If you’re new to the wholesale market and want more exposure for your products, you may want to consider exhibiting in a wholesale trade show. A booth at a trade show can quick start sales to numerous interested retail buyers looking for new products.
So, what exactly is a wholesale trade show?
Trade Shows are temporary marketplaces, generally two to five days in length, where buyers (usually retailers) and sellers of wholesale products, come together. Most exhibitors at industry shows are producers (people who make or manufacture things), but booths may include sales reps, distributors, and importers. They may also include suppliers and service providers who target both retailers and producers.
Depending on industry, attendees and/or exhibitors may vary widely. For example, in many sectors, there are equipment trade shows which involve manufacturers selling to manufacturers, e.g. food or soap or supplement machinery manufacturers selling to manufacturers of those types of consumer products. Or the primary buyers might be service companies, for example, construction companies might be attending a show for construction equipment.
The primary business purpose at the vast majority of these shows is to check out new products or lines and/or place orders (buyers) and develop prospects and take orders (exhibitors).
Most shows are held at the largest convention center in a particularly large city where shows are held. Shows of national or international scope are often held annually in hotbeds of the trade show industry, for example, Las Vegas, Chicago, or New York.
Attendees (non-exhibitors) at a true wholesale show are usually limited to “members of the trade” who represent legit buyers. Often, you cannot get in to check out a show if you are just a producer or rep. Show management works to protect their exhibitors from pure competitors who are not potential buyers.
If you do want to attend a show as a buyer, proof of your buyer status might include a retail store or website (and your companion business card and/or marketing materials), where you offer goods for sale which are not your own. Or you might provide copies of invoices from your vendors for merchandise you purchase from them.
Just like marts or showrooms, trade show events are not open to the general public. Some shows will offer a couple of days of wholesale-only sales before opening up for the public at large in a “cash and carry” format.
Trade Show Schedules
Wholesale gift trade shows are typically scheduled one to four times a year in every large city where a gift mart or showroom is also found. Plus, shows are located in smaller, but still fairly large, cities. For example, in our area, the nearest gift marts are found in Seattle, Denver, Minneapolis, Las Vegas, and San Francisco.
Wholesale gift trade shows are held in those five places, PLUS at “in between” locations including Billings, Montana; and Portland, Oregon. Again, most sites hold two shows a year, one in the late winter or spring and the other in summer or EARLY fall. The Billings Market used to show four times a year, but recently they dropped to three times, probably a sign of the times.
In other industries, shows might be annual, or twice a year in different parts of the country (e.g. Supply Side East and Supply Side West), or any combination.
THE TRADE SHOW BUSINESS MODEL
Wholesale shows are not for amateur producers or hobbyists. The cost alone can scare away anyone who is not serious about the potential opportunity a show represents. Your line needs to be large enough, and your packaging professional enough, to take full advantage of this type of prospect-generation system. Of course, if you offer one product and either the market or the cost is high enough, that one product might be worth exhibiting at a trade show.
From a business perspective, a wholesale trade show is a very different animal than a small retail show or fair where you sell directly to consumers. Because you are selling to an entirely different market (store buyers), your planning, booth design, and sales strategies will be completely different. If you want to learn more about how to successful exhibit and gain new wholesale customers from a trade show, check out my comprehensive guide Trade Show Exhibiting Secrets. It’s got everything you need to know to properly prepare yourself for optimum success. Happy exhibiting!
What questions do you have about trade shows? Let us know in the comments!
Moving beyond selling your handmade, manufactured, or resale imported items at fairs, and region retail shows and hiring a sales representative is a big decision.¬† Maybe you’ve already hired your first sales rep.¬† Or maybe a sales rep is showing interest in your items.¬† Either way, before you rush into hiring a sales rep, make sure you, your product line, and your business is ready.
Here are some tips to get you started:
Setting Up Your Business¬†
If you want to be taken seriously, you’ve got to present yourself in the most professional light and indicate that you’re ‘retail ready‘ and primed to take the next steps. Consider the following questions:
- Does my business have a professional presence, such as registered name, business cards, separate business bank account, business phone and / or fax, business email and /or website?
- Do I have wholesale sales sheets or catalog with good quality photos of my line?
