Wholesale vs. Retail - How are they Different?
Let's talk about a whole field versus retail they're very different and a lot of different ways so we're going to have some fun on twitter today to if you guys are on twitter please go ahead and tweet I'm going to have some promise that you can tweet out there some real key takeaways it's helpful way for you to look back on them later or you could just share with friends that couldn't be here but as I said selling wholesale and selling retail require very different strategies they require different schedules and consideration so let's talk about a few of these your customer base your customer base is very different when you're selling retailer when we talk about retail we mean that you're selling through your online shop you're selling it craft shows you're selling directly to the end consumer the person that's going to use your product that where your necklace use your candle but you're right a card for valentine's day perhaps so on the wholesale side you're selling to retail stores s...
o it's a third party is purchasing your products and then they're turning around and reselling it to the end sumer typical wholesale accounts are brick and mortar stores there's some online retailers that will have holes request will sail accounts and there's also a whole new contingent c of at home retailers that are popping up this is sometimes more for you know customize work that can be personalizing things and there's present concert that too but it's a really important on the customer front to recognize that your customers very different and their needs are very different and we'll talk about that in a few minutes to but who you're targeting with each of these go to market strategies is going to be different so your product when you're selling retail, you have a lot of flexibility, right? If you put something up in your online shop but it doesn't work, you can pull it right down if you put something up in your online shop and you want change price or something, you can do that you have a lot more flexibility when you're selling wholesale, you really need to create regular release schedules and maintain an inventory and we'll get a little more into this later on. But a regular release means that you know ideally three to four times year you're releasing at least six new excuse, but again we'll cover that in more depth later pricing. How is pricing different between retail and wholesale retail? You set the price, you determine what you're going to sell that in for the craft shore and your online shop again, you have the flexibility to make changes if you're if something's not working, you have the flexibility to drop something on on sale if you need tio with wholesale, it works entirely different you set the wholesale price and then a retailer, whoever you sell it tio, they're going to set the retail price and so that's called keystone inc which we'll get into more in depth later. I just want to kind of cover the surface level of how the differences are, but we'll get more into that when we talk about determining your production costs and then determine your wholesale prices from that. So buying cycles are different, very different between retail and wholesale buying cycles. Think about it, you know, valentine's day somebody's typically purchasing cards january and february, right that's an consumersbuying cycle, but a wholesale customer is going to be buying sixty eight months before the season. So if something is based around an occasion you need to be aware of what does buying cycles are so that your releasing your product in a timely manner when when your customers are ready to buy and you can always release early but she never want to release late because you miss those dollars, okay, buying cycles or different um and then payments when you receive your payment is very different between retail and wholesale, so retail the customer hops on your online shop, they place their order, you get paid straightaway the ship, the product and wholesale you get your payment when you ship the order, so what happens is the store will place the order they'll set their ship date and again we'll dive more into this later but they'll shut set the ship date and then you would prep the order and then you would charge their card once you ship the items so it's very it's different in terms of how you're managing your inventory and your cash flow there as well because it's not like you're taking the income to then create the product to then send the product it's a little bit different on ben marketing I mentioned this earlier your and customers very different between retail and wholesale so you know on the retail side you want to focus on the product design and the function and how your and consumer is really going to benefit from using your product in a personal level of you know, how will they use this how would they feel when they use this product? Whereas on the wholesale side you're dealing with a business who does care about how they're in consumers feel but really they're more concerned of you know when new products are out there how can I bring fresh new things to my shop? What are the margins like? Well I make money off of this their motivations are different so again is really honing in on who your customer is and how you can reach them and just recognizing to that that is quite different the two here retail and wholesale so let's talk about talks among more specific considerations for whether your product line is ready to wholesale so here's another treatable for you? Creating a cohesive original product line must be your top priority when you're wholesaling you guys, I can't stress this enough if you do not have a solid product line that is well thought out well designed that's, cohesive that's robust enough in terms of volume, you're not ready for wholesale and that's, okay, but it's, good for you to kind of way where you and we'll give you some benchmarks and actually in your in your bonus materials, there is a list of questions that will go through that there you can work through that kind of help you determine whether or not you're ready, but okay, so for the sake of this discussion all day today, I am going to assume that you already know what types of products you want to sell, that you have already worked out the art side of things. So we're going to focus on the business side of things on going to point out some areas you will need to continue to consider to help you figure out whether or not wholesales right for you.