Wholesale vs. Retail


Fast Start Your Handmade Soap Business


Lesson Info

Wholesale vs. Retail

Now you've touched on this a little bit of alarm I think although they're appreciating this very same state to state accepted but when you decided you want to have a green business did you find the process easy to pursue? How did you go about doing it and was your business green from the beginning? Was that something you set out to do? So it was something that I set out from the beginning but I wasn't exactly sure like I tried to do everything that I could to be a sgrena's possible use organic ingredients I was using recycled materials I was really promoting recycling the packaging when you were done, what happened was the city of san francisco had I found out about a green business program that they had and you have to apply to the program it was not an easy process it was actually a really intense process. I first got my certification when I'm still working out of my home so I did actually have to have the health department came to check and make sure that all of my ingredients were ...

packaged in an appropriate way in a safe way um and then I also had the green business representative came out twice to check on things like my light bulbs my water flow my toilet paper believe it or not what paper towels I was using you know how the packaging itself I had to submit invoices and information for each place that I bought packaging to prove that it was green I had to take pictures of things if I didn't have an invoice that showed the company was green causes like soy ink and recycle that so that I think of not sorry but the paper is recycled yeah well I'll step up the game to soy ink sometime soon so it was a problem that you any oh fabio radio thank you so it was a process and it was a lot of back and forth and I had to develop in environmental policy and I had tio join some organizations in the bay area like the commuter it's like sf commuter I had to do the air quality board all sorts of telling a lie no serious stuff day was so there's what was just really, really passionate about green because you could have put this please reuse please please recycle on here you could have said organic anyway and you could have known all the effort that you were making individually but you must have really wanted that certification because it's pretty intense stuff it was and I just had to be re certified in my new space and it was even more intense because you have to re certify every two years and so that rules change a little bit you know with each go and so it took us a little while to get there, but we did. We got our re certification so, you know, you have to check each state I think is different, but now that I'm certified by the city of san francisco that automatically put me into california green business certification. So you should check with your state, check with your city, see if they have a program, and if they don't try and talk to them about it and figure out if there's a way that maybe they can develop that there's, some other organizations I think you can go through, but I just felt really, you know, I'm very san francisco based. And so that was what felt right to me. Because she's the san francisco, when you thought about your ideal client, did you imagine them, like, really wanting tio contribute more to give you their dollars? Because of that aspect of your company? I mean, hameed soap isn't exactly as affordable is like a bar of ivory or something. That's, you know, okay, to also use. So I think the person who wants to spend money on products like this, I would really appreciate that aspect of your business. Yeah, that was part of it, too, is I wanted to have, you know, like we were saying, I wanted to have ah, a third party, you know, like proof that I am green so that it's it's more of a selling point for people you know, I'm certified green business, and so they're willing to pay ten, eleven, twelve dollars for a bar of soap. Abel abel is asking a lot of when you first got started, how much product did you keep in stock on then? Also, how much product where you take you around to your different craft shows question, because one of the things I thought of is a challenge that you would have this stuff isn't good forever, no it's, not good forever and it's heavy, not something to remember, so when I was starting out, I don't have that much in stock, you know, I'd make like a I think I was making, like, twelve bar batches at that point, when I started out, I would just, like, make a batch, and I would have it for probably a couple months and and make some more had, like, maybe four, five cents when I started out, so I'd probably have around twelve to twenty bars of each throughout the month, and then when I was going to craft shows, you know, it was so hard the first time I had no idea how much to take, and I think I took something like, um eight bars each I think there's something like that was like eight bars on dh then I sold out and then I realized oh you should probably bring some more with me so it's kind of kind of tio it depends on the craft show you know little craft shows one day crash owes you might not need you know more than like ten two fifteen bars bigger crashes it it depends you know with how many people and so it's just it's been growing explanation exponentially with the amount of product that I take is just really heavy I already said that but I'm going to say anything really having a really hard guests are guests on the jewelry fester said oh it's hillary I just bring it all with me I put it in a rollaway secret and I thought hood I thought like ten books here from portland and you know I had to pay an upgrade fee for my luggage or whatever because they wait so they're so happy I'm always so jealous of the jewelry people when I see them vaulting into the shows with their little past but I'm like man and I'm not like my huge dolly and I'm like lifting things for totally totally just invite attention to is in san francisco says can you ask a lot about pricing how much is a bar have you come to your pa s o my bars range from about ten two eleven dollars I have some retailers that price them up from that. I think they're who I have a few that do you somewhere in the twelve after thirteen range, I came up with that one it's based on the cost of my actual materials, it's