I have been inspired to write this article simply because I get a lot of emails daily from artists who wish to sell on my site that I have noticed are struggling with where to begin when it comes to pricing and wholesale.
What is wholesale? It’s when an artist sells at a discounted rate in larger quanties to larger shops.
I’m not talking about people who are hired to mass-produce items, but artists who would like to expand their business and at the same time still want to respect the small business world.
*The artist quotes in this article are based on actual emails I’ve gotten from artists.
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Pricing work appropriately for selling wholesale
“I can’t sell my items at wholesale pricing because then it’s not enough money to be worth my while!”
-Artist who doesn’t price their items appropriately
In order for retail shops to be able to sell your merchandise, they need to be able to at least double your wholesale price (many stores do 3 times in order to be able to afford overhead; ads, rent, photography, design needs, staff, etc). You must think of wholesale pricing as the amount you need to make in order to sell your items in bulk. If you can’t afford to sell your $15 tee at $7.50 to a reseller, it looks like you need to raise your prices! If that means your retail tee is now $24 so that you can get $10-12 per tee, then it’s just icing on the cake if you do happen to sell one at full price on your own!
A $15 tee is great at Wal-mart (blech) but this is the INDIE world! Don’t compete with the low-end market–it’s not worth it. You need to value your time and your talent.
Also remember, once you set a wholesale price, you must sell to all of your customers at that price (regardless if they double or even triple your pricing). You must also respect your customers by pricing the items you sell on your site at the same retail pricepoint. Meaning, if you wholesale at $25, you should sell your item for $50 or more on your site and all of your competitors will sell for the same OR more depending on their ratio. Your wholesalers will be turned off by having to compete with your personal pricing or the pricing of other shops selling the same things for less.
“These earrings only cost me $5 to make so that’s what I’m going to sell them for”
-Artist undervaluing themselves
The most common thing I’ve noticed is how often artists undervalue themselves when they price their items! This means that when they are asked to wholesale (sell at a lower rate to larger stores enabling them to fill more lucrative orders and receive the money upfront) they have to cut their prices so low that it becomes a loss to them to sell wholesale.
Remember, you MUST account for your time, talent and creativity as well as materials! So, if it takes you an hour to make your product, figure out your hourly rate and add that to the price! That number is your wholesale price, NOT your retail price.
Why Wholesaling is great for business
“I can make more selling a necklace at full price than I could wholesaling”
-Artist undervaluing their potential
That’s true if you look at a single sale, but not if you look at the big picture. Wholesale is generally the way to make a REAL living as an artist. Sure, one can sell on auction portals but their items are set equal to everyone else forcing artists to set lower prices to compete. Also, it’s very hard to have quality control on sites like that, and therefore it’s hard to set oneself apart. A $300 dollar item will sit right next to a $3 item! Overall, the prices are too low (believe me, I wholesale from artists who sell on those sites and sometimes I’m blown away at how low some of the pricing is!)
An artist can also sell on their own sites (and they normally do) but there is a limited audience and a limited amount of revenue that can be put back into advertising. As an individual, it’s rare to have the same exposure selling alone as it is when one is selling on a large site that has a budget for quality advertisements and a larger selection of items with the same feel and quality as yours.
Another great thing about wholesaling is that an artist ends up having a network of loyal retailers who feel just as great about their products as the artist does. They no longer have to ship one item at a time but 10-200 items at once, saving time and resources.
Once an artist has a group of loyal customers and has set the prices of their pieces appropriately, they will find that though the prices may be lower per item, they will make a LOT more money due to quantity and repeat buys than they would selling piece-meal.
Staying happy when wholesale orders pour in
“I just have so many wholesale orders, I’m overwhelmed and can’t take anymore!”
That actually sounds great! Looks like YOU have the upper hand, eh?
1. Raise your retail/wholesale prices a tad– apparently you aren’t pricing well enough to accomodate your time! Let those low-end buyers go. The indie shopper is one who values your talent and wants to support you!
2. Time to hire someone! You can fill more orders just by hiring someone or finding an intern to help you out with little things– cutting patterns, shipping orders, even helping you knit! You are STILL INDIE if you have a helper! It’s hard to grow a company alone:-)
3. When under pressure, ask for more time! Seriously, people who wholesale indie items are usually pretty lenient about timelines. If time is needed to take a break, most retailers will be more than responsive! They’d rather have their items than have their fabulous artist quit!
In conclusion, an artist can make the wholesale “machine” work for them if they:
1. Price their work appropriately
2. Raise their retail prices to work together with their wholesale pricing structure
3. Gain a group of wholesalers as opposed to concentrating on single sales
4. Prevent getting overwhelmed by modifying their production plan
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