There are a few key points to guide you into successful wholesaling. Visit a few local potential wholesale accounts first and see if you can envision your soap on their shelves. Call ahead and arrange a time to meet with the store buyer. Be gracious and understand that oftentimes these storeowners work long, hard hours and deal with many people on a daily basis trying to sell them something. Don’t drop in on a storeowner unannounced and expect them to meet with you.
Many storeowners like to be the only shop in town to sell your products. It makes sense to pick one retail outlet instead of spreading your sales all over town in multiple locations. In most cases, the latter won't result in more sales.
Understand wholesale pricing (half of retail) and terms of payment (Net 30, COD and Prepaid). Then design and print out copies to hand out to potentially interested parties. Information on wholesaling should include minimum opening order (the minimum amount a retailer must spend to write an order with you). Currently my minimum is $300. Also, consider that you’ll want retailers to carry a good selection of your products otherwise they will become “lost” in the store. For me, a $300 minimum assures the storeowner that my line will have a strong and visible presence and will have a better chance of being sold. It's sort of like selling good real estate space. You want to take up a nice little portion of their store. Good retailers understand this concept. Set your wholesale opening order for at least $100.
Your wholesale sell sheet should include quality pictures of your products, with wholesale pricing next to each one. Each of your products should also have a minimum order. Most companies sell in dozens. This is a good idea for several reasons. What you don’t want is stores ordering two lemongrass soaps, three lavender, and so on. This is a time killer and you’ll be spinning your wheels for the desperate act of selling a few bars. Raise your minimums and you’ll raise your bottom line!
Retailers will probably ask you about your bestsellers. You may want to make it easy for them and have a couple of Bestseller Packages at various price points. I have Bestseller Packages at $300, $750 and $1000. They might ask if you are willing to private label. This has its advantages and disadvantages that we can talk about in another post.
Also, prepare a professional "shelf talker" that has a picture of you on it. Consumers don't read much when they shop, so keep your company short and sweet and to the point. I've seen this make a huge impact on sales.
Lastly (although I could keep going!), do not put your website or phone number on your labels. Store owners want the repeat orders to come back through them.
I know there's a lot more to it, but hopefully this is a good start. Let me know if you have any other questions.
In addition to an opening order minimum, you'll need a reorder minimum. If you're selling bars of soap exclusively, then you might want to have a $50 reorder minimum. This way the retailer can restock if they sell out quickly of one scent/variety.
On your terms and conditions sheet also list a return policy. Many wholesalers require a restocking fee for returns, or a percentage just to make it worth their time. Also, consider if you want to offer exchanges instead of returns. This is entirely up to you, but best to have in writing and make sure the store owner gets a copy. Of course you can make exceptions depending on what circumstances may arise. But something to think about.
I have had a store or two approach me on carrying my products in thier shops. Do you need to have a contract agreement with the store for wholesale? These are smaller stores and I am just starting out so I think I am playing it fast and lose, but I hope to grow the wholesale business so it would be great to know how to set it up right from the begining. Thanks so much for sharring by the way!
It's not necessary to have a contract agreement. You'll want to have an opening order minimum and product minimums (see my post above in this thread).
The point to remember about wholesale (since the margins are half that of retail) is that you have to sell in volume to make substantial income.
I would really love to get a wholesale account some day.
I have my list ready and have sent it off but it didn't make it. It was for candles.
She said, that I need UPC labels. Do you use those also? I know some stores use there own.
But its been a while since I tried it again.
I buy my barcodes from www.buyabarcode.com. I find them to be very reasonably priced and you can order in smaller quantities. Usually larger stores, especially store chains, require them.
There is a lot that goes into successful wholesaling - from having a professional sell sheet, terms, opening minimum, product minimums, return policies, shipping rates and so on. Retailers have incredible "radar" - they can sense if you are new at it or not.
Take a trip to a local wholesale trade show and see how other vendors are wholesaling. Immerse yourself in it. Stick to your guns and don't change your line for your one retailers (suggestions are one thing, but some retailers want to shape your line entirely).
If there's enough interest, I'm going to offer an online class on How to Wholesale Your Bath & Body Products.