Melissa says:

Really good question and helpful answer to boot! Cheers 🙂

Andy Mathis says:

In the wholesale business of handmade items, it is common to get a credit card payment for the initial order, and then set up net 30 terms on future reorders.

Nancy says:

One thing I’ve recently done is to offer store a discount if they pay at the time I ship their order but that’s as far as I go because wholesale customers are not open to paying up front. I do require a new customer to pay upfront (pro forma) on the first order and that is standard practice.

Unlike Sarah, I do not like sales reps. I’ve worked with a number of them over the course of 8 years or so and found a few pitfalls. First my work is handmade by me, the reps I’ve had just were not capable of presenting my work the way I can. Second, buyers of handmade works want to meet the artisan, that’s a whole part of the buying handmade ‘thing’. Third, a sales rep takes 15-20%…so you are selling wholesale and start with about 50% of your retail price, the rep takes 20% leaving you with 30% from which to pay for your time, materials and overhead and let’s not forget profit. (rep takes 20% of the wholesale price so this calculation isn’t exact but merely an example.) Not much of a profit margin there either way. If you are having your product mass produced overseas, cheaply, perhaps this model will work for you but if you yourself are creating each piece as I am, well….it hasn’t proven beneficial for me….

Hope that helps,
Nan

Jennifer says:

Hi Sarah and Shermaine!

Great question! Great answer, Sarah.
I am on the path of growing my brand with small stores and salons.
I don’t have a rep at this point, but would like to have one.

I DID once get a large order from a major retailer. It was very strategically planned on my part. I took out a line of credit and had it ready to buy the components and pay the filling company if the order came through. It did come through and they were willing to pay within 30 days with a 2% discount on the entire order. I went that direction.

Thanks for the great forum to explore new ideas and ask questions, Sarah!

Karen at PaperFancy.com says:

Hi Sarah and Shermaine,
What a great question! I do totally agree with Sarah on this one. When I had my wholesale stationery business I did first sell through small gift stores and stationery boutiques. I did find that even those small companies would not pay up front. They actually paid 30 days or over for most. Unfortunately, a few never paid which will not ruin your company if it’s $100 vs. $10,000 of a large department store order. So, I agree to keep it slow and small at first.

Good luck with your business!!

Allison Izu says:

Thank you so much for asking this question – I am still in the process of looking for a reputable sales rep too. I’ve been through at least 5 in the last 2 years, so it’s tough to find people who know what they are doing out there.

To answer AdaPia’s question, i’ve also purchased a couple of “sales rep directories” which is basically an email list of showrooms, but its difficult to work with showrooms when you are starting out,so i dont recommend purchasing these lists.

If anyone has expertise on finding a good sales rep, please share . . .

Mahalo – allison

Margo Schlossberg says:

Hi There,

I have found that stores are so risk aversive that they want to see if my product will sell first before they make payment thus I have been having to sell on consignment which is time consuming and difficult for cashflow. Curious about your thoughts and advice on this situation.
thanks all and Sarah great advice.
Margo