MARKETING ARCHIVES
Sales vs Promotions
, Pricing Your Goods
,
Customer Relations,
Price Points,
Selling on Online
Auctions,
Selling From Websites,
Selling At Craft Fairs,
Selling At Home Shows
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Next Month's Article will be on free advertising. Click here to email if you'd like to be interviewed on a free advertising method that worked. Selling To Stores
author: Sandy Paluzzi The golden rule of selling to stores is to NOT compete with them. Artists handle this in various ways. Some simply do not sell retail. Others have a wholesale line and a retail line that is at an entirely different price point. Still others sell the same type of goods both retail and wholesale. However, they are careful to price their retail sales at or above the store's retail prices. The people I interviewed all had different formula for pricing their wholesale goods, but they all recognized the store had to be able to sell at a profit of a little over 100%. In other words, if the store buys your item at 9.50 they have to be able to sell at around 20.00. Consignment shops turn the formula around and take a percentage of the selling price which can be as high as 40%. Consignment issues are discussed further down this article in the personal interviews section. Beaded goods fit well in many different types of stores: artisan co-ops, gift shops and hair / nail salons to name a few. But, by far, the best type of store to sell your handcrafted jewelry is a clothing store. Forget catalogs - store owners want to see the merchandise. Your sales will increase if you approach them with samples in your hands. Sales will increase even more if you have inventory to leave with them at that moment. While some stores will pay cash for their merchandise, most prefer terms of thirty days net. Unless you live in a very large city, you may reach a point where you want to grow your business beyond your local area. Some craftspeople send 'approval boxes' to stores. The stores can then select some pieces and return others. While this may work on a small scale (say if you only want to reach high end galleries), it is a logistics nightmare. There is also the possibility of merchandise getting lost or damaged in transit. To truly go nationwide, most sellers add a sales force of some type. Two of the people we interviewed used independent sales reps to market their goods. Interestingly enough, all three of the women we interviewed had different approaches to stocking their merchandise. Carole produces one of a kind pieces which she markets; Dianne (and her husband Steve) produce the same piece over and over so the stores get exactly what they see; and Shayala provides representative samples. Her stores get items that are similar but not necessarily identical to the samples. Carole Springer is no stranger to jewelry. For years, she has made her living selling vintage jewelry. She placed some of her vintage pieces in a local consignment shop which features artisan made goods. About a year ago, she started beading and found it a wonderful evening activity. She makes one of a kind seed bead jewelry and places it in the same consignment shop. Since the shop is local, Carole can physically bring the pieces to the store and help manage their display. She pays the shop owner 40% commission. Damage or theft has not been as issue to date. The shop owner has said she could cover a broken / pilfered piece of jewelry. However, the consignor does not have the inventory insured. She could not cover merchandise if a majority of the store's goods were lost. Carole plans on listing her beaded jewelry on the internet soon. We look forward to seeing it. Carole uses her life time experience in the jewelry business to price her goods. She knows what prices similar pieces fetch and prices her goods accordingly. Dianne and Steve Bentley of D&B Design are a husband/wife team. They support their family with sales of their jewelry line.
D&B carries both a wholesale and retail line. Their wholesale line is less expensive than their retail line. They first design a piece of jewelry and then assign it a cost. They have a formula which includes cost of material and time. Dianne and Steve know their stores can sell at about 39.99 a piece. They have to be able to sell the piece to the store at around 18.00. If they can make a profit at that price point AND if they have a large supply of the components on hand, the piece goes into their wholesale line. Stores can order exact duplicates of the jewelry in their wholesale line. D&B's more expensive pieces become one of a kind jewelry to be sold at art shows. Dianne and Steve researched producing a catalog. They found it was cheaper and more effective for Steve to make personal visits to the stores. Every once in a while, he loads up their van and goes on the road for a few days They also use a sales rep. This sales rep approached Steve at a booth in a show he was doing and said she wanted to add a jewelry line to her existing clothing lines. While industry standard for sales reps is 15%, this particular rep was getting 17% for her clothing lines. Dianne and Steve decided to meet that commission structure. The sales rep has been so productive that Dianne and Steve recently raised her rate to 20%. Dianne explained that there are a lot of jewelry makers out there and D&B wants to keep their rep happy. They did sign on a second rep, but received no sales. After a trial period, they discontinued their relationship with the second rep. Shayala Diamond of Lotus Moon sells wholesale exclusively. She has a complete line of suncatchers, keyrings, lamp / fan pulls, bookmarks and bracelets. Shayala provides retail packaging for all her pieces.
To meet this demand, Shayala maintains a bead / charm inventory of over $30000. She has two other stringers on board. She also has a computer program which generates a report on paid invoices for each of the 35 sales reps she has on board. Shayala's biggest challenge is managing the reps. These independent sales people sell for her and yet she has no control over them. She puts effort into training them. It is very important that they set the store's expectations correctly. Again, the store will not receive the exact same piece they are being shown. Shayala has found her reps in various ways but recently signed quite a few when she advertised for them on her website. Her philosophy is to sign as many reps as possible. She then dumps those that prove to be unproductive. Some stores will not deal with reps so Shayala also takes out some ads in trade magazines. But the majority of her sales come from her reps. What I found interesting about both of our volume producers was that neither got bored repeating the same piece. They find the beading process a reward in itself. Shayala likens it to meditation. While I do not bead anywhere near as much as Shayala or the folks at D&B, I must say I agree with them completely on the restorative powers of beading.
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