Hi all, I’ve had an enquiry from a website to sell my items. It would be via drop shipping, so they want to know my RRP, wholesale price and want samples of my work. I know the site through their group on Facebook and I have no reason to believe there would be any problem, I’m just not sure how it would work.
Essentially, the items would be on their website, people would order there and they’d forward the order to me, which I would then make and send to the customer.
The problem I have is the wholesale price. If one of my papercuts is £30, then should my wholesale price be £15? That seems quite low, although if there were a lot of orders, it would be better than no orders, which is pretty much where I am now. Or could I suggest that my wholesale price is £20?
The website would also take postage costs, so for a framed papercut, I charge £5.50. Would I add that to the wholesale cost?
This seems like a good opportunity, as the website is closely aligned to what I sell the most of in terms of design, although it’s not actually launched yet.
Any advice anybody has would be massively appreciated.
This link may help you when it comes to pricing your products regarding wholesale etc.
I would strongly recommend you ask to see the contract and T&Cs before you hand over anything to them so you know exactly what will happen, how you will be paid, who is responsible for what etc. Also what happens when things go wrong (customer claims order not received etc).
As the website hasn’t launched I’d also want to know how they are marketing it, who it is aimed at, etc because I’d want to know where possibly 50% of the money was going if it’s not a bricks and mortar shop!
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Thanks. That’s really good link, so I’ve saved it. I’ll be having a conversation with one of the website owners at some point when I’m ready, so I’ll be asking about the contract and related things that you mention.
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Another comment to add is that you aren’t selling wholesale if you are drop shipping (not sure if this is covered in the article link as I haven’t read it but thought I would just make the point here), so don’t let them have your wholesale price, give them a commission price and make sure they stick to your RRP as you don’t want them undercutting your own online sales efforts.
With wholesale, you cut your price to allow the retailer a margin of typically 2.4. That’s because the retailer physically buys the goods from you, in your prestated minimum quantities, and financially, the volume of products they buy makes it worthwhile.
With drop shipping, you may only sell one of a product. So drop shipping normally operates to a margin of around 20%. It is more like a commission based sale (not a wholesale, where the retailer gets their benefits because they invest their money up front) as the website owners are not investing anything financially. All risk is with you, they add value because potentially they can bring you new customers.
Ts and Cs are a must, in advance of you sending your products to them. Good luck, hope it works out for you and let us know how things go!
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Thanks Heidi. The drop shipping bit is the thing I’m not sure about but your comments have really helped.
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@HeidiMeier is spot on with her advice. If you’re drop shipping, it’s not a wholesale order so their commission should be much, much lower.
Also if you do choose to sell with them, make sure all your listing titles and descriptions are different from elsewhere so it doesn’t negatively affect your rankings on Google.
There’s lots of brilliant advice from Clare Yuille of the Indie Retail Academy and Cat How from Howkapow about that I would really recommend reading here. It’s more about selling wholesale but it’s still relevant and really useful. http://blog.folksy.com/category/seller-tips/selling-to-shops-seller-tips
This article is about Sale or Return rather than drop-shipping but has useful info http://blog.folksy.com/2014/04/09/cats-how-to-sell-your-work-through-shops-and-whats-in-it-for-you
And if you’re ever considering selling Sale or Return I’d recommend this article too https://www.indieretailacademy.com/the-truth-about-sale-or-return/
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