based on labor, adding that into it, and then it's also based on the fact that you need to leave space so that you could wholesale. So you kind of like one of the resource is, I believe I given in the thing is this so maker software and what's amazing about that software? Is it you put in all your ingredients, and it tells you exactly how much each bar costs? Well, so even when you're forgetting ingredients like you get to enter all that you get to insure you enter all the information you put in your recipe, and it tells you exactly now, that doesn't include labor or any overhead expenses, but you could develop, you know, you can add in, like twenty percent let's say to cover those two things, and then from that point, you're going to want to double it potentially to get to wholesale, you're wholesale price and then double that price to get teo retail price, give or take that's a very rough estimate, people do it differently need to spend depending on like if they want to get a distributor, if they want to use the sales reb all of those things you have to sort of decide, like, how much of a cut can I have taken out of this where I'm still profiting. So manning and exactly exactly how if you found your wholesale accounts good question he also sell to hye ri sort resorts and hotels you know, I don't have any resort hotel a client, I have some bigger retail, you could get him, I could I talk to some hotels, I've talked to some hotel, so I may have some hotels that things work out next year we'll see. Spaz yeah, you know, some some products are really great for a spawn market and I know people who almost primarily just sell to spot and that's all they dio so as faras getting wholesale customers. When I first started out, I hadn't actually wanted to do a lot of wholesale. I was like, I only want this to be like ten or fifteen percent of my business and then as I got going is like actually kind of like this, I'm into it, it makes sense for me and so I decided it's more like a sixty forty split now, so getting wholesale customers um, you know, one thing is going to event that's actually where I got my very first will sell customer was I did a little craft show and it just so happened that a buyer from the store that I wanted to be in when I started my business came by she was like, oh, these are really beautiful I work in a shop, you know, I think maybe these would work in our store and I was like, oh, what's the store called should I go with pakistan gate? And I was like, I want back to the gate using that internally I was trying to be really cool and like, oh, yeah, I've heard of that store before great store so that's how I got my first so I think events are actually one of the places that I get a lot of wholesale being on the hand crafted. So guild website is another one being I'm in a professional organization in san francisco called sf made that helps it's kind of like having your name and all these places being on the san francisco green business website on ben also having a really beautiful web site helps and so I have a space on my website for wholesalers to actually contact me specifically so it's kind of like a mishmash of things and then also being really involved in social media has actually gotten me how do you find social media do you think it's fun or tiresome? I think some aspects of social media are really fun I'ii instagram I find facebook and twitter to be just a little more cumbersome for me but in pinterest I like pinterest I have heard time getting pictures is actually one of your business tools though so he talked about it in the podcast but interest is good for business even if even if you're not using it specifically to generate totally you know what a really good friend is because I did I put it on there because I used it a lot when I rebranded toe help get inspiration for packaging and then also you know it's another place to sort of tell your story and have people if they're finding your business they want to find you in every possible place that they can see you really need to have a presence there so I like it for fun it's fun and I have gotten some business from it to it's just it's one of the ones that doesn't feel is natural to me as instagram does like I snapping a photo posting that futzing with it great I'm good we have a question just need some clarification really alana s so it's really asking about when you're wholesaling when you do you sell then your products for certain price to candy then sell them or whatever price they like well do you then make up also, a percentage of whatever their price increases. How do you you approach that? Ok, so I think I get the question so I I only the only limitation that I put on potential wholesalers is that they cannot sell for below what I sell for whatever my suggested retail prices, they ever need to mark it down. First tale that is fine ten, twelve bucks a week, and they can market for sale that's the one of my little caveats in my wholesale thing is like, if you're doing unless it's for a special sale and then you can mark it down, but I don't put a cap on how much they want to sell it for, because if they think that they can get one million dollars, then fine, I'll let you election go for a million dollars, but I don't get any I don't change my wholesale pricing based on that. The only time I've had to change it is occasionally when you have to factor in things like freight, but super complicated question and sanders asking, do you ever get stores or even people asking to custom make things? And do you go there or did you really just stick to what is your product? So ideo and I, it will entertain the idea, so when I first started out, that felt difficult. I'll be honest that felt really difficult like that was like well I'm just trying to get this going I don't know if I can incorporate that now that I've been doing it for a little while I entertain that but I also understand my limitations and I also try and make it really clear with people that I'm talking with you know that there are things will change pricing will change those things are going to be different because I'm doing something custom potentially for you so yes I do sort of but I haven't really done a lot of that work I have a friend who's gave out soap tio their wedding guests at their destination wedding which was on an island and it was key lime