Should you create special offers and promotions for your wholesale buyers?
Sales, free shipping (aside from your regular carriage paid level,) maybe free items when a store spends over a certain amount – should you be offering that stuff to your stockists?
You’d be giving away something of value, either in the form of money or goods, so what’s the upside for you?
Let me give you three reasons why promotions can be great for your business, then some warnings about what can happen if you rely on them too much.
#1 – Money when you want it
First, special offers and promotions can increase the number of wholesale orders you receive, and therefore the amount of money you make, right when you need that to happen.
They’re a way of influencing when your stores buy your work and how much they spend when they do. Those two variables are directly connected to how profitable your business is.
You can never have absolute control over them, but offers and promotions give you leverage. Instead of a retailer buying at some nebulous point in the future, you can use an offer to make it more likely that they buy today.
#2 – They’re easy and fast
Secondly, offers are pretty easy to implement. They need to be planned and set up carefully but once you’re clear on the details, getting from idea to execution can be speedy.
If you’re having a slow month, for example, you can pull together an offer in an afternoon, send it out to your stockists and see if you can get some traction by dinner time.
#3 – Retailers love them
If you use them wisely, offers get retailers excited about you and your work all over again.
Running a shop is an expensive way to make a living, so when you give us the chance to pay a little less or get a little more, it’s no wonder our ears perk up.
And if you run them clearly and consistently, offers and promotions help to make us loyal to you. We notice you’re trying to lighten the load for us every now and then. That makes us feel understood and trains us to pay attention to you on an on-going basis.
But what are the downsides?
Special offers and promotions obviously eat into your profit margin.
When you run a sale, for example, you’re giving a little money away to (hopefully) get a lot more back, at a time of your choosing.
That’s great in principle, but you still have to say goodbye to that small amount of potential income (in the form of a discount or free items) without it hurting too much. If your margins are very narrow that might be difficult, so you need to be certain that any offer you’re considering is sustainable.
You can’t be sure how many of your stores will take advantage of your offer, so you have to think it through and know that whatever happens, you’re good.
If that’s not the case, I’d recommend putting offers on the back burner until you’re more financially secure. Concentrate on doing an outstanding job for your stockists in every other respect and come back to offers when you’re ready.
Here’s another potential pitfall:
Promotions can damage your brand.
When you make a product available and give it a price, you’re telling the world that it’s worth that amount of money. You’re stating that the retail price is a fair reflection of the value your product provides.
If you’re always discounting that price, you undermine the statement.
People who buy at the full price can end up feeling like suckers and you can look kind of shady.
Frequent sales teach stores to buy on price. If you always have an offer on, you’re training retailers to have a transactional relationship with you.
Instead of getting in the habit of acting on your sales messages, they get in the habit of ignoring them because in a couple of days, maybe you’ll offer an even bigger discount.
In other words, you’re teaching your retailers to be price-sensitive. Running a lot of promotions encourages them to see price as the most important criteria in the decision to buy, rather than your craftsmanship, the high-quality materials or clever design.
Buyers therefore stop believing and trusting in your full wholesale price as a “makes sense” reflection of value and simply look for the lowest possible price for this type of item.
And if you can’t offer it, they’ll find another supplier who can.
All of these troubles can be avoided by using sales and promotions thoughtfully. Be creative with your offers, switch between different types and space them out across the year.
Don’t be afraid to use them, though. Special offers can do you a whole lot of good.
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