How did you survive 2020? For us, it started great but very quickly when to crap in March. As the economy closed, so did all of our shows. Just like you, we were stuck at home just staring at the walls and all the inventory that we had ready to sell.
Unlike many small businesses, we were able to adjust. Monica works full-time and we carry very little debt related to the business. From March until June, we just kept our heads down. Of course, we could only tolerate being idle for a short time so we had to come up with a plan.
We had long considered wholesale and had started a few consignment accounts within our region, but they were unreliable in terms of income. We might get a check one month and then it could be months before we see another one. Additionally, with consignment, we had little control of our inventory in the store unless we wanted to visit. In many cases, the stores were hours away.
Previously, Monica had opened up an account on Faire.com. Faire is a wholesale platform that matches makers like us with retail stores looking for products like ours. Until now, we had listed a couple of products, but now that we had some extra time on our hands, we ramped up our presence on Faire.com.
For clarification, when I say “we”, I mean “she”. Yes, she did all the work on Faire. No, Monica didn’t make me write this but she is looking over my shoulder.
When we listed our product offerings on Faire, there were some things we had to consider. Faire buyers are not the typical retail buyer. A retail buyer from our Shopify website may buy 3-4 different things. We normally have enough inventory already made to satisfy the majority of our retail sales. Faire buyers are buying in bulk. They are looking for items to fill their shelves that their customers will want to buy. Because of this, they are buying a few different things, but they buy a lot of them. Instead of buying a single beard care kit, they buy 50 of them. Instead of one of each bar of soap, they buy 70. The biggest challenge was making sure that we could make larger quantities of our products and stay consistent with each product we made.
Also, in order to ensure that we were making some profit from the products sold, we had to adjust our pricing a bit. Our pricing was already based on the pricing formula in a previous post, but it needed revisiting and minor tweaks.
As the year wore on and retailers started to open back up, we started getting a lot more interest from our Faire account. This interest turned to sales and really ramped up in October and November as the Christmas season quickly approached. Remarkedly, our overall revenues are only a bit lower than last year’s with almost half our revenue from wholesale orders through Faire.com. It was a big step for us.
Selling wholesale through Faire, or any other website has its positives and negatives. Selling wholesale means that you are selling your product for about half of what you charge your retail customer. However, you are selling far more product per sale. Because of this, your pricing really needs to be dialed in.
Here are some other things that I have learned.
Negatives of Selling Through Faire.com
Most of these are true for wholesale in general, not just selling through Faire.
- You sell each product for less
- Faire takes a commission
- Your margins are much lower
- You never know if you can meet the demand when a sale comes through
- You will need bigger boxes to ship stuff!
Positives of Selling Through Faire.com
Again, most of these are true for wholesale in general, not just selling through Faire.
- You have no upfront fees.
- Your operating expenses are significantly less. There are no market fees, no travel costs, etc.
- You sell larger quantities of items.
- Buyers are willing to wait until the product is made – sometimes weeks.
- You are paid (net 30) for your product. You don’t have to wait until the product is sold to get a check.
- Shipping is easy through the Faire.com website.
- No market setup, selling or teardown.
- The biggest one for me is that I don’t have to market the product to customers. I leave all the Instagram and Facebook posts to the retailers.
If you haven’t considered wholesale as a revenue stream for the products you make, 2021 may be the time. There are lots of retailers out there looking for products like yours. One of the easiest ways to meet them is through a wholesale service like Faire.com.
Until we see you at market, stay safe and well.