and mango or something and I thought who hey just so you know for you to do this to get like so specific about some part of your relationship but you also have several products that you only have that certain times of the year for example of somebody wanted a lot of this chai yeah so which I am really interested in like this is the time of the year to get it yeah so what how do you make those decisions based on what you're doing or does that allow you to experiment? Are you trying tio is they are using it as a test to see if it's something you should carry you around or does it definitely just say holiday to you? So that's, why you have it at the holiday time? So I mostly do it because I like to mix it up, right? Like, I like to have something new and also customers want something fresh and new, but but, you know, I have to kind of keep my standards and my solid guys there, so I developed them because it gives me customers something new. They're really fun, it's fun for me to develop and think about the season and what things I like around that season. So in some ways, it's a little selfish because I get toe, be a little more creative and come up with something new but it's great, because it's around a specific time period and then it's also it creates a sense of urgency for customers because it's, you know, china's only hear from october to january, so you got to get it now, right now. So if you're making a custom order, those some, some things that you would need to think about would be how like a minimum that they would need to order in order for to even be worth your while to make right? Yes, playing other things you would think about if you were going to custom custom sent, you know, one thing is a minimum. What what makes sense for you to make what your smallest or maybe it's your largest batch size is. And if you were going to go through the effort to do it, do they have to buy that whole thing or just part of it? Another thing is, you are taking time to develop a cent for somebody who just got out that yeah, long time, your time, and so you need to building some sort of costing, you know, some people do it differently. You have, like, a set charge and you get, you know, like two or three generations, and you have to choose from that, and some people do more of like they add in a little cost, you know, on top of and then the other thing is, what if they want some ingredient that you've never worked with before? You may have to spend some time practicing with that ingredient, particularly in soap, making it to see if you can even incorporate it on dh there's research involved in that I would have to make purchases for family and it's also packaging. Are they going to get packaging that has your local on it, where does it just have their logo? Are they going to hire the graphic designer or do you have to cover those charges? Are you going to be printing those labels or they're going to be printing of labels? Are you going to be packaging the product or they're gonna be packaging of the product you yeah, but those are things to think about because some people build their businesses all around doing custom work like favors I mean perhaps the person that your friend got them from all they do maybe is custom one of a kind they might or they just do something that's like you know set sense for different weddings but anyway, those are a lot of factors a lot of it is time time time, materials money keeps slipping into future yes, exactly. Do you have any last questions? Right with this last question? Sort actually from leela barca neil is asking what has been your greatest struggle as a beauty start up on what advice would you give other beauty companies who may be moving through the same struggle? Well, first I'm gonna say hi, leela, what was the biggest struggle? You know, I think one of the biggest struggles that I had starting out was confidence confidence in my ability tio actually have a business confidence in my ability to develop a product that people would want and then you know, taking that through and pushing the business forward and ford without having the knowledge and so my advice would be to somebody is, you know, do the best that you can to push past those fears that you have about failure about not being successful about because we all have some business failures and successes that's a part of being in business like not everything is going to be perfect every time. And so I think it's really important to just, you know, keep your eyes on the prize and keep going for it. I mean, you should be mindful if things are really, like, turning down a bad road, but but I think that one of the things is is a lot of what holds us back is our fear, our fear of success and our feel of fear of failure, I think it's both oh, for sure, yeah, I think it's both we got a great coming from a slice of delight. Say I'm just so impressed with alana watching her from the periphery in the bay area. I'm just so excited that she was the guest today and I need to learn a lot here. So I hope you did a slice or two, like thanks for comin. Lana has been great having you with think for having me.

Class Description

Small batch beauty products spark the interest of sensitive consumers and shoppers who like to know where the products they put on their body came from. Soaps, lotions, and other beauty products are experiencing increased demand, and Kari Chapin will teach you all about selling to this burgeoning market in Fast Start Your Handmade Soap Business.

In this class, you’ll get a fast-paced introduction to the mechanics of starting a handmade bath and beauty business. You’ll take a behind-the-scenes look at a thriving bath and beauty business as you learn the ins and outs of selling both online and in stores. Kari will discuss the special obligations beauty product makers have to accurately and thoroughly communicate about their products. You’ll learn about:

  • Visually balanced packaging and labelling
  • Including important legal disclaimers
  • Building a vocabulary for describing scents

No matter what type of beauty product you create, this course will equip and inspire you to build a one-of-a-kind business and share your handmade goods with the world.

Check out Kari's other Fast Start Classes:
Fast Start Your Jewelry Business
Fast Start Your Sewing Business
Fast Start Your Paper Goods Business