Wednesday, May 13, 2009

Are you thinking about wholesale?

Here is a great little post I found in the forums of Etsy world. Again, I haven't done wholesale, but who knows! Maybe I'll get approached by somebody =) Hope it helps.

Here is the link to the post where I found this great response at

A little about bluepiranha and her shop:
Design perspective: "From Simple to Simply Stunning". bluepiranha has been designing since 1993. bluepiranha technique is to saw, hammer, and shape metal into some awesome jewelry. Check out their blog See some pictures at the bottom =)

bluepiranha says:
You actually should know your wholesale price before you retail. Typically most retail buyers are going to want to pay 50% of your retail price - that's keystone, but in recent years most people find that retailers are marking up more than 50% of wholesale just to make ends meet.

For example, if you sell and item for $25, a buyer would likely expect to pay $12.50 for it. Assuming you are doubling your wholesale price to determine your retail price. But if a buyer picks up your work and they mark it up to 2.5, that's $31.25 that they'd sell it for. If you are selling it for $25, why would anyone buy from that retailer? That's known as undercutting and is a big no-no in the wholesale arena.

Each medium is different, but I figure my pricing as follows:
COG (Cost of Goods, or your materials) = $5
labor at 15 minutes to create (say you're paying yourself $20/hr) = $5
overhead (say, 20%, so in this case, 20% of $10) = $2
profit margin (say, 30%, so 30% of $12) = $3.60

Then add them all together. So, $5 + $5 + $2 + $3.60 = $15.60. This is the *wholesale* price.Multiply that times,say, 2.5, and you get $39. This is the *retail* price.

Most people implement either a dollar minium (say, $200) or a piece minimum (say, 10 items). Some people do both. The point of having a minimum (dollar or piece) is to be sure that the buyer has enough of your goods to display appropriately in their store / gallery. If they only want three pieces, most of the time that's not going to make a great display. They need to have enough to display so that your items catch their customers' eyes.

Hope that helps. Good luck!

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