Ep. 193 How to Decide If It’s Time to Start Wholesaling in Your Product-Based Business With Katie Hunt

Plus, Four Common Wholesale Mistakes

Many of the store owners inside Master Shopkeepers and the Savvy Shopkeeper community at large are also creatives, makers, and artists. After establishing their stores, the next question those makers ask is, “When should I wholesale in my business?”

In today’s episode, you’ll learn how to decide if it’s time to start wholesaling in your business from the founder of Proof to Product, Katie Hunt. We cover the basics of starting as a wholesaler, the outreach marketing strategy all successful makers use, and the thoughtful touchpoints needed on your customer journey.

Katie also shares the four most common mistakes brands make when expanding into wholesaling, along with her advice for store owners who want to build strong relationships with their wholesale partners.

Whether you’ve always dreamed of designing a product line for your store, are already wholesaling your products to other retailers, or are just curious to know more about the other side of indie retail, read on for Katie’s expert insights.

Why Creative Store Owners Should Consider Wholesaling

Many brick and mortar store owners are creatives at heart. Some even started their retail businesses as an outlet for their artistic pursuits. But after they’ve designed and created product lines, answering the question, “When should I wholesale in my business?” can be difficult.

Shop owners with their own product lines should consider if they want to increase both…

the revenue that comes from selling their products
the visibility of their brand

If they’re excited about increasing that revenue stream and becoming more well-known, then wholesaling in your business is the next step.

How to Prepare Yourself for the Wholesale Market

Once store owners/makers are confident they want to expand into wholesaling, there are several steps they can take to prepare themselves.

Ensure Your Product Line is Truly Ready for Wholesale

Indie retail store owners have already experienced the buyer side of wholesale retail. Your insight and experience as a buyer should guide you as you prep your product line!

Think of the brands you gravitate towards when placing wholesale orders. Your favorite wholesale brands are probably…

Priced appropriately compared to similar products
Maintaining consistent stocking levels
Releasing new products on a regular basis, and often in conjunction with the industry-standard buying seasons

You need to do the same for your product lines in order to succeed as a wholesaler. Ideally, you’ll release new product lines 2-3 times a year with at least 12 SKUs in each line.

Establish Your Terms and Conditions for Wholesale Orders in Your Business

Consider what shop owners need to know about your brand and products before placing an order.

For example, retail store owners must know the minimum order quantity (MOQ) for each product. That number helps them figure out how much to order, what they’ll price your products at, and if bringing in your products is financially feasible.

Having a catalog or line sheet is your best bet for sharing critical information about your products with store owners. Katie teaches wholesalers how to create a functional catalog that store owners can purchase from directly inside her flagship program, Paper Camp.

Create a Wholesale Outreach/Marketing Plan

Now that you’ve got your products prepped and your sales tools in place, you’re ready to accept wholesale orders!

But those orders won’t just fall from the sky—you’ve got to market your products to store owners and build those relationships.

There are multiple ways to do this, such as researching potential store partnerships, connecting with retailers via email or social media, and building an email list of interested buyers.

Finding the right mix of touch points for your brand might take time, but it’s part of the wholesaling process.

Leverage Trade Shows for More Visibility and Sales

Trade shows can be quite an investment for newer wholesalers, but they’re an incredible way to get in front of potential buyers.

While sales are the main goal of attending a trade show, there are also many qualitative benefits of being there in person. From the connections you make to the feedback you get, trade shows can be hugely beneficial to wholesalers who are a little further along.

Crafting a Seamless Customer Journey for Your Wholesale Brand

As a store owner, you already have valuable insight into the customer side of wholesale purchasing.

Going back and forth over many emails to get your questions answered with a wholesaler is incredibly frustrating. It can even lead to you deciding not to buy from them again or at all!

That’s why you need to make it as simple as possible for store owners to place wholesale orders with you. Having a comprehensive catalog comes in handy here, as well as having a singular platform or link to direct them to for placing their orders.

A Note On Using Faire For Wholesalers and Store Owners Alike

One of the easiest and most common ways to offer wholesale orders is through the sales platform Faire. Faire isn’t perfect and can be a touchy subject for store owners, wholesale brands, and manufacturers. But it is still a useful tool we can leverage.

Faire makes it easy for brick and mortar store owners to order from wholesale brands. It also offers extended terms and returns, which wholesale makers don’t commonly offer.

If you’re a retail store owner, be sure to order through the direct link that wholesalers send you after connecting at a trade show or reaching out via email. By doing so, the wholesale maker won’t have to pay a commission to Faire on your order.

And if you’d prefer not to order via Faire, you can always ask the wholesaler how to place an order directly with them.

The Simplest Outreach and Marketing Tool for Wholesalers

When marketing your wholesale brand, never underestimate the power of a valuable and informative email.

Your outreach emails should be clear, concise, and provide all the information a buyer might need to place an order. Cutting down on the usual back and forth will make your life and your buyers’ lives much easier.

