Before moving onto the 4th week of my "Launching Your Business" Series...I need to announce a couple of winners! (Click here to learn more about "Launching Your Business").
The winner of the Valentine Treat Toppers from Knapp Scraps is #35 Jessica!
The winner of the Love My Baby Necklace from Love My Baby Jewelry is #6 Lisa w/ Human Touch Designs!
Congrats to the winners!
Click here to hop on over to The Downs Gang Blog to win a Gift Certificate to The Gift Closet!
Today I want to talk a little about different methods for selling your "wares".
With the Bath & Body company I owned a few years ago, I pursued all types of venues.
A friend and mentor in the business once told me that your wholesale orders will pay the cost of running your business, and your retail orders are what will bring most of your profit. I found that to be very true!
In trying to determine whether or not you will be able to wholesale, you will need to have first come up with your cost...in other words, what it takes for you to actually make the product. (Click here for the "Pricing Your Product" post).
In order to garner a decent profit, you usually need to be able to at least double your cost when selling it. For example, let's just say it costs you $1 to make your product. You could wholesale it for $2 or more. But the kicker is...the owner that is purchasing your product at your wholesale price, needs to be able to then double that price so they can make a profit. So, if they pay you $2 for it, they need to be able to sell it for $4. Make sense? If you don't think they will be able to in turn double your wholesale price, and not have it be sky-high, then wholesale may not be for you.
How do you find wholesale accounts? Well, it's takes lots of time, energy, and money! I personally, started by going to local businesses. Usually your local community will be the most willing to help you get started, especially the local smaller stores. The bigger chains are going to be harder to break into, cuz you'll have to go to corporate to contact a buyer. I also was able to garner wholesale accounts through local media. I'll talk more about how to break into local media later, as well as cold calling & contacting businesses.
I had wholesale accounts in 13 states when I sold my company. A quick way to garner wholesale accounts is to go to market in Atlanta, Dallas, or your closest one. Last I checked it cost about $2,000 to go, but I don't know what it would cost now. That decision would depend on how much you are willing to invest in your company. I, personally, was not willing to invest that much time away from home and money.
Retail sales are probably what most of you are used to. Selling your product on your website, etsy, at local shows, etc.
Local Craft Shows:Again, this is something I started locally. I searched newspapers for local art, craft, hand-made shows, etc. I tried to participate in as many as I could afford. Again, this was something I would re-evaluate after several shows to see if it was profitable enough considering the time I was putting into it. A lot of times you will need tables, tents, chairs, etc.
Home Shows:I also tried doing some home shows. You know, sort of like Mary Kay, etc. A friend hosted a party, I came up with a "Hostess Benefit" plan, tried to book other parties, etc. I sold a lot at the party itself, but never really went too far with booking more.
Schools: If you know someone at a school that might be a good contact to have! I would come in after school was out, set up in the breakroom, and sell products there as well. I would try to have a show at a school maybe twice a year.
Word-Of-Mouth: Studies have proven over & over that word-of-mouth, is by far, the most effective way to market & sell your product. People are going to listen to what their friends recommend. So come up with creative ways to spread the word about your product and be sure to thank those who are sending customers your way!
Internet/Website: I could write all day on the endless opportunities and sites there are to sell your product on. I would recommend trying any and everything you can think of, to see what works for you. Especially with the current economy! I am big on re-evaluating things I am doing to see if they are profitable or not. You can get affordable websites, and *blogs* ;) are a great way to sell your product, and not have to spend loads of money on a fancy website. Of course there is etsy, ebay, and other sites available to sell your wares!
Hiring a Sales Rep: I actually had customers approach me who loved the product so much, they wanted to sell it for me. That was good....but you have to be very careful with this. At 1 point I had about 5-6 reps in other states. That can be very difficult, because not only do you have to be able to make money, but they have to be able to make money, if they are "wholesaling" it, their buyers have to be able to make money as well. You really have to have a high-end product, with a large profit margin. I set up training manuals for them, and paid them commissions, based on their sales. I also would wholesale it to them, but they had to have a tax id# & purchase a certain amount of product. I did run into people just wanting to know my profits, my suppliers, etc. That is not something you want to entrust to anyone, unfortunately. So, while this can be a great way to broaden your business nationally, it can be stressful and you really need a mentor or advisor for this type of selling.
Well, I don't want to get too "wordy" today, so I'll wrap it up for now! Thanks for reading & commenting & for sending questions my way.....keep 'em comin' & best wishes for a profitable week!
Got a Business-Related Question? Email me at heatherldt at bellsouth dot net. ;)