Don't miss next month's "Business Wise" column ... Barbara Brabec will tell you what you need to know before entering your first wholesale show.

Some craftspeople begin selling their work retail with a vision to eventually sell wholesale. Others simply "fall into wholesaling" when a retailer approaches them at a crafts fair.

Some do both. Cloth doll designer Gail Platts set her retail prices with wholesaling in mind so she would be ready to sell wholesale when the timing was right. Her first accounts were acquired at craft fairs when interested retailers approached her. Later, she expanded her wholesale base by doing The Rosen Group's Buyers Markets of American Craft shows in New York and Boston, in an effort to develop a steady, year-round income. "Wholesaling gives me income in the months when there are no craft shows, especially the 'mud season' of January to May," Platts says.

Entrance into the wholesale market can happen in many different ways. Potter Emily Pearlman's foray into wholesaling began in 1987, after selling at retail craft fairs for seven years. Her involvement in a local co-op gallery brought her to the attention of her first wholesale buyers -- shop owners who were sales reps as well. "They helped me develop my line, and I've never regretted making the switch," she says. "I love having just about everything sold every time I open the kiln. Retail shows were getting to be a drag. If I made blue mugs, people wanted green. If I brought pitchers, they wanted platters. And they were always trying to get me to lower prices or give them a discount because they bought two of something."

Barbara Brabec invites contact from readers who would like to be interviewed for this column or one of her forthcoming books. Visit her Web site www.barbarabrabec.com or e-mail her at: barbara@barbarabrabec.com.

Getting started

Should beginning sellers get their feet wet gradually by first trying to sell to a few shops, or should they start by entering a big wholesale show?

"I started out selling through shops first, then went to trade shows," says Platts. "Testing the local market a little before jumping in with all the expense and stress of a trade show is a good way to start."

If you feel ready for the big time, however, Pearlman says, "There is nothing like a major show to see how your work stacks up with others in terms of craftsmanship and pricing, to see the reaction of buyers to your work, and to gauge how well you have developed your line."

"Wholesaling is 'where it's at,' financially speaking," adds calligrapher Michael Noyes. "The benefit to wholesaling is that you multiply the sales force. I used to wonder why a craftsperson would pay twice the booth fee simply for the privilege of selling at half price. The answer is simple: At a retail show, your work is being sold in one location by only one or two people. However, by selling wholesale, each additional sale means your product will be sold by an additional sales staff in an additional location."

Will it be too much?

Of primary concern to most craftspeople is their ability to fill the potentially large number of orders they might get from a wholesale show. "That's always a worry," says Platts. "I have to constantly remind myself that I can always say no to an order if I find myself getting swamped."

Even for retail shows, the professional artisan has to know what he or she can produce in a given period of time and be able to set up a production schedule. Thus, selling wholesale doesn't necessarily mean producing more work more quickly; it only means having the right prices to make a profit on items you're offering at wholesale.

Also See "Your Business -- Your Schedule" by Paula Chaffee Scardamalia.

Pricing perspective

Many sellers who once thought they couldn't wholesale because of pricing issues have learned otherwise. Sometimes moving into wholesaling might be as simple as changing the heading on your price list from "Retail" to "Wholesale."

It was wholesale show promoter Wendy Rosen's comments on pricing that actually motivated Pearlman to move into wholesaling. In a talk she presented, Rosen emphasized that most craftspeople are selling at discounted prices to begin with, and that true retail prices are not the retail prices at most of the craft shows, but rather what one finds in stores. "She challenged us to look at what craft stores and galleries charged," says Pearlman, "and when I did that, I realized my prices were too low."

While it is always important to compare your prices to the market, Rosen stresses that your price must include your cost of sale (COS). This means you must measure all costs for that show against all sales for that show.

As woodturner Derek Andrews has learned, the costs related to wholesaling automatically prompt price increases. "I quickly learned that it costs me money to make a sale, whichever way I do it, and that I had to raise my original prices. My spurtles (sticks for stirring porridge) have doubled in price since I started. In general," he continues, "I find that sales are not that price sensitive. If someone really wants to buy something from you, they are probably willing to pay a fair price. The bottom line is that you have to price for profit, and if the product doesn't sell at that price, then you might drop it."

