5 Tips for Pitching Your Handmade Product to a Small Scale Retail Buyer

5 tips

Pitching your product to a retail buyer can be intimidating. Buyers are the gate keepers to brick and mortar stores. Offering your handmade product up to them for rejection can be terrifying.

Most buyers love it when a potential vendor approaches them. It makes their life easier. A happy buyer is often a repeat buyer.

These 5 tips will help you woo a new buyer and get your product on their shelves.

  1. Make Sure Your Product Matches the Store. If the store you want to sell in only sells imports and your product is ultra-local, it might not be a good fit. If your product retails for $100 and the highest price point in the store you approach is $50, your product probably won’t do well there. Find a store where price and aesthetic match what you make.
  2. Call Ahead. At many small shops, the buyer is also the owner or manager, which means that buying is just one of their duties. Do yourself a favor and make an appointment. Don’t cold call and risk catching them while they’re doing taxes.
  3. Make it Easy. Bring samples to show off your quality. Prepare a line sheet with your products, wholesale price, and MSRP are clearly listed and easy to read. If you have any promotional materials–brochures, handbills, business cards—include those. Leave the buyer with a physical reminder of why their customers can’t live without your product and an easy way to place an order.
  4. Be Professional. Think of it like a job interview. Be on time. Wear nice clothes. Show confidence in yourself and your product. Tell the buyer why they need your product in their store.
  5. Follow Up. If the buyer was receptive but you haven’t heard from them after a couple of weeks, call or email. Politely remind them who you are and what a great fit you are for their store. Chances are they got busy, and needed a little nudge to place an order.

A little preparation can go a long way to growing your business, so get that line sheet together and make that call!

Paying Yourself: The Simple Free Method for Tracking Income and Expenses in Your Handmade Business

Paying

Last week we talked about how to price your work to make a profit, but how do you know how much money you’re actually making every month?

You could invest in an accountant or in accounting software like Quickbooks, and if you’re working on a large scale with start-up capital, that’s a great idea. However, if you’re like me, you’re rubbing your pennies together asking yourself how you can track your income for free.

The answer is pretty simple: Google Sheets.

Similar to excel, but completely free, you can create spreadsheets to track your income and expenses every month. You can make your sheets as simple or as detailed as you like.

I have a set for my soap company, Tiny Dino Soapworks that breaks each product down by ingredient and cost so that I know exactly how much I spend to make each bar of soap and how far a new tub of cocoa butter should get me. But that only tells me where my expenses are going.

While you should know how you are spending your money, you need to contrast your expenses with your income to determine if you are turning a profit.

Tracking Your Income & Expenses

  1. Create a google sheet with a page for each month for the next twelve months, including the month you’re in now.
  2. Create a column for your expenses. Record every cent you spend on your business and keep the receipt. Even if you just drop by Michael’s real quick for some tissue paper and ribbon to wrap a shipment in, record it.
  3. Create a column for income. Record every sale you make. In person sales, etsy sales, selling a discounted lavender sachet to your grandma for $2–I don’t care who it’s to or how much it’s for, write it down.
  4. I would also include a column for sales tax next to your sales column, and including the amount of sales tax due on each sale. While this is technically part of your expenses, it is something you file with your state separately (how often and how much varies widely by state, so check in with your local government for details. For instance, if I’m shipping to a state outside Kansas, I don’t have to charge sales tax, but if I sell to anyone in my state, in person or online, I do have to charge sales tax. How much depends on the county I’m selling in or the county I’m shipping it to.) Mostly, this just reminds me to file on time, but that’s important too!
  5. Tally up your income and expenses at the end of the month. If you made more money than you spent, congratulations! You made a profit! You might not make a profit right away, but by tracking you’ll at least know where your money went and if you can make any adjustments to your spending to help cut costs.

PRO-TIP: Make the first page in your spreadsheet a summary of each month’s income and expenses so you can check your progress over the fiscal year. Create three columns for each month, one with overall expenses, the other with overall income, and the third showing how much you made or lost each month.

If you are looking to make your handmade business your bread and butter, you’ll need to go a step further than just tracking how much money you make. You need to take your profit and split it three ways:

  • 30% to taxes (this is income tax, not sales tax)
  • 10% to reinvest in your business
  • 60% to pay yourself

While the percentages can be tweaked depending on your needs (these are all just estimates), they are a good place to start breaking down your profit.

How to Breakdown Your Profit:

  • Say for the month of June you made $500 in sales and had $150 in total expenses, then your profit was $350.
  • You would save $105 of that $350 to pay your taxes with at the end of the year.
  • $35 would go back into your business for supplies or advertising, etc.
  • Write yourself a check for $210 for all of the hard work you’ve been doing.

If you eventually want your handmade business to pay your mortgage, start tracking your earnings now. Staying organized now will save you time and energy come tax time. And when you start growing, you’ll know exactly where your money is coming in and going out. Better yet, you’ll feel like a professional, and that’s half the battle to being confident in your business right there.

 

The Quick Guide to Pricing Handmade Products for Sale

Sell

In my other life, I am a niche retail buyer. I work mostly with up and coming artists or hand-makers just beginning to sell. A lot of them have no idea where to start, and want me to tell them what to do. Most often, I am asked for guidance on how to price their work for sale. That’s when, if you came to me for advice, I would give you my crash course on pricing.

How to approach pricing your handmade products for sale:

  1. Decide to treat your new venture as a business and not a hobby. You want to make this into your livelihood, so don’t undervalue yourself just because you do this in your spare time.
  2. Figure out how much money you need to make to live. Figure that number into your time when you’re deciding how much to pay yourself.
  3. Figure out how much money you need to stay in supplies. If you aren’t making enough money to cover your supplies, you’re done before you even started.
  4. Don’t forget about wholesale pricing. Yes, you might start out online or at craft shows, but if you want to get into a brick and mortar store, you need to be able to sell to them at discounted rates and still make money.

After you’ve adopted a business mindset and decided to pay yourself, sit down with this simple formula and figure out your pricing.

Simple Pricing Formula:

  • time + cost of materials = cost of goods sold (cogs)
  • cogs x 2.2 = wholesale price
  • wholesale price x 2.2 = retail price / MSRP

The wholesale price is what you would make per item if you sold to someone like me. Even if you are selling on consignment, do not go below this number. This is the lowest number you can sell at and still make money.

The retail price is what you sell your product for at art shows or the prices you give in your etsy shop.

MSRP stands for manufacturers recommended retail price. Stating your retail price as your MSRP when you sell to a buyer will keep consistency in the price of your products across all of your selling platforms. Customers like consistency. Whether they buy from you directly or from a store, they know they are getting a good product for a good price. Either way you win. The more they buy from you, the more money you make. The more a store sells of your work, the more often they will order from you.

When you take the time to set both retail and wholesale prices, you will end up making more money off individual sales you make directly, whereas with wholesale orders, you make money by giving a discount for large quantity orders.

More important than anything else is to remember to pay yourself. So often, budding entrepreneurs don’t feel worthy of a paycheck for doing something they love. Don’t fall into this trap. If you want to do something you love for a living, you have to make money doing it. You deserve a paycheck for the work that you do.

What’s next? Figure your pricing! How does it make you feel? Does the number seem too high? Too low? Take a few days and get used to associating worth with your work, especially if your business has been a hobby until now. Get comfortable with those numbers. Practice saying them without flinching or cringing. Do it until you can talk about your product with confidence. Feel your worth.

Is there anything you’re making that you feel is too expensive with this pricing structure? Tell me about it in the comments!