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Bare Basics of Wholesale

January 11, 2013

sourcinghandmade

I was recently contacted by a handmade artisan looking for more information on wholesaling her handmade candles.  I firmly believe in knowledge sharing, so was happy to reply.  Here is a copy of my response (and again, these are some of the bare basics, nothing too complex or detailed):

The bare basics of wholesale are this:

  1. Wholesale boutique buyers generally get a 30-50% discount off your retail price.  So, for example, if you sell a candle for $10, a boutique would expect to buy it wholesale for $5-$7.  This is of course because s/he has to be able to make a profit above her acquisition cost.  The question is then can you make a candle, pay all your costs, and still make your own profit if you sell it at $5-$7?  If the answer is “no,” then wholesale would not be viable given your current cost / price structure.  Perhaps you could cut costs to make it work, perhaps not.
  2. Wholesale buyers generally expect to have to meet an order minimum in order to receive the wholesale price (for example, 10 or 20 candles).  This order minimum would naturally make your cost per candle decrease (because it’s being spread over a greater quantity), and may make you feel more comfortable with #1.
  3. Do you have professional packaging?  This would include labels and / or a box, however you envision your candle would be displayed on a store shelf.  If the packaging isn’t professional in appearance, then a boutique would likely not be interested.
  4. How do you differentiate from the other candles on the market?  Since there are a lot of candles out there, your product would either have to generally be equal in quality and be priced less, or would have to be of unique or superior quality to demand a higher price.

I will publish more posts like this for the sake of sharing information, or for anyone to put in a “tickler file” for future information…when the time is right.

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