Y’all. It’s been a minute since we’ve chatted; I am sorry. Life just gets busy, you take tropical vacations, hold brand new nieces and sometimes, just sometimes you have to put in 53.5 hours at your 9-5 that pays the bills. Now that life is slowing down, well actually, let’s be honest, does it really ever slow down? Now that things are stabilizing more & I’m taking control of my life again, I want to talk about how to make your first (& all future) wholesale orders a success!
I had no idea what I was doing when I first ventured into the land of wholesale-ing. That’s a word, right? It took a ton of research, getting burned a few times & a lot of trial and error before I got it right. So in the heart of community or competition, I want to share all things wholesale with you to help make your experience a success!
Please understand I am not a lawyer and do not know if this contract will hold up in a court of law. This contract is meant to provide expectations between buyer & seller
Consignment vs. Wholesale
Let’s set things straight first. There is a pretty big difference between selling wholesale to someone and selling consignment with a shop, so it’s important to know those differences before committing to either.
Typically smaller shops like to have products on consignment. This basically means you are having the shop sell your products and you will receive a percentage of the sales after it is sold.
For example: Most shops I have done consignment with have a 60/40 split with their artisans/shop vendors. Meaning, once the product sells, the maker will receive 60% of the amount the product sold for and the shop will keep the other 40%.
Each shop does this a little differently. One shop I am apart of asks me to price all my products myself, meaning I come up with how much each product is sold for in the shop. One shop asks how much money I need from each product to continue to sell in their shop. Both shops do a great job in communicating how their process works. It’s best to ask for a contract or information about how they run consignment in their shop before getting into something you don’t have much information about.
I’ll be the first to admit I was really intimidated when I got my first wholesale request. I had no idea what I was doing. It can be a tricky subject to navigate if you’ve never done something like that before, but with the help of my friend Google, it turned out to be pretty successful! Let me just say, Google is really an entrepreneur’s best friend. Have a question? Ask Google. Chances are someone has had the same question and found an answer for it.
So what does it really mean to sell wholesale? If you sell wholesale, you are selling to a shop or company at a discounted rate so that they may carry & sell your goods in their shop/company.
It’s important to know how much it will cost you to make each of your products. Like down to the cent per item if that’s possible for you. Have questions about how to price your products or how to come up with that number? Check out our previous blog post! Why is this important? You need to know you’re making enough money to cover expenses & be able to produce another product when you sell wholesale.
So what’s the difference between selling on consignment & selling wholesale again? The biggest difference to keep in mind is that when you sell wholesale you get paid before you’re products sell! Consignment, you’re waiting for them to sell.
How do I get started?
Do you remember syllabus week in school? For those of you that have no idea what I’m talking about, it’s the week or few days that your teachers/professors passed out their expectations to you. Think of your contract as that! A handful of my professors read the entire thing to us to make sure we didn’t miss anything, but ALL of my professors included a section that said, “I reserve the rights to make changes to this syllabus at any given time.” This my friends, is the most important part of your contract!
Like I said, when I started selling wholesale, I literally had no clue what I was doing, but my first wholesale order went great! It wasn’t until my second one that I realized I really needed to outline my expectations. I found my friend Google to be super helpful once again when I decided I wanted to write up a contract/agreement! Find the contract below!
Personally, for Ash & Ivy, I found that the most important part of my contract to be the payment information section. Let’s break down what this section of our contract includes a little bit…
- We only accept Pay Pal or Check for all wholesale orders. This helps keeps things easy & track-able.
- We set the expectation of how many days the invoice must be paid in from the date it is sent. This keeps buyers accountable! If we don’t set the expectation, we know it tends to get pushed to the back burner & if it’s pending it takes away from other orders we may need to fill. Payment = priority — once we receive payment, it’s at the top of our priority list.
- We require orders to be paid IN FULL BEFORE production. This is so important to us. Have you ever started an order, gotten it done & suddenly your buyer (large company or individual) falls off the face of the Earth or backs out? We want to avoid this happening & honestly, avoid our time and resources being wasted! So after payment is made, we know there is a commitment made between our companies.
Shipping & Handling
Okay, okay. I know I said pricing was the most important, but this is pretty important too! This section should clearly state how many days it will take to complete the wholesale order & any shipping information.
- Ash & Ivy ships within 10 to 14 days of production, this does not include weekends or holidays. Like a lot of businesses, we choose to keep our weekends family oriented, so we operate based on business days. It may not work for everyone, but that’s what works for us!
- We also have a little compromise in our contract. We agree to insure the package(s) that are shipped, but we require that the buyer pays for shipping. This leaves us with equal responsibility to ensure the packages arrive safely & to the correct location.
I should’ve just said that everything in the contract is important, because clearly communicating your requirements is also huge!
- We require that at least 20 units of each product are purchased in order to quality for a wholesale order. For us, 20 is a good number because it makes our time worth it to create for a company & is still a pretty small amount. Any less than 20 we are not able to sell wholesale.
- We also communicate clearly that any orders over 50 units of the same product MUST be approved first! I work full time so this is what works for me. Can you imagine working 40 hours a week plus producing 50 products? If you can do it your are literally superwoman! So it’s just best to openly communicate what your expectations are.
Time to Fly!
Now that you know what works for us, find what works for you! Feel free to use our contract as a reference when you’re writing up your own. Don’t forget to include a spot at the bottom that your customers can sign their name stating they understand & agree to abide by the outlined expectations!
Have questions about writing your contract? Don’t hesitate to reach out to us on social media or leave a comment here!