Over the years of selling gift products I have noticed one particular area that is critical to selling to gift shops: Appropriate pricing! Each gift shop can be different, but shops often follow certain criteria when purchasing and pricing gift items.
In light of the recent announcement by Etsy and their new wholesale marketplace, I find that many folks are still in the dark about wholesale/retail pricing structures. If you plan to wholesale, this information is critical to know and implement in your business strategy!
First and most important, most gift store buyers ‘keystone’ or double the wholesale price of products retailed in their stores. This is standard practice in the Gift Industry. Some stores will use the 2.5 x the original pricing or more. It really depends on the store, its location, and the particular store policy.
If you are selling your items on your website or at shows to the general public for $10, gift stores will expect to buy them for no more than $5 to $6. Retail shops need to make money too, so don’t expect any less from them!
If you are unable to wholesale your products for less than half of retail price, you have a few options:
1. Raise your retail price. You may be selling your items too cheap! I find this to often be true with newbies who are looking to make some quick sales at craft fairs.
2. Take a look at your costs figures per item and see where you may be able to cut. Often, if you are making an item in larger quantities, for instance, your per unit cost will be cheaper.
3. Re-work your product in a manner where you can reduce costs
Appropriate pricing also relates to each individual gift shop. Some shops feature a wide range of priced products, and some shops feature specific price ranges. You will want to find a store that has other products in the same general price range. Generally, souvenir gift shops or specialty food stores sell products in the $2 to $20 range. (Of course there are exceptions to this amount – this is just a general figure). Higher end gift shops may sell products that are over $100 or more! Find a shop that has similar lines as your own products before attempting to sell to them.
Once again, these suggestions are based on generally accepted procedures in gift shops. You may find different circumstances for your products.
If you are interested in more detailed information on Pricing Your Products, check out our FREE eCourse where we will take you step by step to appropriate pricing for your products.