The Bare Necessities of Wholesale Magic
It's not as hard to get started wholesaling as many soapmakers think!
There are some bare necessities of wholesale to get you started on your path to selling your handmade soap & skincare products to retailers. After that, there are bonuses and extras, but they aren't necessary to jump in with both feet!
What do I absolutely need to wholesale successfully?
You can start working your wholesale magic pretty quick, so let's dive in:
To sell your products wholesale, you need to have a solid understanding of your COGS!
Not just a rough idea, not an educated guess, but a solid and thorough concrete number.
If you remember from the Wholesale Primer, your COGS are the cost of goods sold and it includes every single cost that goes into creating and selling your products. This includes your raw materials, packaging, labor, and overhead.
Your raw materials cost includes the straight cost of the ingredients, including the shipping cost. The packaging is the same, it is the cost of your product packaging components and the cost of having them shipped to you. Soapmaker 3 is great for getting a good handle on your raw materials and packaging costs.
The labor includes every associated labor cost, including adding shipments of ingredients to inventory (some include this in their raw materials + packaging costs, that's fine - just make sure to count it), weighing and measuring components of a batch, making the batch of soap, cutting the batch of soap, and packaging the batch of soap.
The overhead includes any associated expense of operating your business, including the facility, utilities, advertising, marketing, education, insurance, trade organizations, mileage, phone or internet, website maintenance, shipping materials, booth fees, and more.
In order to wholesale successfully, you have to know what you are spending money on, so you can price your products properly and make a profit. Otherwise, you may be enjoying a very expensive hobby. (Sadface.)
In order to fulfill wholesale orders with speed and efficiency, you need to know your production capacity.
And have a plan for scaling it!
If you approach Todd's Natural Food Market and they want to purchase 100 bars of your best seller, can you deliver? Do you have it ready and on hand? Can you deliver it tomorrow? Next week? If not, can you produce it and deliver it in a reasonable amount of time?
You must know what you can and cannot produce, the timelines of production, and have a very real idea of the labor costs involved for your COGS. If you need to hire help, can you? If you need to outsource production, can you?
Do not forget your raw materials here - how long does it take you to get your hands on ingredients you need?! Have backup plans for supplies that are essential to your business, do not ever rely on a single supplier if you can help it. What if they discontinue it? What if they are out of stock? This is especially important for ingredients like fragrance oils. ;)
And the next step for successfully selling your handmade soap & skincare wholesale? A strategy, a game plan, & a way to keep the score.
You need to have a solid product line, you can't make what you want when you want to. Customers come to develop favorites and expect that they can purchase them over and over. Every time you make a new product, you spend so much time developing it's packaging, taking photographs, writing copy, analyzing COGS, and so much more. A solid product line allows you to more efficiently manage your time.
You need to know what type of retailers your perfect customer shops at so you don't waste time chasing retailers that don't fit your brand. Create a spreadsheet of potential accounts, and another for current accounts. Stalk them all. Without being creepy.
You need to have a detailed strategy and plan for how you handle the ordering process so that you can lay out terms that make sense for your biz. There are so many times I've seen soapmakers ask in a Facebook group about how to handle net terms, or short shipped orders, or requests for credits. Have your policies in place, and your plans for scenarios to the best of your abilities. It's always a learning experience, but having a game plan upfront makes it so much easier.
And lastly, to wholesale your soap, you need to have a way to communicate information to buyers for ordering.
An example linesheet created with my Microsoft Word template
The absolutely best way to give information to potential buyers? A line sheet, or catalog and an order form. It's pure wholesale magic right at it's core.
While a beautifully designed line sheet or catalog can make landing new accounts a breeze, everyone starts somewhere. If you need to DIY, it can be as simple as laying out a line sheet in Microsoft Word. (You can snag our line sheet template by joining us in Next Level.)
There are a ton of articles out there on what to include in a line sheet, including these fab ones from around the web:
If you are looking for a catalog example, here's American Apparel's catalog - catalogs are more creative and expansive by nature.
Do I have to do all these things to wholesale my handmade soap & skincare?
The short answer is no, no you don't.
A lot of soapmakers wholesale without a detailed idea of who they are approaching, how to handle ordering, their production capacity, or line sheets. It's not impossible to wholesale without these things, but they make it infinitely easier! Trust me.
Invest the time it takes to develop your wholesale program before diving in - it's worth it.
If you are still considering if you should wholesale, let me help you answer that with this article about why you should wholesale your handmade soap and skincare.
Do you have your wholesale program nailed out? Is there a part you are struggling with? Give me the lowdown in the comments below.
And if you think this might help someone, please share it!
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