Right out the gate, let me tell you that this post is gonna be 1 part promo 2 parts educational. So let’s alienate some people with a self-promo right out the gate.
If you don’t know much about me or happen to stumble upon this post because of my many shares on facebook groups. Let me tell you that I own an online merchandise business.
You can find this wonderful venture of mine over at: http://mabsarts.storenvy.com/
The reason I bring this up is because in it you will find all sorts of stuff I make either by myself or in collaboration with other artists. However more importantly, the reason I bring it up is because while you might think that I get a ton of sales over on my store, the reality is far different, yet somehow I still have quite a thriving business. So how does that work exactly?
Retail Stores and Selling for Consignment
Simple answer. I sell in many stores and not just my website.
Complex answer. Establishing a network of commercial brick and mortar stores that carry my products has created a profitable ecosystem for my business.
What started as a hobby was quickly taken to magnificent heights by talking to my local thrift store. They and many other small usually family/friends owned local businesses offer the option of artists consignments.
Selling for consignment means that a third-party, in this case a store, will purchase your products but pay you only what sold, and either continue to display what didn’t or give it back to you. This is great for small businesses looking to display more products without having to invest upfront for said product, as well as for artists looking to move their merchandise without having to advertise it. In both cases it’s sort of a put it up and forget about it (till it sells.) Which is the very definition of passive income, and in my opinion the best example of a commercially viable products business.
Think of it like this;
An online store is great because people can go buy your items right from their computers, however how many people even know your store exists? Probably very little, that means you have to tell them that it exists, so now you’re spending countless hours (like me) writing blog content, posting on social media or creating neat videos for youtube to showcase your products. That’s time you’re not creating the artwork that you are selling in the first place.
Yet, when you link up with a brick and mortar store, people are already walking into the store with the notion of buying, they are already looking to get something out of that visit, and it could be you.
100 people that walk into a store to buy, is much better than 100 people maybe checking out your store to see what you offer. In the first case people are already out with their wallets when their perusing the aisles, in the second case they haven’t even considered the idea of buying, their literally just looking.
Even just 1 brick and mortar connection will improve your sales. I have seen in my personal business an increase of sales by 200% , this data comes from the first day I opened by sticker business online compared to the amount of money I’ve received as my cut of the Consigned Sales.
Now that you understand why you should be scheduling meetings with some local shops, let’s see how we can go about doing that in an efficient manner.
Make a List and Read it Twice
I like to start every new idea or business venture by cracking out my notebook or journal and writing down as much information as I can about the concept I am exploring. This will include things like brainstorming sessions, random thoughts about the topic and of course lists. At first I suggest you do 3 lists.
1- A list of stores that you’d like to your products to be in.
It is important that when you make this list, you think of stores around your area that.
A- Are small to medium in terms of earnings, personnel and traffic.
B- Are a good fit for your product.
You don’t want to be selling bikini swimsuits at a local church gift shop. Find your niche and make your list.
2- A list of the products and prices you have available right now.
This list is crucial not just for trying to get into brick and mortars, but just for your business overall. Having a list with each products name, price, description, quantity and picture will help you stay organized and when the time comes to re-stock you’ll be buying exactly what you need, and not what you think you need.
3- A list of items and prices for each store you’d like to get into.
This list is crucial, before you even make the first connection you should know what you are going to be bringing to the store. You never want to figure it out during the meeting or days later. You should know exactly what you want to leave for them, at what price, and how many of each time, and you should bring to copies of that paper. One for you and one for the store owner that will be talking to you during the meeting. In the case that you do make a connection and they think that you are right for the store, they will have all the information handy and you’ll be out the door with a new point of sale under your belt.
Schedule that Meeting!
Ok, so you made your lists, you’re on top of what you have, and where you’d like to sell it. Now it’s time to talk to the store owners. I suggest that you do this over a span of several months, perhaps even years. Never make more promises than you can keep, so the best idea is to take your list and go to the first place on it. Let’s call this Ideal Store A. Before you leave your home or studio, remember to take.
