range some explanations could be:

  • You’ve created a no-frills version of this item
  • You use less expensive materials than other producers.
  • Your design is less intricate, or it takes less time to make.
  • Your wholesale price is off.

If it’s the latter, it could be that you’re not paying yourself enough for your time and labour, you haven’t accounted for all your direct costs and overheads per item or you haven’t built in enough profit.

A lower-end retail price is theoretically good news because it means retailers can make a significant margin on your product, and you can too when you sell it direct to the public.

Nine times out of ten, however, a retail price that’s significantly lower than the competition will be the result of a mistake or an omission when you were calculating your wholesale price.

Take a spin through the numbers again and check you haven’t skipped anything.

If you’re certain your wholesale price, and by extension your retail price, is solid, decide whether you can bump up your hourly rate or profit figure.

Remember the first rule of Indie Retail Academy. Even if you feel you’re being fair to yourself and your business, perhaps you could stand to be a nadge more generous.

If your retail price is at the very high end of the range, investigate why. Maybe it’s because:

  • You make the premium version of this item.
  • Extra stuff comes with your product, like high-end gift wrapping or personalisation.
  • It takes you a long time to make each product.
  • Your wholesale price is off.

In the last instance, perhaps you’re paying too much for your raw materials, your overheads are astronomical or your profit figure is unrealistic.

A retail price at the high end of the range is by no means a bad thing – most handmade products are. And if your product is truly premium, if it scintillates with luxury and is the apogee of craftsmanship, there are customers and stockists out there who’ll want to buy it.

You do have a problem, however, if your item is lovely, desirable and appeals to a customer on a median income, but comes with a retail price that only Russian oligarchs could afford.

If this is you, hit your calculator again. Not literally.

Go back through your receipts and see if there’s any way to reduce your direct costs.

Maybe you can buy your raw materials in bulk or find a single supplier so you don’t have to pay more than once for shipping. If it’s your overheads that are causing the problem, shop around for better deals. Switch your broadband supplier, find a less expensive packaging solution or start walking to your studio instead of taking the bus.

Once you’ve exhausted those avenues, look at your hourly rate and profit figure. We might be living in a time of austerity, but don’t immediately jump to making savage cuts unless they’re warranted.

If you had one too many espressos, however, and set your hourly rate at a figure that would make a lawyer blush, by all means scale it back. The same goes for your profit.

But if your hourly rate and profit figure are justified and sustainable at this stage in your business, leave them alone. Reduce your costs in other ways.

If push comes to shove, scrap your current product and design a new one that allows you to make what you need to make, and more.

You certainly wouldn’t be the first artist to go back to the drawing board, and painful though it may be, you might be glad you did.

Thinking like an entrepreneur.

You have done SO WELL. Look at all the stuff you now know about your product, your pricing and the marketplace you’re operating in.

Let’s pull it all together.

You know how wholesale works.

You know what retailers are looking for.

You know who your ideal customer is.

You know what problems your product solves for your ideal customer.

You know how to make your product wave hello to that customer.

You know your wholesale price.

You know your basic (or recommended) retail price.

You know where this price places you in relation to your competitors.

You know how to think like a buyer.

And I’m ridiculously proud of you.

If there are adjustments and refinements to be made, go ahead and make them. You know what to do.

The point of all this research is to position your product in the marketplace with confidence. You’re doing it in a considered, thought-about way, rather than just conjuring up a price and hoping for the best.

Two last things to keep in mind:

How do you want to be perceived by your ideal customer?

And…

What value would your ideal customer place on this item?

For any particular product, high-end prices are usually associated with the finest craftsmanship, luxury and the best possible quality. Items at the lower end of the range are seen as the no-frills, basic or budget options.

Where do you want to position yourself on this scale? Where are you most visible to your ideal customer?

Remember you’re not your customer.

If your work meets the high standards you’ve set yourself and fills your customer’s deep emotional needs, you don’t have to feel weird about asking them to pay for it – even if that price feels high to you.

As long as you’ve done your homework, you can be sure that your ideal customer thinks you’re worth it.

Sale Or Return.

We’re going to wrap up in a sec, but before we do let’s have a quick chat about a particular payment arrangement. You’re likely to come across it at some point, especially in when you’re just starting out.

Sale or return, or consignment, is the practice of loaning your work to a stockist.

No money changes hands at the time of the loan. If your items sell, you get a percentage of the retail price – usually a split of around 50/50 or 60/40 in your favour.

I’m certain you spotted the fatal flaw in that sentence. It’s the word IF.

There’s no guarantee your work will sell. If it doesn’t, you get nothing. When things do sell, you only get paid for those items. So it’s perfectly possible to hand over stock worth £100 and only get £20 of it back at the end of the month.

