A lot of times when fresh-faced soapmakers jump into biz, they hear about wholesale and the first question they ask is WHY. Why would I ever want to wholesale my handmade soap? In fact, this is a question I get a lot.
It’s not a surprising question, really! When you consider that wholesale is typically keystone (50% off retail prices), that sounds like selling yourself short.
But in reality, there are many reasons why wholesale makes sense (and dollars!) for handmade soap biz owners.
Let’s start first with how wholesale can mean having more time for your biz and more money in your pocket to spend (or burn a hole, your choice.)
Wholesale = More Money + More Time In Your Pocket
Let’s say you make soap in 100 bar batches. The amount of time it takes to weigh the oils, make the soap, slice it up, and package it, is going to be the same amount of time no matter how it’s sold. However, the amount of time it takes to sell and ship or deliver all 100 bars at one time takes far less time than selling them one by one.
We’ll pretend it takes you 15 minutes to package an order. If you had 50 orders of two bars of soap, that’s over twelve hours of packaging orders to ship. If you received an order for all 100 bars, it would take you – what? maybe 20 minutes to pack? Yes!
Plus, the amount of time it would take to land a wholesale order for 100 bars versus market and sell 50 retail orders? Oh, my. Wholesale takes the cake.
So, how does that mean more money in your hot little hands?
Wholesale orders provide a higher cash flow in your biz. Instead of getting a $14 order here and a $11 order there, wholesale means landing orders of $400 or $800 or $1600 (or more!) at a time.
Even though the margins on product in wholesale are tighter (let’s say you make $1.50 per bar on wholesale, but $5.50 per bar on retail – which is probably less after labor costs for retail), the larger orders mean more cash coming in at one time. A single retail order of a bar of soap hands you $5, but a wholesale order of 100 bars gives you $150. What can you buy with $5 or $150?
Because you are selling more product at one time, receiving larger orders and have a higher cash flow, you can order in bulk faster and further machete the cost per bar down to ground zero.
Which does what? Increases the profit per bar!
Plus, your labor costs (you are paying yourself, right?!) go down because it takes less time to produce and turnaround product.
Another benefit to offering wholesale on your handmade soap?
You get to take advantage of someone else’s marketing dollars.
Wholesale is all about building relationships – long term and close-knit relationships. Getting tight with other retailers who love your products as much as you do means more people championing your products.
Of course you need to continue marketing your products on your own. However, when other places sell your product, they are also marketing their own storefront.
What? More exposure, more support, same marketing budget? Yes, please!
Want to hear why other soap makers wholesale, straight from their own mouths?
I asked a group of soapmakers on Facebook why they wholesale, because I wanted to share the real deal about why people wholesale soap. Here are some of the reasons soapmakers are wholesaling their handmade soap & skincare products:
Allows me to get more exposure than I could get for myself. – Navine Acevedo of Brosily Bath and Body
One can look at it as though you are paying someone else to sell your product. It is great for people who do not want to deal with the general public all day long to sell retail. You may sell to thousands through only a few clients. – Jodi O’Berry of Jodi’s Soapbox
Revenue builder; wider marketing exposure. – Cynthia Hill of Third Day Luxury Soaps & Herbal Gardens
I wholesale mostly for broader exposure and brand visibility. – Zikhona Tefu of Olive Real. Pure. Natural.
Less selling labor, faster product turnover, larger orders vs single bar sales. – Gretchen Moritz of Green Meadows Cosmetics
It’s a substantial foundation to grow my retail endeavors. – Charlene Simon of Bathhouse Soapery & Caldarium
It allows me to get my product into more peoples hands, capitalize on other people’s marketing and exposure. – Chris Erskine of Wax and Soapy Water
I wholesale with a couple of places simply to have a retail location where I can send local customers to. I do Farmer’s Markets and craft show during the warm months but in the dead of winter in MN it’s nice to have a “place” to send my local customers. The ones that I don’t know well but live in the same rural area as me. Those folks buck at spending dough on shipping. So I send them to my retailers. My products are getting sold one way or another….whether it’s through me directly or through my retailers. – Stacey Neuhaus of Feeding the Habit
How do I know if wholesale is right for my handmade soap & skincare?
I’ll cover that in the next post, I promise! Wholesale is not the one size fits all solution for all soapmakers, but it works amazing for most! Plus, I’ll talk about the basics of wholesale and common terms you need to acquainted with.