You might be afraid to sound salesy or bother people. But if someone has signed up to your email list, they are interested in your products and want to hear from you.

For example, imagine you send an email letting subscribers know what you’ve got in stock and ready to ship. For the store owner who needs more product just before the busy holiday season, that email is incredibly valuable.

The Four Most Common Wholesale Mistakes

After working with hundreds of wholesalers, Katie has noticed that there are four mistakes makers and artists make when they start wholesaling.

1. Pricing Products Incorrectly

Newer wholesalers often price their products incorrectly, with the majority pricing their items far too low.

If your prices are too low, your profit margins will be very slim (or, worst of all, negative). After crunching the numbers, Katie recommends never fulfilling a wholesale order under $25.

You may be worried about setting your prices or opening order minimum too high for indie retailers, but don’t be! Orders as low as $150 are still considered small in the wholesale world.

I’ve often talked about the importance of understanding your numbers so you can profit more.

Katie recommends the same, saying, “I know a lot of people are afraid to look at the numbers. [But if] we don’t pay attention to our numbers, we don’t look at what our margins are, you could be selling something and losing money on every deal.”

2. Having Incomplete Wholesale Terms and Conditions

Your wholesale terms and conditions must be clear and comprehensive.

Newer wholesalers often forget to include opening order amounts, MOQs, an overview of their sales process, a return/exchange policy, and what they’ll do if an order arrives damaged.

All of these must be addressed in your terms and conditions. If you don’t, you’ll face problems down the road—and potentially raise a red flag for buyers. It’s frustrating when store owners don’t have a clear understanding of how to buy from you and what to expect.

3. Sending Weak Pitches With Missing Information

Reaching out to potential customers can be intimidating. But it’s certainly not going to go well if your pitches are missing critical information.

Be sure to include how to order and your comprehensive catalog with your terms and conditions. And don’t forget a strong call to action that tells store owners what to do next if they’re interested in buying from you!

Also, consider if you’re truly ready to pitch before doing so. Is your product line ready? Do you have your catalog on hand with all the necessary information? Do you feel confident in your pricing?

If your answer is no to any of those questions, don’t pitch just yet. Dial in your sales tools and product lines first.

4. Jumping Into Trade Shows Before You’re Ready

Trade shows are a massive undertaking. Properly preparing for a trade show takes many, many hours of labor, along with a significant financial investment. Katie’s students often spend $10-15K per trade show.

Selling your products directly for a while before leaping into trade shows will give you a chance to iron out your sales process, fine-tune your product lines, figure out your marketing, and establish your manufacturing/fulfillment processes.

Resources

Why You Should Never Accept a $25 Wholesale Order
Ep. 21: Why You Should Have an Email List and How to Get Started
Ep. 44: The Retail Profit Pie
Ep. 153: Why Isn’t (Or Is) Your Retail Store Profitable?
Faire Referral Program for Makers and Retailers
Do I Need a Wholesale Line Sheet?
This episode is brought to you by the Savvy Shopkeeper Quiz. Find out what stage of your retail journey you’re in & get a retail roadmap with curated resources to help you along the way.

Timestamps

[03:51] Meet Katie, founder of Proof to Product
[08:29] How makers and artists can get started with wholesaling
[16:13] Why the customer journey is so critical to succeeding as a wholesaler
[18:21] How Faire can help wholesalers reach more customers
[21:36] The best outreach and marketing tool for wholesalers
[24:06] Why trade shows are about more than just making sales
[29:23] How wholesalers can find the right manufacturer for their products
[35:12] The four most common mistakes that brands make when trying to get into wholesale
[38:15] Why wholesalers should never show up unannounced to pitch a store owner
[42:46] How store owners can build better relationships with wholesalers
[47:09] Why wholesalers and store owners should reciprocally tag each other on social media

About Katie

Katie Hunt is the founder of Proof to Product. She is a podcast host, business strategist, and community builder for product-based business owners.

Since 2011, Katie has helped thousands of brands get their products on the shelves of retail stores big & small. Her alums’s products are sold in Target, Nordstrom, The Container Store, and Starbucks, as well as independent boutiques worldwide.

Katie is a regular contributor to Entrepreneur.com. Her work has been featured online in Forbes, NY Times, Buzzfeed, Brit & Co., and on select podcasts such as eCommerce Badassery, What Works, Gift Biz Unwrapped, and Planning for Profit, to name a few.

Katie brings experience, education, and a love of learning into her programs. She earned a dual MBA in marketing & finance from Loyola Marymount University, and she has over 20 years of experience teaching innovative business development and marketing strategies. Her strengths lie in connecting people and bringing ideas to life—brainstorming, making a plan, and executing.

Website: www.prooftoproduct.com

Instagram: @prooftoproduct

Podcast: Proof to ProductFeatured Resource: Is wholesale a good fit for your business? Find out with Katie’s free wholesale audio series at prooftoproduct.com/privatepod