Or at the end of three months. Or six. Other potential problems include:

  • Your items being stolen.
  • The shopkeeper forgetting to pay you, or paying late.
  • The shop going bust when they owe you money.
  • The shop going bust and not giving your stuff back.
  • Your items getting damaged while on display.

The problem with sale or return is that all the risk stays with you. You’re taking it on trust that your goods will sell and that the shopkeeper will deal with you fairly. The retailer is in the sweet position of getting stock to sell with no initial outlay and, potentially, a large measure of control over when and how they pay you.

Sale or return is great for shopkeepers.

It’s generally not so great for you.

The attraction for artists is the idea of getting your foot in the door. At least your work will have the opportunity to sell, and if it does it could be the start of a mutually beneficial relationship with the retailer.

That’s fair enough.

To be clear, I’m not saying that sale or return is bad. We work that way with some suppliers for our own shop. In some cases, like high-end galleries specialising in fine art or photography, sale or return is standard practice.

But for many artists, having work scattered all over the place and not knowing if or when you’ll get paid is less than ideal.

To balance this out, most people rely on a sale or return agreement. This is a document which sets out the conditions under which you’re offering your work and lists:

  • The items, their quantities, descriptions and selling price.
  • How long you’ve agreed to supply the goods for.
  • Who’s responsible for insuring the goods.
  • What happens if your items are stolen or damaged.
  • How, when and how much you want to be paid for each item.
  • A statement of ownership, which says the goods remain yours until you’re paid for them.

Regardless of how scrupulous your consignment agreement is or how trust-worthy your stockists, that’s a lot of caveats and small print. It’s also a lot of waiting and hoping that your stuff sells and that nothing goes wrong.

So let me ask you this:

Wouldn’t it be better if you just got paid upfront?

This way of doing things is simply called wholesale. If the retailer wants to stock your work, they either pay for it before it leaves your sight, or within an agreed time frame of your choosing – usually 30 days after delivery.

Doesn’t that sound pretty good?

Compared to sale or return, wholesale is clean and simple. If you set a decent minimum order, you’ll get paid in big blocks of cash rather than dribs and drabs as things sell.

And once you’ve waved it off at the post office, you can strike each order from your to-do list. There’s no checking in to see if your stuff has sold. That’s not your problem – it’s the shopkeeper’s.

Only offering wholesale can also be a statement of confidence and strength. You’re saying your stuff is worth the investment.

But now it’s time for some caveats and addendums of my own.

It’s a horses for courses situation, and sale or return might work very well for you, particularly if your items have a high selling price and stocking one or two would involve a very large outlay for the retailer, or if you’re in an early, fact-finding stage.

If you’re not sure if you’ve got a business or a hobby, sale or return might allow you to dip your toe in the water and get some valuable feedback.

Bottom line, though?

If you have sale or return stockists and nothing much is happening, it might be time for a re-think.

Your next steps.

Well, we’re here.

We’re standing outside the door of your wholesale business. There’s lots more to talk about once we’re on the other side.

Things like how to actually approach retailers about stocking your stuff.

Working out your terms and conditions.

Designing a catalogue.

Receiving your first order.

Going “OMG!” and running round your office.

Phoning your Mum. Treating yourself to a celebratory scotch egg.

But all that’s on the other side of the door, or at least it could be. First we need to decide whether you’re ready to turn the handle.

Here’s one of my favourite bits of business advice.

Ask yourself what your business looks like when it’s finished.

What do you want, exactly? Describe it. Get a big bit of paper and write it all down. Tell me exactly what your business looks like when it’s complete.

What do you do all day? How much money are you making? Who are you serving? What kind of lovely thing are you creating?

Then work backwards. How do you get from here to there? How long do you want it to take? Is wholesale the way to do it?

I know you’ll make the right decision.

So what now? I hope this guide has given you the clarity and the motivation to forge ahead, whichever route you choose. Now it’s simply a case of, you know, DOING IT.

To help with that, you might like to take a look at What Retailers Want, my best-selling training in selling your work to shops.

What Retailers Want picks up where this guide leaves off. It guides you through the entire process of selling your work to shops, step by step.

For now, though, it’s good bye from me. This is big stuff you’re doing here, so take care of yourself, okay?

I’m off for a mojito and three episodes of Elementary.

Clare Yuille Bio Picture
THIS ARTICLE WAS WRITTEN BY

Clare Yuille

I help creative people like you sell their work to independent retailers, without hyperventilating into a sandwich bag. I take the EEEEK! out of wholesale and replace it with AAAAH, right up until you're making the kind of money you want to make.

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