fbpx
Wholesale products

I get this question a lot from my clients because wholesale products requires the sharing of profits with the retailer, so the margins are lower in your business. While it isn’t right for every business, I have helped several clients with very successful wholesale and consignment lines of business that rapidly grew more income, greater audience following, and ultimately a larger retail base.  Here are a few reasons that wholesale and consignment can be great for your business.

 

Wholesale Products

 

 

Wholesale Products: Larger orders than individual sales

 

When any customer buys you should do a happy dance. But when a wholesale customer buys it’s a bigger order and a bigger happy dance. If a customer buys one, a wholesale order can buy 12. Even with the loss of margin, you have more volume, and you make more income.  Just make sure your numbers are right on the wholesale and retail prices.  Know your production, packaging, and labor costs.  I have several clients with retail margins over 60-80%, so wholesale margins are still beautiful even sharing 25-40% with a retailer.  Take the time to build a solid relationship. Give them the product knowledge and watch how your business customers begin to promote YOUR product when people ask for suggestions.

 

 

Wholesale Products: Introduction to their audience

 

And the reason you don’t mind giving margin to the retailer is… because you are being introduced to their audience! They are paying for their storefront, labor, overhead, etc., and you get to be an option for the customer base they spent time and money building.  They are making something, and you are still making something. It is a win-win. You get shelf space, physical or virtual, and the visibility.

 

 

Wholesale Products: Reordering more frequently

 

Another aspect of wholesale is that there are more frequent orders from the buyers. Individual consumers buy maybe a few times a year (depending on the product) but businesses are going to order as they are selling. A key here is to be organized and to be a great account manager. Know the business owner’s intentions with your product. Learn what is selling and what isn’t.

 

Again, build that relationship. Make suggestions, call, and ask for the reorder (don’t make them run out first), and for the love of all things holy, don’t take it personally if an item isn’t a hit with their audience.  The reorders from a business are generally larger than an individual order, so more volume, more income, more chances to serve the business owner and their audience.

 

 

Converting fans to direct retail

 

This happens frequently. After a time, the customer may begin to order directly from you, at retail.  This happened to us with the coffee business. People bought our product from a local store, then joined our Facebook group, then directly ordered from us.  I’ve seen this happen with several clients of mine as well.

Make sure to have your website or online store on your product label.  But please note: DO NOT undercut your wholesalers with deep discounts online. It’s very disrespectful and will cause you to lose wholesale business fast. The retail price is the retail price. If you buy from me, from them, or from the other them. The ONLY time I’d think about discounts would be if something is discontinued or you are discounting wholesale as well, the margin remains the same for the retailer.

 

One last thing, consignment can be a great way to test out a relationship with a potential wholesale customer. Offer to let them try it out in their business for a time, say 30-60 days, and after it sells out, you would be happy to have them as a wholesale customer. The difference is that on consignment you are paid only after an item sells. In a wholesale account the business customer owns the item once they are purchased at the wholesale price.

Financial Tips for Your Side Hustle

Here is the final installment in our “financial tips for” different industries—Financial Tips for Your Side Hustle. This article is for anyone building a business on the side of a full-time job or on the side of another business.  Creating a side business and growing it to allow you to replace your 9-5 and go full time into entrepreneurship is an exciting journey. Here are a few financial tips to help you make that happen.

 

Financial Tips for Your Side Hustle

 

 

Start Your Separate Personal Financial Identity immediately

 

From day one, treat your business as a business. Separate your banking, get a debit card for business expenses, and have all income from all sources deposited into the account. Just point your PayPal, Stripe, Square, or whatever you use to the business account.  Pay your expenses from that account. You will file a different tax schedule when you own a business. Keep receipts and treat it like the real business it is right from the start.

 

 

 

Have a Pricing Strategy That Gets You Into Profit Quickly

 

Many times, when entrepreneurs begin side businesses they start off with pricing that is often too low to make much of a profit. This can be because there is the feeling that the venture is for “extra money,” so making even just a little bit is “fine.” Yet, the best strategy is to be priced correctly from the beginning, so you aren’t just breaking even or worse, losing money with your side hustle.  You are in business to make money, and that means pricing yourself to include your real costs, your paycheck, and some profit to make sure you have capital for growth.  Follow this link (Mastering Your Cash Flow (kartra.com)) for my free three part pricing formula.

