If your product is easily and inexpensively produced, supplying a retail shop can be a very good option.
Retail shops, especially the smaller gift and decor shops, are always on the look-out for unusual and exclusive products. Shop owners often have very good design ideas and need someone to manufacture them. Many a successful relationship has been developed between a crafter and a shop owner, where together they design and create a range of exclusive products.
There are two ways of supplying a shop. The first, (and in my opinion, the better option), is that they buy your product outright. They then add their mark up and sell it.
The second, is that you supply them with goods on consignment. In other words they do not pay you for the goods. Instead you get paid when, or if, they sell them. The shop owner takes a percentage of the sale as commission. The disadvantage of doing this, is that because they have not paid for your goods, there is always a chance that they will not look after your things properly. There is also not the same incentive to push for sales. If you have faith in your product you shouldn’t have to leave goods on consignment.
Advantages
- You don’t have to get involved with, or sp end time selling your things, as happens at a market, which leaves you free to concentrate on manufacturing.
- Once you have established agood relationship with a shop, you simply supply them on a regular basis.
- If you are paid for your products, you are guaranteed sales – any further risk is theirs. This enables you to plan your production and manufacturing.
Disadvantages
- You have to be committed to supplying the shop witgoods on a regular basis. So you have to establish a disciplined manufacturing system. For a creative person this means doing the same thing over and over. It can become very boring.
- You have to provide exactly the same product as your sample, because that’s what the shop owner chose and that’s what they’re expecting.
- Your profit is lower than if you were selling at a market, because you have to allow the shop owner to put on their mark up which is their profit.
- Most shop owners will want 30 days credit. You have to have the cash flow to be able to carry this. Occasionally you will have a shop owner defaulting on payment too, which can put your business at risk.
to be continued
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