Lori’s Shoes– Lincoln Park, Chicago
The most popular question I get about business is how to get in stores. Which makes sense. Wholesale (selling to stores) is a great option to increase revenue and expand your company.
Some brands like BB Dakota choose to sell to stores only. Other lines like Tory Burch and Mark Jacobs do a mixture of both retail (selling to customers) and wholesale. When starting out like I did (with a bag of $5 seed beads and crappy wire), a mix of wholesale and retail is often the most practical. Below I have laid out three basic phases for expanding into wholesale and tips on how to see a jump in sales at each level. The advice is based off of my personal experience in the fashion and accessory industry and through selling to over 150 stores in the past 9 years. For those in the gift category selling stationary, candles, and thinga-ma-bobs, the same principals apply but there may be some industry variation.
Oliver + Lilly’s – Vancouver, Canada
Phase One: Operation Get in a Store
Phase One businesses are generally new designers just starting to consider to seriously sell their work. A Phase One designer may sell on Etsy or to family and friends.
Often, the easiest way to get into a store is to try a small, local boutique with an owner who also serves as the store buyer. When visiting the store, starting a friendly conversation with the owner about the cool store selection can go a long way. Then, mentioning that you are a local designer with wicked duds can come up naturally – be sure to wear or bring samples of you work. If the owner is interested, she will usually ask about your retail and wholesale prices (note: have retail and wholesale prices!) and what stores carry your line. If you say you got nada stores and she still likes your designs, 92.3% of the time she will say, “Do you do consignment?”
This is where you give the store your awesome thinga-ma-bobs and they try to sell them. You only get paid when pieces sell, and you get 50% of the price. Pieces that don’t sell eventually get returned to you.Â Store buyers like this because they don’t have any loss if your pieces don’t sell. You like this because you are in your first store(!!).
Repeat this process at other stores and be sure to ask the stores how customers respond to your work – they have lots of experience and can give you ways to improve. Does your packaging suck? Are your neck warmers too itchy? Are your prices too high? Be patient with consignment, things may not sell automatically. But if things dry up over the course of a few months be ready to pull the plug and take your merchandise back. Or swap in newer, improved items.
Phase One Bump-Up Tip:
If your thinga-ma-bobs are selling faster than beers at a Cubs game, ask the store owner for referrals. Store owners have other store owner friends that may want to carry your line. And the easiest thing in the world is to approach store #2 saying, “Shirley has been selling my line like crazy and she thinks it might be a good fit for your store too.”
Phase Two: Operation Get Wholesale Accounts
Phase Two businesses have successfully sold consignment pieces in several stores. Generally Phase Two peeps have sold in about six stores and are antsy to get out of consignment.
I would wait 6 to 12 months or until I was selling more than five items a week at the store before bringing up the wholesale option. At that point the buyer knows you and knows that your products rock. If the buyer loves your work and is ready to increase their margin, they will generally be open to wholesale.
The buyer places an order for the store, you make them the goods, and they pay. Stores like this because they can sell the product for any price they want. You like this because you get paid right away and don’t need to keep track of inventory at the store.
Phase Two companies are still likely to hear the consignment question from new stores who are still wary of taking the leap on a small fish like you. My favorite line for this situation is “Since my work is carried in x other stores via wholesale, I can do six pieces on consignment for the first month as a test run so you can get to know the pieces.” 8.2 times out of 10 the buyer ends up buying the goods wholesale after this statement.
At this point you probably already have a line list (more on this in a future post) with your style numbers, wholesale prices and so forth. Go forth with your popular whatcha-ma-call-its and get in as many stores as you can. But remember to be honest and tell store owners what other boutiques also carry your pieces. If the stores are in the same area they can get pretty territorial about exclusivity. You might sell to both of them the first time around, but don’t expect any re-orders.
Phase Two Bump-Up Tip:
Start expanding outside your area! Ask current stores for store leads out of state, look online, or call friends in other cities for recommendations. Then send those leads a line list or a sample (if possible) and give ’em a call a week later. They will usually remember the hot pink box that arrived last Wednesday with the cute gotta-have-its.
Heavenly Metal – Ann Arbor, Michign
Phase Three: Operation Sales Reps
Phase Three designers are often full-time or almost there. Some designers go on the road with their samples on extended sales trips making new contacts and opening new store accounts themselves. This is slow, travel intense, and very hands on. Other designers at this point (like me) choose to hire commissioned sales reps to sell their work for them on the road or in fancy showrooms.
The first thing I can say about this phase is that if the thought “I will hire my good friend’s hairdresser’s cousin to rep for me, she needs some work and is really excited about my products” you are not alone. Almost all newbies think this (like I did). Unless that hairdresser’s cousin has successfully repped for another line or has experience this is a bad idea. Abort the thought and immediately distract yourself, eat a cupcake if you have to. Just don’t hire a friend or inexperienced rep.
So how do you find a good, reputable rep to get you on the fast track to dozens of stores? This tip is worth it’s weight in 24k gold: Ask your best store who should rep your line. There are three reasons this is golden:
- The store’s customers love your stuff – most likely the store’s favorite rep has relationships with other stores catering to similar shoppers.
- Connecting with the rep by opening with the line, “Suzie, at Boutique X, has recommended you as a great rep to work with” is guaranteed to be taken seriously. If the rep is worth their salt they will take a look at what you make just so they don’t insult Suzie and because they think Suzie is awesome.
- Once the rep likes your work she will most likely call Suzie to ask for her opinion in terms of sales, quality, and reliability. Suzie is your #1 fan, of course she will give the most glowing report you can get.
Hopefully this snags you a great rep. Then it is up to you to negotiate a commission, showroom fees (if any), and make them a sample product line. This is an investment and it can get expensive, but the payoff can be great if you find the right representation.
Phase Three Bump-Up Tip:
Just like in Phase Two, to get more stores you need sales reps in more territories. And just like in Phase Two, sales reps have other sales rep friends across the country. Ask your rep (once they successfully sell your line) for recommendations.