Everything you need to know about stocking shops
A few weeks ago I was tasked by members of Glasgow Etsy Team to find out all about stocking shops. As this is something I've never really done, I didn't really know much about the subject. However, it's good to take the time to research something new, and I feel like I've learned a lot about the whole process. Here's what I found out:
- A stockist will probably expect a mark up of 2.4. This means that if you expect your product to sell for £12 in their shop, they will pay you £5. This allows them to make a profit and account for the VAT that they need to pay.
- Look at what products similar to yours retail at. You don’t want to be too low, but also, you don’t want to price yourself out of the market. Remember that some handmade items might not work for wholesale.
- Will you have a minimum order quantity (the minimum number of items the stockist needs to order) or a minimum order amount (the minimum spend that the stockist needs to meet to order your items)? Having low minimums may encourage stockists to place an order, but it must also be worth your while too.
- Will there be a level at which the delivery is free to the stockist? (carriage paid) This is a good way to encourage stockists to increase their order value.
- What are your payment terms? First orders are usually proforma, which means that you get paid before you send the order out. After that, you can choose whether to continue with proforma or give them 30 or even 60 days to pay. You may want to think about what will happen if the stockist doesn’t pay on time.
Line sheet / catalogue / wholesale website section:
- Create a pdf line sheet, online catalogue or wholesale section of your website that includes clear photos of your products, prices (RRP & wholesale), minimum order quantity / amount, carriage paid amount and payment terms.
Sale or return
- Each stockist's commission rate is different, so you could ask them what they usually look for. This may be up to 50%.
- Make sure that you have a clear agreement with the stockist so that you know what happens if stock gets stolen, when and how you will get paid (don’t leave it vague), etc.
Renting a space
- You pay an agreed amount of rent every month. This is payable whether or not you make any sales. Sometimes you can also be charged commission on sales and / or be expected to cover the cost of card payments.
- Make sure that you have a clear agreement with the stockist so that you know what happens if stock gets stolen, when and how you will get paid, etc.
- Make sure that your products are a good fit with the shop and its customers before you go ahead.
- You will probably be responsible for any stands, etc required to display your products in the space. You will also need to keep track of stock / drop more off whenever required / change stock depending on what’s selling or not / change specific occasion stock (products for Mother’s Day, Christmas, Halloween, etc)
Contacting a potential stockist
- It’s a very good idea to do your homework before you contact a stockist. Follow them on social media and interact with their posts. Get an idea of their personality, what they like, what they're looking for, and how your products will fit. Make sure you know their name! Visit the shop if you can, but…
- Do not turn up unannounced to speak to a stockist and show them your work. If you want to speak to them face to face, email them first to arrange a time.
- Find out how they like to be contacted about wholesale. Do they have a specific email address that you should use, which is different to general customer enquiries?
- When sending an email, make sure that you use their name. Show that you know a bit about them and their shop and explain why your products would be a good fit. This will make the email personal to them.
- Give them a little information about yourself and your products – what your products are, how your products are made, where else you’re stocked, price range, minimum order quantity / amount, and whether you would like sale or return or wholesale.
- Include a couple of photos so that the stockist gets a good idea of your work straight away.
- Include a pdf line sheet, online catalogue or link to a wholesale section of your website. Do not ask a stockist to look through your Instagram feed or Etsy shop!
- Send all the information that the stockist will need in one email so that they can look through it all without having to email back and forth asking for photos / information.
- If you don’t hear back from the stockist, you might want to follow up with another email, but it is very important to make sure that you keep it light and professional. It’s possible that they may have just forgotten about your email (or it has got lost in their inbox) and be glad of the reminder, but as they probably get lots of wholesale emails every day, they won’t have the time to reply to everyone. If you keep contacting them, you will only get the wrong sort of attention and they will probably not place and order now or in the future!
- Don’t take ‘no’s personally. It’s probably just not right for the store but it doesn’t mean that it’s not lovely or right for a different store. On the other hand, they might love your products but not have the budget to place an order just now – they’ll get in touch again when the time is right.
- Once you get a stockist, try to update them every so often on new products, changes, discounts, etc. You could send an email or add them to a mailing list and send out a newsletter.
- Don’t worry about bar codes. Lots of gift shops don’t use them, and if they do, they will probably sort them out themselves.
- It’s never too soon to contact stockists about Christmas products!
A few points from local retailers
‘High minimum order quantities per product can have an impact, especially when I’m restocking. I'm totally fine with 6s for cards etc but for higher value items it can make it tricky. If I'm trying to a restock on a few brands and want to just do minimum order value, if you say I need to order 10 bags at £5 each I might restock something else first, because I know I can get a variety of products to make up my £100 spend.’ Zoe, Hell Yeah
‘Never just show up in a shop and ambush a retailer, they never like it - and it’s unprofessional. If they are interested to see the product in person, you can arrange an appointment at a time that suits.’ and ‘Never ask potential stockists “what would you be willing to pay?” Set your pricing, including your RRPs and stick to it. You can’t expect shops to pay different prices.’ Jennifer, Jennifer Lemon Designs / Pink Poodle
- The Small Business Collaborative
- The Indie Retail Academy and their Facebook group
- Harbour Lane Studio on Instagram (see the ‘Stockist Insider Secrets’ highlight in her bio)
Hopefully that has given you some insight into how it works. Good luck if you decide to give it all a go!