Selling wholesale

Volume is how a few-dollar product becomes a business, and wholesale is where volume is.

Why this category wants it

Lip balm is an impulse item at a counter. It does not need to be sought out, which is exactly the product a retailer wants beside the till.

And the unit is small enough that a first order is a low-risk decision for the buyer, which makes this an easier wholesale conversation than most handmade products get.

What a buyer asks for

A line sheet with wholesale pricing, case quantities and a minimum order.

A barcode, frequently, and a display unit that sits on a counter without them having to build one.

Liability insurance, with them named on it in some cases.

Tamper evidence, often non-negotiable for anything used on the mouth.

And consistency: the reorder has to match the first order, which is the thing that catches makers who have never made the same batch twice.

The margin has to work

Wholesale is conventionally about half of direct retail. Work backwards from what the shelf price must be, not forwards from your cost.

If half of your retail price is below your cost, the answer is not a smaller discount. It is a cheaper unit or a higher retail price, decided before you approach anybody.

What breaks first

Not production. Packaging lead times and label minimums, because a reorder of 500 units with a six-week label lead time is a stockout you promised not to have.

Then consistency, when the second batch of a color does not match the first on a shelf beside it.

Then your hands, at the point where labeling five hundred tubes stops being a task and becomes the constraint on the whole business.

References