 

You don’t have to lose money the first few years in business. See this blog post (5 Tips for Maximizing Business Profits (entremoneycoach.com)) more tips to maximize your profits.

 

 

Set up for your Self-Employment Taxes and pay them at least quarterly

 

Part of treating your business like a business right away is to set yourself up to file your taxes as a business. In the U.S. if you are a sole proprietor that means a schedule C.  When you file that report of self-employment you will need to pay your self-employment taxes. Make it a habit from the start, and you will always be in compliance with the IRS. I learned this lesson the hard way, and ended up owing over $27k in self-employment taxes back the year of my husband’s accident when we lost our consulting business.  We did not set ourselves up, and taxes were an afterthought. Oops.

 

It’s easy to set up to pay your taxes online, visit https://eftps.gov and register. They have to snail mail you a PIN so it takes a few days to set up, but once you are enrolled you can easily make online deposits into your “tax account.” You should deposit 20-30% to start, based on your other job, tax bracket, etc. Visit your accountant to figure out exactly what is best for your situation. But just do it. I withhold when I take a paycheck, I don’t even wait for quarterly anymore!

 

 

If you are going to scale and leave your 9-5 have a plan

 

As you are scaling and building your side hustle to become your full-time gig, I always recommend having a plan. It won’t be perfect, and it will probably change, but you should know your numbers, have some money squirrelled away, and keep debt down so that the payments, if any, are manageable on your new entrepreneurial salary. Plan your income and profit each quarter, knowing how much you need to make to pay everything, including yourself.

 

And know that sometimes businesses take off faster than expected, sometimes they take longer.  Have a real conversation with yourself around what the minimum number of sales or clients you have to consistently have to make a move. It doesn’t always have to be a calendar date! Make your plan around events that happen inside your side hustle and celebrate every milestone.

Make More Sales

It is so much easier to make more sales and sell products and services to an existing customer than it is to try and find a new customer. In fact, there’s something called the “80/20 rule” that states 80% of your sales will come from 20% of your audience Once your customers and fans are in your world, they are more eager to buy your offerings than a cold or even lukewarm lead.

 

Make More Sales

 

So, how do we make sure we are serving and selling this 20%? By making sure all of your offers will be a good fit for your audience, give them multiple ways to buy from you, and giving exceptional service that will win you loyal fans.

 

 

 

 

Making sure your offers are a good fit

 

Nobody wants to be in the awkward position of offering something that no one wants to buy.  It’s important to talk to your customers, get feedback on your products and services. Don’t be afraid to run a beta test or provide samples of your new thing to your audience. I don’t suggest you give things away to just anyone. Have a way to qualify your customers, and when you find them, get their input on what you offer.

 

For example, I have a signature 6-week group program to help entrepreneurs grow their revenues and profits by focusing on one plan for a short time.  This particular approach didn’t work for one of my clients, who felt that the every-week meeting was too quick to allow her to implement the next step in her plan.  She wanted two weeks between meetings to give her more time to work on her plan. 

 

This request created a 12-week program and is a great fit for certain businesses who need to focus on growth over a quarter. By taking the time to listen and adjust my offers, she works with me over and over when she needs support with her business growth.

 

 

 

 

Multiple ways to buy from you

 

If you offer handmade organic body lotions and scrubs can your customers order in both full and gift sizes? Will they fall in love with your product? Are there gift options that would allow them to ship it to a friend? This is one example of how you can create multiple reasons your customers should buy from you.

 

In the service sector, do you have an “offer ladder” with related and logical offers for your customer to take advantage of? How about a mix, like a course and a live program? Take a minute and think about the logical ways people would benefit from working with you through multiple sales.

 

 

 

 

Giving exceptional service with every sale

 

If you want to keep the fans coming back, you have to give the most amazing service. Ensuring so, they feel well taken care of. 

 

Drop the extra note, send the Voxer, follow up on their delivery.

 

Put a card in your package.  Send a gift. Answer the email. Jump on a call.

 

There are a million ways to let your customers know that they are important to you.  If they feel good, they will continue to buy from you.