- List of Products for the store
- List of All Products
- Product Samples or Catalogue of Products on the Store Product List
- Written Agreement/ Invoice
Once you’ve arrived to Ideal Store A, park close by as you either want to walk in with your products in hand or at least have them close enough so you can dip out and get them if the store owner’s available.
Whenever I visit a brick and mortar store for my wares, I always step in with my backpack and my binder full of stickers. This works great because I often just walk up to the cashier (if there’s no line) or to the nearest employee that’s available and I ask to speak to someone in regards to selling my stickers in their store. Usually at this point I open the binder and show them my stickers. This works great for two reasons.
1- If I am talking to someone in management, it’s a great way for them to see if they like my stuff and they can tell me whether they’d like to talk further, or if they don’t like my work or don’t offer consignment, so I don’t have to waste any time, and neither do they.
2- If I am not talking to someone in management, usually the employee will still look through the art and either enjoy it and follow me online or at the very least will direct me to someone higher in the management chain that can help me.
Once the conversation has started and we are talking about my products, I then break out the big guns, and that is my Store Product List and Invoice (in my case it’s the same thing, since it also shows the store’s cut, my cut and individual prices and quantity for each item I am leaving the store.)
It is important that when you show them this list you talk about commission percentages and sales totals. You want to give them an idea of how much they’ll be making just by carrying your products. As for commission percentages, most stores already have a percentage in mind, however I have a rule of thumb for my products.
The cut I get from the sale has to equal double the investment on a single product.
Low investment items like stickers, buttons and magnets are great because they can usually be sold for less than $5 and everyone makes a great profit on them. For example, in my case I have 2 sticker options I offer brick and mortars, a $2 sticker option and a $4 option. In either case they make 50% (I stipulated this percentage) and I only invested pennies on making the sticker so I usually make a 100%-200% ROI (Return on Investment). Coupled over say 100 stickers and we’re already talking big money.
One more important note about percentages. If the store is known to do this, they will have a percentage set-up. However I suggest that you go over their percentage and stipulate yours at a higher margin. If they say 33%, you say 50%. This is because, the more profit they make on each sale the better you will be treated when it comes to displays, promos and advertisements. Another reason why this is a great idea is because you don’t want to deal with cents. Try to make all your prices rounded up to the nearest whole number, none of that .99 cents stuff. We want dollars no pennies.
Pennies and quarters take longer to count up and if you plan on having several brick and mortar connections, you’ll be making several trips every couple of months, all that math to get you paid will eat into your time and if the store-owner is the only employee on hand they might not even be able to pay you because their store is packed.
You want that transaction to be quick, easy, fast and painless. So round to the dollar and choose a percentage that splits things evenly for both of you.
Once Established, Expand
Yeah like the title says; Once established, EXPAND.
Okay, good. You got a couple of products in that mom and pop down the road, now you have some options. You can double down and make more products to bring into the brick and mortar next time you come in for your paycheck, you find a second brick and mortar to carry more of the same product, or you do both things.
Personally I like to do both things. While I am waiting for the store to sale my wares, I start buying more merchandise to open over on a second store, and re-stock on the first store. Usually the time between payment visits is 1-3 months. If you have a huge catalog of products opt for 3months+ time periods, this will make your visits worthwhile especially if you have items that sell often. More time = more money. Either way while you wait for your next visit use this time to also explore new product ideas, new variations, and overall new concepts. You already have a platform to sell the products so creating new stuff will only strengthen your connection to the brick and mortar.
One last thing.
Do not substitute brick and mortar for your online store. Have both. You need both. In this economic climate brick and mortars are going bankrupt left and right, and whilst this consignment strategies relief small-medium businesses, you still never know when you’ll get a call to pick up your unsold products because the company is going bankrupt.
Always have both, your online store is your kingdom and in it you are the ruler, no one can close that unless you allow it, and that’s very powerful.
If you have an online store I suggest you integrate dropshipping into it with Printful.com (they take care of producing, shipping, and processing for countless products from shirts, to pillows and everything in between.)
This is a big post but I hope it helps you in your journey from independent artist to wholesale brand name. Let me know if you have other tips or comments down below.