Selling your product in a brick and mortar store can be an effective and relatively easy way to expand your market. Aside from opening your own store, there are two primary ways to sell your products in a store: wholesale and consignment.
Stepping foot into the wholesale/consignment market can seem overwhelming but I’ve found it to be well worth the effort. I’ve sold Bison Booties in retail settings using both wholesale and consignment methods. Although I prefer the simplicity of selling wholesale, I think consignment is a great option as well, especially if you are just starting out.
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Wholesale: Your products are sold to a retailer. The retailer then sells the products to consumers.
Consignment: Your products are available for sale at a retail location. After the item sells, the retailer pays you an agreed upon percentage of the income.
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But let’s not get ahead of ourselves. Are you ready for retail?
Packaging: Is your product packaging retail-friendly? Does your product packaging represent your business well? Double check that your product labels and packaging conform to government requirements. Now is the perfect time to address any concerns you have.
Shipping: How will your items arrive at the potential retail locations? Delivery? Shipping? What will it cost? Who will pay for shipping — you or the retailer?
Pricing: Most retailers will be expecting to sell the product at twice what you are charging for wholesale (this is called a 100 percent markup). Consignment rates vary greatly from 40-100 percent Are your current prices in line with retail prices? Can you afford to sell your product at a wholesale price? Make sure you are paying yourself!
Taxes: This one is easy! You do not need to collect sales tax on your wholesale/consignment sales. The retailer is responsible for collecting sales tax on the sale of your products.
Small Print: What do you expect? What are your rules? I suggest you draft a contract for wholesale sales (most consignment retailers will have a contract on hand). Be sure to include details about minimum orders, timelines/turnaround, pre-payment and invoicing. Also include any stipulations you have regarding how/where the product is sold and displayed, and suggested retail price(s).
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Selling wholesale/consignment has been instrumental in diversifying my sales outside of the community I live in. Bison Booties are now available in four locations in North Dakota and in five other states across the USA and one location in Australia.
Erica Hager is owner of Bison Booties in Mandan, ND. www.bisonbooties.com
Shelves of booties photo was taken at Moe Moe’s Garden in Dickinson, ND www.moemoesgarden.com