Do You Charge Enough for Your Products?

New wholesalers don’t seem to charge enough for their products!  Of course, this is not true for everyone, but I see it too often (and can tell you some horror stories of dealing with producers who low-balled their product, then complained because no sales rep would take them on!)

Pricing does not need to be difficult.  If you are new to retailing or wholesaling, I suggest you check out my free e-course on the subject.  Sign up here:  “HOW TO PRICE YOUR PRODUCTS” 9-Lesson E-Course!

If you’ve wholesaled for awhile and are wondering if you need to increase your pricing, here are a few guidelines from Claire with Indie Retail to help you determine if you are underselling your products:

Charging what you’re worth

You’re hardly making a profit when you sell wholesale.

Your wholesale price is the smallest amount of money you’ll ever accept for your lovely thing.

But that doesn’t mean it’s a rock-bottom, bargain-basement, welcome-to-debtors-prison kind of price. It shouldn’t weigh your business down.

A healthy wholesale price is like a helium-filled balloon – it covers your direct costs, your overheads and your time and labour, but it also contains a significant shot of profit. That extra element is what gives your business lift….

You’re hardly making a profit when you sell retail.

Your retail price is tied to your wholesale price, so if the former’s out of whack there’s a good chance the latter is too….

You’re putting something wonderful out into the world and getting very little back. That’s not a business; it’s an expensive hobby….

You’re working all the time and still aren’t making much money.

…If you’re constantly working at maximum capacity – but still don’t have much to show for it – something has to change. The most valuable asset in your business is you. To function at your best you need rest, comfort and time to think…

Your prices are low compared to your competitors.

Closely pegging your prices to your competitors’ isn’t a great plan, but there should be some correlation….

In comparison to mass-market companies, your stuff will always look expensive – they can produce goods for much less than you ever could. But when you look at other designers, craftspeople or makers in your field, people at a comparable level who make and sell something similar, and discover they’re charging significantly more, well, maybe it’s time for you to catch up.

You’re pricing according to costs, not value.

At the end of a long day of making, when you turn to look at your work and feel a surge of pleasure and satisfaction, what’s the source of that feeling for you? Is it:

a) The deep joy of channeling your imagination, skill and experience into a unique object which shines with quality, personality and presence.

b) You saved your customer the trouble of putting it together themselves.

It’s the first one, right?

This is why your prices must reflect the value you create for your customers. You’re not simply assembling raw materials like a robot in a factory. In your hands, those materials become much more than the sum of their parts….

If your current prices are based simply on what it costs you to make your product, you’re not taking that extra value into account.

Now, before the big holiday buying push, is a good time to make sure your pricing is appropriate and you charge enough for your products!

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Are You Just Starting Out Wholesaling to Retailers?

Working in the business of wholesaling to retailers for over 15 years, I think I heard the following question more frequently than I remember:

“I am just starting out wholesaling to retailers.  What do I do?” (or something along that line.)

The question is way too general for me to give any kind of effective answer.  I don’t know what their product line is, what you have done already or what your plans are for your business.

In order to give a respectable answer, I wrote this article on starting out wholesaling.

  1. First, I suggest you look at what products to plan to offer a store buyer.  If you have a line of one product, you are wasting time selling wholesale.  Buyers are looking for a line of products — at least three items that compliment each other, are different colors, flavors or scents of your original product.
  2. Sign up for my email list and receive a free copy of my reports which will help you understand the wholesale/retail terminology and help you get the appropriate systems in place to wholesale.  (If you are already on my email list and do not have a copy of these reports, reply to this email and I will get them to you):
    • Quick Start Guide for Setting Up Your Wholesale Systems
    • Glossary of Industry Terms:  Wholesale/Retail Industry
  3. Once all your systems are in place (listed in the Quick Start Guide), you are ready to focus on your first wholesale account.  Start with a local retailer where you can check out the store, meet the buyer/owner, and begin the process.  Don’t try to be everything to everybody because you are not!  Focus on accounts that sell similar products to your own.
  4. Listen to what the buyer is telling you.  The information you can glean from your first buyers can be very helpful in feedback on your product line, your sales materials and your presentation.Are You Just Starting Out Wholesaling to Retailers? Wholesale Business Consulting and Coaching

If you need further help, please check out my 1-on-1 Wholesale Coaching and Consulting Program where we explore your personal situation in more detail and work out a strategy that works best for you and your line of products!

