Wholesaling is a solid business model, and a very stabilizing force for a production studio. The very nature of wholesaling tends to create steady business, smoothing out the seasonal ups and downs in income that result from only selling at fairs and festivals. Wholesaling sets the stage for repeat orders from retailers with whom you develop relationships, thereby growing your business.
Bringing this form of selling into your art or craft business as an income stream also complements other forms of doing business – selling online, retailing in person, taking commissions, and so forth.
Let’s drill down and take a look at some strategies for making your production business even more stable and profitable within the wholesale model:
Diversify your accounts. The bigger your account base, the better. As with the stock market, diversifying helps your business stay stable. When you sell to a variety of wholesale customers, you are less susceptible to being dramatically affected by the loss of any one account. For example, chain stores can be wonderful customers, bringing you large volume and growing your business rapidly. However, you should be careful not to become too dependent on them, so that loss of one of these large accounts doesn’t drag your studio business down.
Sell into different marketplaces. Niche markets are wonderful places to sell, and if your work fits into more than one niche, so much the better. You have choices – for instance, selling at different trade shows, networking with different groups, and broadening your opportunities.
Be careful with exclusivity. Granting exclusivity to wholesale accounts should not be taken lightly. When an exclusive is requested, make sure the commitment is sufficient from the customer to warrant this commitment. The size of exclusive territories may range greatly from one geographical area to another; for example in New York City an exclusive may be for a few blocks, where is more rural areas it may be a zip code area or larger. Don’t allow exclusivity to limit your ability to sell unless you have truly determined the worth of that arrangement.
Create different brands. Some studios create different brands, with distinctly different collections (and possibly different price points) which can be sold into stores in proximity to other customers while still protecting exclusivity arrangements. This allows you to capture a larger market share, with a win/win for all involved.
Use private labels. This involves creating work specifically for one store – with their name as the brand, not yours. Private labels work well with designs which are created especially for the retailer you are working with. This gives a true to exclusive to that store which will not interfere with your sales elsewhere.
Take a look at your own wholesale business. Can you identify ways to increase your account base, while keeping it secure and protecting your best accounts?