Monday, March 16, 2009

Article: Wholesale/Retail Pricing Structure and what is a "card rep" anyway?

Hi Everyone. I started my greeting card adventure in 2007 with the printing of my first set of images. I have been travelling to Europe for many years now and am using the photographic images I have taken on my trips to make these wonderful greeting cards. Inspirational quotes paired with timeless images. I had the happy thought of making them into greeting cards when going through my photo albums my grown daughter asked me what I was planning to do with all those gargoyle photographs! I fell in love with the gargoyles and statues and without realizing it
had really concentrated my photo journaling on them. The idea of making greeting cards really appealed to me as I have been making my own greeting cards for years using different techniques. I knew I had to do some footwork in order to get this "off the ground".

I began my research by calling a man I knew in the card representative business. I had done his travel arrangements for his "reps" for years. He was very discouraging and said no decent card rep would carry a company that had less than 100 different images and to really get a good start in business you NEEDED a good card rep. Not to be daunted I asked him a number of other questions and gleaned this: 80% of the greeting cards sold in the United States ( my initial market ) sold for between $2.50 and $3.50, there are 2 categories of cards, special occasions and greeting, some retailers required a UPC code, and all retailers bought cards at 50% of their retail value at best;sometimes this is an even lower % if it is a very large order! This was all very helpful information. If you start with the actual cost of your card ( your supplies ) and add a profit margin-whatever you might want that to be-then double that amount, you should arrive at a retail price. Then you need to decide who your main retail market is going to be. Most florists do not require a UPC code, most high end retail stationery shops do. Once again, I did some research and found a company online that you can purchase a UPC code for around $80 and they send you a pdf file that you can use to print on the back of your cards if desired. Since my target market was larger retail shops I decided to purchase a UPC code. The UPC code is yours however it is for the use of the retail market that purchases your cards. They put the code into their computer system and have it say whatever is convienient for them. I decided to sell my cards at retail $3.25 and wholesale at $1.62. I give my buyers 30 days net to pay after their initial order. That means that I am willing to "float" their purchase for 30 days. I would not do that for an overseas buyer but was told that was standard practice for most retailers. I cannot confirm or deny that but it has worked for me. I do not do consignment orders because it is too much bookkeeping for me. The way I do it now, I approach a store that I think would be a good retail fit and ask for an appointment to show them my wares. If they like them and agree to buy them, I do a happy dance and fill the order. I leave them with an invoice due in 30 days and yes, they always pay on time!!!

However, whenever I have had one of these sales I am told by the owner of the business that I really need a good card rep!! Every time!! The last store owner I spoke to explained to me that he is "used to" dealing with card reps and that is how most of their purchasing happens. I asked him for the names of a few reps that he liked that might be a good fit for my cards. Here is where my story gets frustrating. I called 3 of the names he gave me and left messages. None of them called me back. I went to a local trade show and picked up names of 3 more reps. Called and left messages and none of them called me back. I am now playing phone tag with someone recommended by yet another store owner, one that I do business with already. I have high hopes for this one. Once you get an agreement with a card rep they expect 15 to 20% of the wholesale price of the sale as compensation. Oops, I forgot to mention that in the whole pricing structure above because I DID figure that in to my final retail price. I am offering a rep 20% because I would love to hand over the sales portion to someone else and concentrate on the cards themselves. And of course, you want to connect with someone who is in love with your cards and
will represent them well. The reps will carry several card lines and that's why the store owners like them, they can do several orders at once and deal with someone they have built a relationship with.

So that's my wholesale/retail story in a nutshell and I hope it helps some of you who are thinking of entering the wholesale marketplace. I have 10 shops that carry my cards now and have a goal of 100!! Then I plan on going worldwide!!! Cheers everyone. Please visit my etsy shop and convo me with any questions.

Cheri of TravelnCheri

5 comments:

HandiCrafts said...

Thank you for sharing your experiences! How interesting!!

Molly said...

Super interesting! Thanks, this was really helpful! Sounds like a real success story!

tinybird said...

You might have good luck with the reps calling you back if you mention that the store owner (whom you already sell to) referred you. That way they know that you're serious and that your cards are sell-able.

Cheri said...

yes, the one rep who has called me back was due to name dropping on my part! We have since made a connection and she has reservations since I have so few images. I will write more on this subject as time goes on! Cheri

newmexicomtngirl.com said...

great info