What I learned from selling wholesale

Jenny Ford wanted to add some wow to her children’s days with fun footwear, and turned it into a business. Her line, Monkey Toes, can be found in retailers across the country. I spoke to her about the challenges of becoming a successful retailer, and she had plenty of tips you can use to grow your business.

How long have you been selling wholesale and why did you decide to do it?

I’ve been wholesaling for approximately 8 years (possibly more).  I decided to do it because it was an easier sell than driving people to my website.  Back when I launched (in 2002), purchasing products off the internet was not a common occurrence, people were afraid of giving out their credit card info.

Wholesale was also an approach to marketing as well – the more stores that picked up my shoes, the more people would see them, start recognizing the brand and hopefully reorder either in the store or on my website.

How do you find stores to sell your products to?

Initially, I did internet research. Because I am only one person and didn’t have the budget to fly to visit stores, I would go online to my favorite complimentary clothing brands, check out their store locator and send catalogs to the stores listed.  I’d then follow up with a phone call a week or two later to make sure they received it and ask if they had any questions. A year or two later, I recruited my first sales rep on the west coast.  She was able to give me good feedback on my products, what stores were saying (because they won’t say it to your face), pricing, etc.  This was really helpful in getting to know wholesale.

From your experience, what is the best method to contact stores?

Seems like there are so many methods.  If they are local, call and make an appointment with the buyer.  If they are far away sometimes email is best – the store owners are so busy, and many of them like you and me work at night or odd hours.  This gives them a chance to look over everything without major distraction.

My key advice is to follow up!  Many people send out an email and then sit and wait.  Again, distractions happen and they may forget all about your product, but may want to order or have questions.  Be organized and just take a second to send a quick note – do you have any questions or can I help you put together an order?  That’s it!  And you’d be surprised at how many people will respond to that.  Or make a quick phone call.  These days we’re so afraid of the phone, some of the old mom and pop shops operate primarily via phone so you must be able to adapt to all methods.

Do you attend trade shows and, if so, which ones?

I now have a major rep group which has showrooms all over the US and 90+ reps.  So yes, Monkey Toes is represented at all the major trade shows.  The Fall shows are Dallas, Atlanta, NY & Las Vegas.

Has the economy affected your wholesale business? If so, how?

It really did affect my business.  I lost a lot of my wholesale customers, but the good news was that my website sales went up and thankfully I had implemented drop ship through e-tailers years prior to the big economy bust which kept business going strong.

From your experience, what are the top three most important things to keep in mind when doing wholesale?  

Follow up, stay in front of them, stay professional.

Follow up: Send a quick note, or phone call to say I’m here to help you make money in any way I can.

Stay in front of them: Keep a record of every wholesaler who has contacted you and email them on occasion (through a group email program – I like Constant Contact, but there are many out there).  Send them a message whenever you launch new products, have a special promotion (don’t discount, but waive your minimum from time to time You’d be surprised at how many stores will buy above your minimum when you don’t set boundaries) or just to say Hi and we’re accepting reorders.

Stay professional: Ever hear of kill them with kindness?  YEP!  Kill them with customer service too. They’ll enjoy working with you.  With so many social media platforms to spill your guts…DON’T!  Keep it to yourself, or just talk about the issue with a friend.  There’s no reason to go public with rants – you’ll lose customers and credibility.  I see this happening all the time and think, would The Gap, or Zappos, or Apple do that, NO WAY.  It’s completely unprofessional and you never know who is reading.

How do you balance doing both wholesale and retail?

Wholesale takes up a lot more time than retail does, simply because of the quantities going out, and many larger stores have big requirements and expectations on the orders they are receiving. I’m in a unique situation because last year I signed a licensing deal, which changes the game for me.  I now just create new designs and run our retail website.  I don’t have my hand in the wholesale any more, unless it has to do with making decisions about it – even then, I’m not too involved.  But when I was involved I would give a lead time for wholesale – up to two weeks (our products back then were all hand painted and I didn’t always have the inventory on hand).  I would state that up front to the buyers so they would know.  Or we sometimes tried putting together an order from the inventory I did have in stock – some buyers were really flexible like that.  For retail, same thing.  I had a 2 week lead time, but a lot of orders went out within a couple of days – under promise and over deliver.

What are some mistakes you have made while doing wholesale?  

In the beginning I was too flexible, I just wanted to be in stores and it’s almost like buyers can sense that because they’ll try to take advantage of you.  In the beginning offered terms and COD, when the economy started to tank it was harder and harder to collect on these, I also noticed some stores becoming unethical too (not paying bills).  And I realized, being a one woman show, I am just not set up to handle the books this way or deal with collections.  I had to adjust and be willing to lose a sale over the terms.  I was okay with it, because I wasn’t willing to lose product and money over a customer here and there.

What do you wish you knew before you started selling your products wholesale?

To be confident in my policies.  Like I said above, don’t let people walk all over you.  You have a great product to sell, and you are trying to help the stores make money too, but you must stick to your guns where you feel you need to.

Anything else you’d like to share about selling wholesale?  

Oh I could go on and on about wholesale.  I consult a lot of small businesses on this, I think it is the area where new business owners have so many questions.  I think everyone wants to be in the box stores.  This is wonderful and a great goal to have, but you have to realize what comes with it.  And honestly, I’m not talking from experience, I’ve just heard from my friend entrepreneurs and many people who have worked with big box stores.  From what I’ve heard it’s more hassle than it’s worth, unless you’re at their level of course.

1. You MUST be set up to work with them (in most cases).  You need to comply with their technology and be set up with bar codes and any other capabilities they have.
2. They will charge you if you make any mistakes (called a chargeback).
3. Many big box stores will try their hardest to get the lowest wholesale pricing as they possibly can.  They are going to want your product heavily discounted, which can be tough if you lose money on top of chargebacks.
4. Don’t put all your eggs in one basket – this could put you out of business!  Look at it this way, you are ONE product amongst the store of thousands, they can drop you in a season and you’d be out a large chunk of change, and out of business.

My advice, diversify and nourish the relationships with the mom and pop stores.  There are tons out there who want to get their hands on your unique products.

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