- Have I established my payment terms, minimum order amounts, and delivery/shipping systems and options?
- Do I have policies in place for exchanges, returns, outdated and damaged products?
- Do I have a good system for tracking sales, receivables, expenses and commissions?
- Does my company enjoy excess capacity or the ability to beef up production to accommodate extra sales that a sales rep will bring me? And will I be able to get those orders out the door in a timely manner?
If you answered ‘no’ to any of these questions, you may need to stop and regroup before going any further.¬† Getting your systems in place BEFORE you look for a representative is critical to your success with reps. If you fall down on your first couple orders with a rep you’ll lose your credibility and risk being dropped by the rep.
Making Your Product Line ‚ÄėRep Ready‚Äô
Most legit reps will not be interested in taking on your line until you‚Äôve established yourself in the marketplace or been in business for several months to a few years.¬†Seem unfair?¬† Unfortunately, there are plenty of horror stories about new companies coming and going without fulfilling orders or paying reps their commission. Sometimes, small companies can‚Äôt handle the growth that a new rep will bring them. Others just don‚Äôt have their businesses in order yet.
Making those first retailer sales calls yourself and selling your to a few key accounts is an important early step, providing experience and feedback from wholesale buyers about your products, before taking on reps. Consider this a trial period where you work out the kinks in your ordering and delivery system.
The experience of selling your own products at wholesale to a local retailer, before hiring a sales rep, will help you appreciate what reps do for you and also generates your presence within the marketplace. Having established, successful accounts adds value to your line when approaching potential reps.¬†
The sales statistics you accumulate during the process are helpful in giving your company distinction and awareness when you present your product line to a potential sales representative.¬† Being able to provide your rep with statistics like your re-order rate and your average turnover rate go along way toward your credibility.¬†
Having experience working in the business will enhance your own confidence, as well as potential sales partners, in your line and your systems.
When you’re first getting into the retail or wholesale game, things can seem pretty confusing. Between wholesale systems, getting retail ready, hiring sales reps, and beyond- there’s so much to know.
So where do you begin?
A bad first impression can be¬†difficult to overcome. Not only do you risk looking¬†unprofessional, but a poorly planned process has the potential to cost you more money than the sale is¬†worth.
The good news is, selling your unique creations to retail store buyers is not as overwhelming as it seems, especially if you’re properly prepared.
Here are a list of six simple¬†systems¬†to put in place before you visit your first retailers.
1. Develop Correct Wholesale/Retail Pricing
As a general rule of thumb, your wholesale price should be approximately 50% of your retail price. If it is less, you will have a difficult time selling your products wholesale. Often, it will take some work to make sure there are adequate margins for you both and the gift retailer.
Following is a rough formula to use when determining pricing for your products.
Cost of Good (plus time and marketing) X 2 = Wholesale Cost
Wholesale cost X 2-2.5 = Retail Cost
One of the biggest mistakes I see with new producers is that they work their pricing backwards, taking their retail price and dividing it in half to come up with a wholesale price.¬†Always start with your costs and work your way through the formula to come up with a wholesale price first, then double (or more) to arrive at a retail price.
2. Decide on Your Payment Terms and Minimum Order Requirements
Most retailers expect Net 30-60 terms, but I suggest you ask for credit card payments on the first order or two.¬† After that, you can extend whatever terms you would like to use, depending, of course, on the particular store you’re working with.
Minimum order amounts can vary from product to product.¬†Sometimes, it is reflective of the best use of your raw materials.¬† If you are unsure, most retailers expect between 6 to 12 products in a single design or type as a starting minimum.
3. Create Your Sales and Order Taking Materials
Full color sales flyers are an absolute must when selling wholesale.¬†Samples are great, but flyers can be¬†both¬†emailed or left with your buyers.¬†Each page of your flyer needs to include size, color, minimum quantity, terms, price, contact info, as well as photos of your products.
Order books are also useful, especially if you visit your buyers.¬† You can design your own order forms or use a sales order form book available at any office supply store.¬†The best option is to add a few extra columns to your sale flyer or line sheet to use as an order form.
4. Designate a Shipping and Fulfillment Area
Research UPS, USPS, and FedEx to see which company will be the best fit for you. Once you decide, open an online account where you can input your info and print shipping labels right from your computer.¬†This method saves you both¬†time and money once you starting doing a lot of shipping.
