Selling your handmade products in shops - how to find a stockist

This week I'm happy to announce that I have a new stockist for my products, The Shop in The Square in Wolverhampton. SITS is a shop run by artists and crafters in the West Midlands and is full to the brim with beautiful handmade items, I'm very proud to be joining them. A few of my friends and fellow crafters have asked me how I've found stockists for my products, and what they should do to find stockists themselves, so I've put together this guide based on my own experience so far. Comments and questions are welcome!

1. Sell first
Before you start trying to find a stockist for your handmade products you should first get some experience selling your products by other channels. You could sell online via etsy or eBay, or sell at craft fairs. Whatever channel you chose establish a range of products and spend a few months selling them to the public. Find out what sells and what doesn't, experiment with pricing and keep records. This way you'll be able to say with confidence that your products are saleable, you'll know which are your best sellers and you'll be able to set the right wholesale price. Retailers need to know this information, and they'll also be reassured by your figures that they aren't taking a risk on your products.

2. Crunch the numbers and getting prepared
The next thing to do is to start crunching the numbers. Let's start with an example, imagine you make a cuddly toy that you've been selling for £10. The materials for the toy only cost around £1, and it takes you 3 hours to make each one. When you sell the toy online or at a craft fair you make a profit of £9 per toy, and since they take you 3 hours to make you're effectively paying yourself £3 an hour to make them. Let's assume you're happy with that situation because, let's face it, handmade businesses aren't all about big profit. But once you start thinking about selling through a stockist you might find that the numbers are a lot less favourable. It's fairly typical for a shop to ask for 50% commission, so if you set the RRP* at £10 for the toy they'll only want to pay £5 per item. Suddenly your profit is only £4, and your hard work is only worth £1.30 an hour. No one would blame you for being unhappy with the offer, but is there any way around it?

Some people might argue that the best thing to do in this situation is to double your prices. But a toy that you've proven will sell at £10 might not be so tempting to customers when priced at £20, so by trying to protect your profit you run the risk of making no money at all. I would recommend a middle way, experiment with increasing your pricing through your own channels by 20-50%. Customers might be happy to pay £15 for the toy, and if you can increase your RRP you can increase your profit. The same toy prices at £15 could be sold on to the stockist at £7.50 each, £2.16 per hour for your hard work.

At this point some sellers might be asking whether supplying a stockist is even worth it when it represents less profit per item. But before you dismiss the idea out of hand it's worth thinking again about the positives and negatives of other selling channels. When you're selling at a craft fair it's easy to see the money in your hand as pure profit, but how much did the stall fee cost you? How much money did you spend on display items? How much were your travel expenses? And imagine for a moment that you were paying yourself an hourly wage for the time you spent looking after the stall, how much is your own time worth? If you add up all these expenses you might find out that the craft fair was less profitable than you imagined, and in comparison stockists can represent value for money. The 50% taken by the shop effectively covers stall fees, travel expenses and the cost of staff to sell your products for you. Depending on the stockist it might also cover advertising and presence in a busy high street location.

Take some time to look over the numbers, and decide whether or not selling wholesale is for you. Decide the minimum price per hour that you would like to earn and apply it to your products. Keep a list of your products alongside wholesale price and RRPs and this will form the basis of a retail trade price sheet that you can show to potential stockists.

If your items are large make sure to include pictures of the different product types on this sheet too, otherwise be prepared to take examples with you whenever you approach a stockist.

3. Approaching stockists
In some areas suitable stockists for handmade products might be well known and easy to find, but in others you might have to work hard to find them. Look for independent shops that already stock handmade local items, art and craft galleries and gift shops that are popular with tourists. I don't recommend chain stores for consideration unless you're in a position to produce a big volume of stock very quickly. Check local papers and business directories, and look on facebook and twitter, and try searching the UK Handmade Directory too. Make yourself a list of potential stockists and if possible go and take a look, and bear in mind that it isn't a good idea to have two stockists within the same town. Ask yourself whether your products would fit in with the products on display, and if you think they would ask to speak to a manager about the possibility of stocking with them. All being well you should give them your contact details and arrange to show them some samples or photos of your work, and discuss money, at a later date. Alternatively if you're familiar with the shop you could call ahead and arrange this over the phone.

When having an official meeting with the stockist make sure you take along your retail trade price sheet, pictures of items or sample products and details of your previous selling experience including facts and figures about your best sellers. If the shop are interested in a 'sale or return' arrangement make sure to discuss the following:

• What percentage commission the shop will take 
• Whether a 'trial period' would be helpful to see whether your products and the shop are a good match. 
• How and when the shop will pay you for the items that have sold. Some may suggest a monthly payment, others may prefer to set a trial period after which time you will need to check which items have sold and issue them with an invoice. 

If the shop are interested in a pre-paid wholesale order discuss lead times** with them, and make sure the manager has a realistic idea of how fast your turnover will be. Be brave and passionate about your products, and don't be too downhearted if the meeting isn't successful!

(At this point I should add that some shops specialise is handmade sales, and may have their own procedures to cover all this, they might even have an online form where you can fill in your details and attach photos of your work, eliminating the need to arrange a meeting at all. Unfortunately not all shops are so organised, so it's worth getting yourself preparing just in case!)

4. Delivering your items
Congratulations, a shop has agreed to stock your items! Now it's time to deliver a range of stock for them to display. If the shop has paid up front for a wholesale order take your items along with a receipt. Take along two copies and have the shop sign your copy to confirm they have taken delivery. Now you can tell all your family and friends to shop there, and with a little luck they will order from you again soon! If you have a 'sale or return' agreement with the shop then the situation is a little different. Take along a seller delivery list detailing everything you are delivering, again take two copies and have them sign on delivery. Keep in regular contact with the shop to check whether items are selling or not. If popular items are disappearing fast you may want to arrange another delivery, if unpopular items are taking up space or (god forbid) have been removed from display you might want to arrange to pick them up. Make sure you are paid for the items that have sold and that the shop are treating your items with due care and respect. In return keep publicising your stockists, let people know that it's a great place to buy your products and other people's products too.

Of course once you have one stockist you're bound to want another and another, and that's the situation I'm in at the moment! Maybe next year I'll be able to pass on some more knowledge about managing multiple stockists and growing your craft empire, but until then please support all the lovely shops that sell Lucky Ladybird products at the moment; The Tania Holland Gallery, Urban Folk, Ice Maiden Cakes and The Shop in The Square.

Love and Luck,

LL xx

*Recommended retail price
** 'Lead times' the time it will take you to make or prepare your items.