 

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New Sales Tax Ruling for Online Retailers

A new ruling on collecting sales tax for online purchases has recently been put into effect.

According to the MSN website:

U.S. states could reap billions in online sales tax revenue and buttress their budgets after the nation’s top court ruled Thursday (June 21)  that e-commerce companies could be required to collect the money, even if they have no physical presence in a state.

This decision overturns a 1992 “Quill” Court decision stating that sales taxes were collected on a purchase only if a company had a physical presence in the state where the purchase was made.

The new Supreme Court ruling may affect your online business, but each state must pass a similar law first.  Nolo website explains:

If you are selling on the Internet to states around the country, you now will need to be aware of which states have enacted laws requiring the collection of sales tax by online sellers. In order for a given state to require you to collect sales tax, that state must pass a law allowing it to do so.

How is this going to affect online retailers?  According to Forbes, each state will need time to implement the policy:

At the event, a panel of tax experts predicted that states likely would act within the next year or 18 months to expand their collections requirements. Some states may be able to set a collection regime by the end of this year.

It is my understanding — although not all the information is in for all 50 states — that not all online retailers will be affected by the new ruling.  The New York Times revealed the following example from South Dakota:

South Dakota responded by enacting a law that required all merchants to collect a 4.5 percent sales tax if they had more than $100,000 in annual sales or more than 200 transactions in the state. State officials sued three large online retailers — Wayfair, Overstock.com and Newegg — for violating the law. Lower courts ruled for the online retailers, citing the Quill decision.

The ruling is still muddy as lawmakers are looking at standardizing the tax collecting process.  Otherwise, the ruling would cause a nightmare for online retailers trying to figure out how much to collect from what states and what is required for reporting to each state.

Forbes explains further:

While this is a great first step, it could create a patchwork quilt of state laws that could become convoluted for smaller sellers to navigate. While technology has advanced significantly since the 1992 ruling, and there will be ample solutions available to sellers to clarify the process, it will still be a situation that is in constant flux and will need close monitoring as individual states change their laws. I believe a federal solution is still the most desirable outcome for the industry as a whole – but this ruling is still certainly a step in the right direction.

Guess we will need to wait and see how this enfolded in the next months or year.

 

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Five Interests Fact about Start-Up Businesses

If you are a new business — just starting out — you might want to keep reading.  The following article excerpts from Innovation Excellence lists a few things to consider when starting or scaling up your business.

Five of the Most Surprising Statistics About Startups

1. 50% of all new business fail within five years.Five Interests Fact about Start-Up Businesses

… Unlike humans, who are more likely to die in the following year as they age, businesses that survive past the first two years are less likely to die in each subsequent year. So, while 25% of new business don’t make it past year one, only 10% of the business that make it past year 5 will die off in the following year, and only 6% in the 10th year. … But here’s where you need to be cautious. Rather than try to go for broke in the early years, consider building your foundation so that you can take greater risk in outlier years when you do have the safety of an established business to fall back on.

2. You’re more likely to succeed if you’ve failed than if you’ve never tried.

… Although founders of a previously successful business have a 30% chance of success with their next venture, founders who have failed at a prior business have a 20% chance of succeeding versus an 18% chance of success for first time entrepreneurs. … Although you learn a lot from success, failure also teaches valuable lessons about what not to do….The advice? Bring someone on board, at least as an advisor, who has been there before. …

3. 95% of entrepreneurs have at least a bachelor’s degree.

We’ve idealized the role of college drop-outs as successful entrepreneurs, Bill Gates, Steve Jobs, Mark Zuckerberg, Oprah, and many others all took the back door out of college to start and grow their companies. …The odds are overwhelmingly in your favor if you stay in school and develop not only the knowledge and discipline, but also the connections that will serve you well as you go forward.