Set up a separate area in your office or home for your shipping supplies, so everything is right there where you need it. Keep your order boxes, peanuts, bubble wrap, and packing tape all on a large table where you can package orders quickly and easily.
5.¬†Set up Your Record Keeping Systems
Even if you only sell products via credit card, you will still need a bookkeeping system. In order to stay¬†abreast of your financial situation, you will need to find a system that will print invoices and packing slips, as well as keep track of your expenses.¬†Freshbooks and QuickBooks¬†are¬†both excellent¬†options.
6.¬†Develop a Follow Up System
Lastly, make sure you have developed a follow up system to check in with your buyers.¬†Once your product sells out, it’s your responsibility to make sure your products are re-orders.¬†Don’t expect your buyer to contact you.
Setting up a written or computerized schedule to follow up with each wholesale customer will help you keep track of when to contact your buyers.
Once you have all the above systems in place, you should be ready to approach your first wholesale buyer!
I know from talking to hundreds (if not thousands) of artisans, producers, and manufacturers that want to get their products in retail stores. Sometimes, they employ the assistance of professional sales reps. Working with sales reps can either be the best or the worst decision you can make for your business. With the right information and a little preparation, you can ensure that your sales rep experience is a win.
For many of you product moms looking to increase sales, the problem lies in navigating the world of sales reps. Let’s get you on your way.
But first, let me explain who sales reps are.
A Manufacturer‚Äôs Representative, also called agent, manufacturer‚Äôs rep, sales representative, or sales rep ‚Äď or more commonly, just ‚Äúrep‚ÄĚ ‚Äď is a self-employed person who contracts direct selling and marketing services to one or more related, but normally non-competing, companies in a particular industry.
As part of their service, reps call on prospect businesses and present the client‚Äôs products in a positive light. Effective reps must answer product questions intelligently; offer promotional materials, terms and other information; and ask for orders and re-orders in person, or by phone, fax, or email, and via their own web sites.
Sales reps earn commissions as compensation for their selling services, rather than making their money by buying your product at a discount and reselling it for a higher price, like distributors and wholesalers do.
From the point of view of a producer, sales reps probably qualify as the lowest cost option for expanding sales regionally or nationally. Independent reps operate as a contract sales person, or in the case of rep ‚Äúgroups‚ÄĚ, as a contract sales force, working on a strictly commission basis, minimizing overhead for a producer.
Reps typically have a designated territory; visit or contact their buyers regularly; and most importantly, have a relationship with buyers who rely on sales reps to introduce the best and newest products to sell in their stores.¬†In any given time, I personally sold up to 47 lines to 300+ stores that I visited 2 to 5 times per year, depending on their location. By frequenting their buyers,sales reps build a trusting relationship beyond what most producers or artisans could accomplish dealing directly.
So, How Do Reps Work?
Sales reps work on a commission and don’t get paid unless they sell your products. Typically, in the gift business, the commission payment is around 15% of the wholesale price. For example, if a sales rep sold 12 of your items for $10 each, the order total would be $120 plus shipping and handling. The commission to the rep for this order would be $18. And since you would not pay your rep until you got payment from the retailer, there is little risk to you.
Sales reps also act as a liaison between you (the producer or artisan) and the stores. In this capacity, I have negotiated package purchases for the buyer, helped with billing issues, encouraged buyers to try new items in a line, and helped solved any problems between buyers and producers.
Reps also represent your lines at Gift Marts and/or Trade Shows where hundreds of buyers are attending. Being from Idaho where there is no local gift show, I was mostly a road and internet rep.
If you have sales reps working for you, it allows you to focus your attention on your creative endeavors rather than worrying about contacting and working with retailers.
How Do I Make My Product Line ‚ÄėRep Ready‚Äô?
Most legit reps will not be interested in taking on your line until you‚Äôve established yourself in the marketplace or been in business for several months to a few years. Before seeking out a sales rep, you need to make some initial sales calls to retailers and sell your product to a few key accounts. Doing so¬†will provide valuable experience and feedback from wholesale buyers about your products. Here’s more on how to get ready.