How Wholesale Works

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For the first two years of our business, our products were sold directly to consumers through our website. But as word got around, buyers wanted to work with us to sell our products in their stores. Now, we work with over 250 stores in 15 countries including small boutique shops like Norman & Jules and Nora, art museum stores like The Cooper Hewitt and SFMOMA, and larger companies like West Elm and CB2. 

This week, I wanted to breakdown how the wholesale business works in the gift & home category. If a brand has the ability to produce their product in high volume, wholesale can be a great tool for increasing sales, product recognition, and growing your customer base. Simply defined, wholesale is the practice of selling a product at a reduced rate in bulk to a buyer, who will then resell it in-store for its market price. 

There are a few ways to get products into stores. But before a brand starts this process, it’s helpful to have pricing information and a digital catalog ready to go. Let’s break it down!

Wholesale Pricing:
Since buyers purchase in bulk, they expect a significant discount in order to be able to make a profit when reselling at the retail price. In the gift and homewares industry, wholesale pricing is typically 50% of the MSRP (Manufacturer’s Suggested Retail Price). For example, our Turbo Flyers cost $20/unit at MSRP. Buyers purchase them from us in bulk at $10/unit and sell them at $20/unit, earning them a profit of $10/unit. Wholesale pricing marked as 50% of the MSRP is also often referred to as Keystone Pricing.

Wholesale Catalog:
A wholesale catalog showcases a brand’s product line for buyers to review. Typically, it’s available in both a digital and printed version, though starting with just digital can help keep costs low. Most catalogs include product images, information about the brand, the team and mission behind it, pricing, lead times, ordering processes, and the best way for a buyer to get in touch. Catalogs are a useful, succinct way of showing a brand’s mission and products over email or in person, and a great takeaway for buyers to keep.

We produce our own catalog in-house using Keynote, but you could also use a program like Adobe InDesign or even Word. If a brand participates in trade shows, know that buyers will expect a new catalog each season. Most brands, including ourselves, create a wholesale catalog twice a year – one for Spring/Summer and one for Fall/Winter.

Contacting Smaller Stores:
We love working with small, well-curated local shops across the US! As your brand grows, you may be looking to increase your list of retail partners. Smaller stores are often receptive to direct contact. Many shop’s websites have a section that clearly defines if they accept product submissions, and what their preferred method is. If this is not available, start with a simple email. Research the story of the owners behind the shop, the products they sell, and write a kind personal note about why your product is a great fit. Don’t forget to attach your brand’s catalog!

If you don’t hear back, feel free to follow up a week later. After that, let it go until you have a new piece of information to share. Another way of getting a product in a buyer’s hands is to send it in the mail. We’ve had success in sending samples with a hard copy of our catalog and a hand-written note. But don’t take it personally if the buyer isn’t interested.

Working With Large Accounts:
There is a level of complication with large, big-box stores that is quite different than receiving an order from a local shop and shipping your products directly to them.

Every large account we've worked with is different and has their own rules, regulations, product testing processes, and backend paperwork. I recommend waiting to pursue larger accounts until your production capabilities are truly top-notch, and you’re able to ship large quantities on a deadline. You may even want a designated team member to handle account admin (it’s more time consuming than you’d think!).

If your brand’s goal is to have your products on the shelves of a massive retailer, the best chance of meeting those buyers is at a trade show. 

Trade Shows:
Trade shows are large-scale buying events where brands showcase their products to wholesale buyers. In the gift and home industry, the largest show in North America is called NYNOW and it takes place at Javits Center in Manhattan twice a year. Many companies also show at the Atlanta International Gift & Home Furnishings Market and/or the Las Vegas Gift & Home Market at World Market Center. There are also many international trade shows, which we may discuss in a future post.

Though trade shows are all over the country, the set up is typically the same: a large building full of small booths for each individual brand to elegantly show off their wares. Buyers come from around the world to find inventory for their stores, and are always looking for what is new. Most smaller stores may send one representative, usually the owner of the store, while big-box retailers often send full teams.

If your brand is not local to the trade show’s location, there are two main options. (1) Ship the product line to the venue, fly in a few days before, build a booth on site, and work the show; Or (2) Hire a sales representation company to handle the booth set up and sell the line on your brand’s behalf. There are pros and cons to each, and ultimately it depends how much control your brand is looking to have over their sales.

Sales Reps:
Sales reps are individuals or companies that represent brands. They sell a brand’s products directly to stores, and handle all communication on behalf of the brand. In return, they receive a portion of each sale – the industry standard for toys and homewares is a 15% cut. And if a brand is working with a sales rep company to show their products at a trade show for them, there are most likely additional fees associated with this, as the reps set up a booth, create a display for each line, and work the booth for the duration of the show.

Sales rep companies can be incredibly beneficial to a brand’s growth. Keep in mind that reps are focused on their collection of lines, not just one. Before signing on, look for a partner that already works with stores you feel are a good fit for your products, and that they have enough reps to properly aid in the growth of all the brands they work with. 

As you can see, there’s a lot to keep in mind as you start selling your products wholesale. Anything I didn’t cover? Reach out anytime to contact@taitdesignco.com to ask.

Thanks for reading!
Audrey / Co-Founder


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Audrey Elkus

Co-founder of TAIT Design Co.