4. Scaling too fast, too soon is the number one reason most new companies fail.

Nobody ever started business thinking, “Gee, this is going to take a lot longer than I thought it would!” But it always does because the vision in your mind is always far ahead of where the market is. If it wasn’t, someone else would already have done it! Give yourself the runway and set the expectation to be patient with your dream.

5. Two founders, rather than one, significantly increases your odds of success. You will raise 30% more investment, grow your customers 3 times as fast, and will be less likely to scale too fast.

In my own experience it has been nearly universal that startups do better when they have two balanced and fully invested partners. The ability to rely on each other to share the burden, temper risks, collaborate creatively, take on specific areas of responsibility, and to motivate each other are all absolutely critical during the early stages of growth. …This is one case where 1+1 is definitely more than the sum of the parts.

READ THE FULL ARTICLE

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More Ways to Beat Procrastination

A few months ago, I featured an article by one of my good friends, Wendie Kause, on procrastination.  Her article was so well received that I decided to share more on the subject of beating procrastination!

This particular article is written by Sandy Gallagher of the Proctor and Gallagher Institute

10 Ways to Beat Procrastination

So if you have a tendency to put things off, here are ten things you can do to beat procrastination and enjoy a happier, more fulfilling life:More Ways to Beat Procrastination

1. Make a decision. This is my favorite way to overcome procrastination. Decision is the opposite of procrastination….

To become more decisive, get Think and Grow Rich and read the chapter on decision every day for 30 days. This will go a long way in helping you act quickly on your ideas.

2. Write it out. Set aside a little time and follow this three-step process:

a) Get a sheet of paper and write out how you currently feel about procrastination. Elaborate on how you procrastinate—what you do, when you do it, etc.

b) Take out a second sheet and ask yourself, “What would be the exact opposite of that?” Then, on the top of the page, write “I am so happy and grateful now that…”and below it write out detailed statements that are the opposite of the things you wrote on the first sheet. When you are finished, burn or shred the first sheet of paper.

c) Read and rewrite what you wrote on the second sheet every day until you notice that you’re no longer procrastinating.

3. Chop it up. Sometimes we procrastinate because we don’t know where to begin. Break large projects into milestones, and then into small, actionable steps.

4. Quiet your mind. This one might surprise you, but meditation is one of the most effective ways to get rid of self-sabotaging behavior, including procrastination.

5. Stop trying to be perfect. Perfectionism is an illusion that slows you down and prevents you from reaching your goal. Act quickly, doing the best you can.

6. Partner up. Find an accountability partner so you can help each other commit to and follow through on the things you each need to do to move toward your goals and dreams.

7. Take a closer look. Revisit what you’re putting off and ask yourself why you have it on your list. Be honest with yourself. Maybe you’re putting it off because it’s something someone else wants you to do, but it’s really not important to you. If it’s not something that you really want or should do—or something that will move you closer to your goals, stop wasting energy on it and remove it from your list.

8. Put it on your gratitude list. Tomorrow morning, write down how grateful you are that you started the project and it’s going well. Write it in the present tense and feel like you already achieved it.

You see, expressing gratitude isn’t only for things that have already happened. Being grateful for things that you want and expect to happen raises your vibration, and thereby helps you get the results you want.

9. Reward yourself for taking action. When you accomplish something you want to put off, reward yourself. …. Do whatever will make you feel good about overcoming the procrastination.

10. Adjust your attitude. Procrastination stops you from winning and realizing many great joys in life. But even a small shift in your attitude can make a big difference in your results. So every day ask yourself, “What environment do I want to create for my life to really thrive?” Procrastination can’t survive in an environment like that.

Read the full article

If having an accountability partner (suggestion #6) — one who knows the ins and outs of having an maintaining a successful product based business — would be a good option for you, let’s talk!  I coach and mentor many producers, helping them move past procrastination and fear to achieve their goals.

Find out more here:  1-on-1 Wholesale Business Consulting and Coaching

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