Our Wholesale Guide: Opening up Home Decor & Furniture Wholesale Accounts
Hey, it’s Betsy. Shop Talk is the new series where Sarah and I document our journey toward opening up our first brick and mortar shop in Southern Pines, NC.
Today we’re gonna chat about navigating the world of wholesale as a newcomer.
A couple of summers ago I traveled to the Las Vegas Furniture Market as a buyer for an LA based furniture showroom I was working for. It was an enlightening experience that lifted the veil on the inner workings of the trade.
The mystery to wholesale is that there really is no mystery at all. You just buy direct from the manufacturer by opening up a reseller’s account and you meet their minimum order requirement. Then you do your best to present the product to your customer and if you are doing good, you sell it all!
I hit floor after floor of showrooms and talked until I was blue in the face to reps for all sorts of manufacturers.
After dispelling the myth that there was some secret code, I emerged feeling energized and more ready to grab Sarah and pursue our pick of the wholesale offering with the long time dream and vision that is TEOT.
But where would we start? We needed a wholesale guide.
Follow our journey on Instagram, via #TeotShopTalk
If you’ve been following along on our journey, you know that for years Sarah has been picking and thrifting her way through North Carolina and selling off the treasures that she stumbles upon. Last year we added a bit of product development into the mix, by sorting through the antiques scene here in Los Angeles, and pulling the best from the Hmong, Indian and African textiles that we came across and turning them into throw pillows.
But that’s not the big picture. Since day one, we’ve dreamt of putting together our own diverse mix of home goods that speak to the merge of our disparate style spectrum, settling somewhere in the realm of cottage, farmhouse, modern, SoCal casual, Southern traditional and bohemian eclectic. And we want to package that vision up and sell it to our friends and family online and in person, in a real life store!
Since that Las Vegas Market, I’ve stored a bag full of inspiring catalogs and price sheets, and just this week I scattered them about, looking for sales reps names, phone numbers and online websites. Sarah and I have been opening accounts with various wholesalers and we’re honing in on our opening inventory.
Here is the step-by-step guide to getting started with wholesale.
- First, you’ll need to have obtained your Federal EIN and Reseller’s License in your State.
This warrants a whole second post, we’ll get to the skinny on that another day. Whether you are incorporated or a sole proprietor, you’ll still need to register and obtain these licenses.
- Make sure your banking is in order.
You’ll need to set up a line of credit with the wholesaler and this will require proper credit and banking accounts set up in advance, in the name which you are doing business under.
- Contact your desired wholesalers
It appears that most manufacturers and wholesalers have a rep that will act as a liaison between you and the company, helping you identify the products you’d like to carry. A rep often will carry plenty of other brands too and if you pick up a good rep, a lot of options may be opened up to you. Admittedly, I met with some folks like this at market, but I know now that you can very easily apply for a wholesale account, most of the time directly from the manufacturer’s website. Be prepared to list 3 industry references. If you are brand new, then this can feel a bit tricky. We nudged our way into a few accounts by simply introducing ourselves as newcomers and then we relied on those new accounts as references for the next round.
- Plan for your minimum buys
The biggest juggle with the new shop, and one that we are still mapping out, is how to meet a bevy of minimum orders, which typically range between $1.5 and $5k, without overflowing the floor with one particular brand over another. Each item that we select is a risk and many times you are picking up a wholesale account on a gamble. We’re just starting out and we have a lot to learn about what the physical Southern Pines community will respond to. If a wholesaler has a tall minimum order then we really want to be sure we can move the product. We’re relying heavily on our eye for the mix here.
- Pay attention to shipping & consider negotiating
This is almost a note to self at this point, Sarah and I have just a small window of time left before we make our first orders. We need to play ball and we need to keep an eye out for any additional costs that we haven’t factored into our budget for getting the orders delivered and any overflow into storage.
Beyond attending markets or doing some heavy internet research to locate the manufacturers you want to carry, I’m sure there are options, but these two I trust. I wouldn’t go buying a manufacturer’s list, or paying money to join a network just yet. But these are options as well.
Sarah and I will be looking forward to attending the High Point Market in NC in the Fall, and we are looking at NY Now as well. I sure do wish that we could make it to Vegas in the Summer but it’s vacation week with the family.
We have much to learn, and to any of you out there reading this from an experienced vantage point, well we’d love your guidance. We are new and hungry to know more. If you are new like us, we’d like to hear from you too. We wanna know about the shows that you plan to attend, and any advice that you have for us on the must-have opportunities that are out there, please holler at us in the comments or email us here.
AFTER THE FACT EDITOR’s NOTE: We had a question about Wholesale Pricing. I’ve uploaded a snapshot of a pillow tag that I grabbed at market. I think it’s a spot on illustration of the basic pricing model and what to expect. Of course, wholesale accounts can be negotiated on a case per case basis and your leverage comes with your bulk order quantities and how much product a retailer can move annually. There is a basic formula that is widely followed and it resembles this image.
Tiered pricing levels at the market are often broken down into a mix of the following.
- Trade or TTT pricing
meaning the price available to tax exempt industry consumers like Interior Designers for example
which would be a retail boutique
applies to the manufacturers set price value
You’ve heard of MSRP, this is the manufacturers suggestion for the retail price. It is generally 2x or 2.5x the wholesale price.
- and something called IMAP
this is eComm specific and is a price that if you intend to sell online you may not sell for less than and it stands for Internet Minimum Advertised Price Policy.
I could be wrong in this specific tag instance, but I believe that anyone at this market could purchase a minimum of 2 of these pillows at the wholesale price and walk off the floor with them. (This would be similar to a To The Trade price as far as formula goes) but if you are a Dealer, then you are satisfying a minimum bulk order and so your price is reduced per piece, because your overall order is set to be above a certain amount.
I do hope that is clear.