Making the decision to move your business from selling your products direct to consumers to selling wholesale to retail buyers requires some thought and planning. Not all products fit the wholesale model and not all companies or producers are able to wholesale successfully.
Following are some tips from Artsy Shark to guide you towards preparing to wholesale:
You will need to scale up your production.
Give careful thought to your time frame. Can you produce the volume needed to ship orders to your customers, in full and on time? Do you have the space to store supplies and inventory as orders are being made? Are you ready to commit to producing the same designs on a regular basis, and designing new collections several times a year?
You will need sufficient materials.
In order to ramp up production, you will need more materials at hand to access as orders are created. Make sure your current suppliers can ship what you need to produce your orders. Ideally, you will also have backup suppliers lined up in case your main vendor can’t help you. Lack of materials can lead to missed ship dates, which can lead to cancellations from the buyer, so this is a crucial factor.
You may need studio (or workshop) assistance.
As your small business grows and you must fill more and more orders, you may need help in the studio. How much training will be needed to get someone up and running as an assistant? If you are the only person who can do the hands-on studio work, consider hiring someone to pack and ship, do bookkeeping and ordering, or even a virtual assistant to keep your office work from backing up while you focus on fulfilling orders.
You will need to control your costs.
Extra materials and paying for assistance can get costly pretty quickly. Retailers won’t give you a deposit up front. You must be able to manage your expenses, understanding that your wholesale buyers may have Net 30 terms. Request Net 30 with your own suppliers so you aren’t maxing your credit card, or carrying a balance.
You will need to manage your time effectively.
Focus upfront on putting business systems into place to scale from a micro to a small business. This is working on your business rather than working in your business. How can you make production run more efficiently and smoothly? Analyze your process to save time, space and effort so that each piece takes less time, and ultimately will produce more profit.
Moving your business to wholesaling could be the best or the worst decision you make. It has the potential to be the major break that moves your business to a higher level, or it could be an exercise in frustration. With careful planning (and research), the change could ramp up your business and sales to a whole new level.
For more detailed tips and direction to preparing for moving your business into the wholesale arena, check out my best selling resource: The Complete E-Guide for Selling to Gift and Independent Retailers