After a period of time doing wholesale shows, Rosen adds, your COS is reduced dramatically due to the fact that you can spread the show costs over all the reorders that come in many years after you participated in the show.

RESOURCES

Michael Noyes highly recommends The Rosen Group's Craft Business Institute (CBI), held every September in Baltimore, Md. Contact: CBI (800) 642-4314 The following books, available in bookstores, contain helpful pricing and wholesaling guidelines: "Crafting as a Business, Second Edition," by Wendy Rosen (The Rosen Group, Inc. 1994), $19.95 "The Crafts Business Answer Book" by Barbara Brabec (M. Evans, 1998), $15.95 "Creative Cash" by Barbara Brabec (Prima, 1998), Sixth edition, $16.95 "Homemade Money" by Barbara Brabec (Betterway Books, 1997), Sixth edition, revised, $21.99 "How to Survive & Prosper as an Artist" by Caroll Michels (Owl Books, 1997), $14.95 "The Crafter's Guide to Pricing Your Work" by Dan Ramsey (Betterway Books, 1997), $16.99 "The Basic Guide to Pricing Your Craftwork" by James Dillehay (Warm Snow Publishers, 800-235-6570, 1997) $16.45, including priority shipping Artist's Web Sites: Emily Pearlman, Pottery: www.humanarts.com/craft/1061/index.html Gail Platts, In Calico: www.incalico.com Derek Andrews, Woodturning: http://members.tripod.com/~sunrisewoodcrafts Michael Noyes, Calligrapher: www.michaelnoyes.com

Getting help

The only way to wholesale without hiring outside help is to limit the wholesale portion of your business. That means you must make a production plan to figure out exactly what your capabilities are. "In wholesaling, so much depends on the products you sell," Andrews emphasizes. "In my case, 90 percent of the cost of my products is in my time. Since I know how much time I have for production and how much I can produce, I know what my production limitations are. Sometimes I have to turn down orders I know I can't fill."

Andrews doesn't want his wholesale orders to increase much more than 20 percent of his current sales because, he says, "That would mean chaining myself to the lathe, churning out the same stuff day after day. I enjoy the challenge of finding more profitable markets, and the time spent selling is a welcome break from the workshop."

Noyes believes that the key to success in wholesaling is to maximize production. "To do that, you need to multiply the workers." he says. Not every craft business owner can find capable employees these days, however. Since Noyes is not yet set up for maximum production, he won't be doing any wholesale craft shows to bring in new business beyond what comes to him through his Web site or regular marketing efforts.

When do you know you need help? "When you have more orders than you can manage without an additional pair of hands," says Pearlman. "And by the time you have more orders than you can handle, you don't have to worry about having enough money to pay for outside help if you've priced your products right to begin with."

If your wholesale business does increase and you hire outside help, how can you retain the hands-on artistic control you feel is necessary without actually doing all the work yourself? Each business owner will develop his/her own method for retaining control. Pearlman has given her two part-time assistants the non-production parts of her work, like packing and mixing glazes. "I keep all the wheel work for myself," she says. "I've also devised ways of working so that the final piece retains my handwork; i.e., using press molds that I have thrown so that the final piece retains the same look."

Advice for newcomers

Pearlman stresses the importance of having a coordinated line of products. "Be careful that you don't offer so many colors and choices that buyers are confused," she says.

"Be sure that you like to make lots of the items you decide to wholesale, and that the artist in you won't balk at being told to make 20 blue ones," cautions Platts.

"Be sure wholesaling is right for your business and type of work," says Andrews. "Personally, I don't want to end up managing a factory. I'm quite happy just earning a living from my craft rather than creating employment for other people. I think wholesaling works best if you have a great idea for a novel product that is fast and easy to manufacture."

Noyes received some valuable advice from a friend in marketing who asked him how many mistakes he had made lately. "I said 'one or two,' and he said that wasn't enough," Noyes stresses. "To be successful, he told me, we need to try new things and take risks. If we're not making mistakes, we're not experimenting enough with new ideas. It makes sense! Afterward, I thought of several more mistakes I had made, so maybe I'm on track after all."

Barbara Brabec is the author of several small-business books, including "Creative Cash," Handmade for Profit" and "The Crafts Business Answer Book."

JUNE 1999:

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