Do you have a product-based business and you're ready to scale? If so, stick around because today we're talking all about how to scale your product-based business. You can watch here or read below.
How to know if you're ready to wholesale your products.
When you have a physical product-based business, wholesaling is the quickest path to scaling your business. I've got a list of questions here so you can figure out if you're ready to wholesale.
Do you have a product that has demand?
Are you currently selling on Etsy, your own website, Amazon or at events and you're seeing a lot of demand for your product? If the answer to that is yes, that is the first step.
Do you have enough of an assortment of products that you could call it a program or a collection?
When I started wholesaling I had candles as an example. I had a line of products that I called the Home Baked line. All the candles in that assortment were home baked fragrances such as sugar cookie and blueberry muffin and so forth. Do you have a line where you can put together a cohesive program or collection for the retailers?
Do you have your product packaged in such a way that they would be able to be displayed in a retail store?
Are your labels correct? Are your labels professional? And do you have a way for the retailers to display? Do you have a point of purchase display?
When I sold my Home Baked candle program, I had a little tabletop hutch that I supplied with the candles to the retailers. It was $25 for me to purchase the hutch and I built the cost into the cost of the program. They paid $299 and got a fixture fill, they received the hutch and all the Home Baked candles to go with it. Now I had a program. Do you have a way to put together a program or a display with your products?
You can have a permanent display such as this little wood unit or a simple cardboard fixture such as the example below.
Do you have enough margin in your products that you can afford to wholesale?
Let's use the example of a candle. Say it retails for $20, you would have to wholesale it for $10. Then you reverse engineer the numbers, would your cost be no more than a third of $10? Then you definitely have the margin that you can afford to wholesale.
Do you have the ability to produce all the products if a retailer orders your product?
There's nothing worse than getting an order and not being able to deliver on that order. Can you manufacture or purchase quickly enough, the products that you would be selling to the retailers?
Do you have the ability to ship your products?
This is not a deal breaker because you can always get a fulfillment center to outsource the shipping for you. You've got to be able to ship your products or you've got to be able to find a fulfillment center to ship them for you.
Are you willing to give retailers terms/net 30 and do you have the ability to finance their purchase orders?
On a new customer where they're just opening up an account with you, you don't necessarily have to give them 30-day terms. You can charge the customer up front for the order but if a customer stays with you consistently and continues to order, they're going to ask for 30-day terms, so you need to consider that.
Do you have a line item sheet?
You need to be able to give the retailer all the information they need on pricing, size, weight and shipping terms on a line item sheet.
Here is an example of one of my line sheets.
Here is another example.
If you answered yes to all of these questions, you're definitely ready to consider selling wholesale.