If you get your costings wrong over a few products, then the damage can be minimal, but if you’re wrong across thousands, then it can be catastrophic for a small business.
When you’re an independent designer, getting a wholesale order from a big store can be a dream come true. That’s exactly what happened to Folksy sellers Jamie and Catherine from Bread and Jam when über-retailer Anthropologie found them through Folksy and placed a huge order for their American stores. But what are the practicalities of getting an order like this – how do you scale up a small business to meet a big retailer’s demands, should you offer exclusivity and how do you make sure they order again? We originally spoke to Catherine and Jamie just after their first order, and thought it was about time we caught up with them to find out what happened next and if they picked up any tips for selling wholesale…
How did the original order come about?
We were contacted via the Folksy message system by the Senior Assistant Buyer for the Home Department for Anthropologie US. They had seen our Random Notes of Appreciation on Folksy, but had no idea we were already stocking in their UK stores.
How big was the order?
They placed an order for over a thousand pieces, by far our biggest order yet. It threw up some interesting logistical conundrums but we worked through these systematically. We’re lucky in that they gave us a good lead time to fulfil the order, so our one-man, one-woman team could cope alongside all the other orders and day-to-day running of the company.
How have things developed since then?
We’re pleased to report that we’ve been working with Anthropologie for over two years now and we’ve had repeat orders from the UK and the US, as well as orders for new products. We’ve had five different products on their shelves so far and we’re currently developing more for them.
Are the products exclusive to Anthropologie?
Originally they came to us on the strength of an existing product we had listed on Folksy and we made some slight tweaks, but essentially it was the same product. We now work much more closely with the buyers and try to offer them exclusivity for each product. That exclusivity might be for a product entirely unique to Anthropologie or it might be an exclusive colour way – either way they respond well to exclusivity.
What’s the secret to a good buyer-supplier relationship?
We’ve been working with the lovely people of Anthropologie for a while now and we’ve seen our contacts come and go, but we’ve managed to keep the relationship on the straight and narrow with just enough contact to not annoy anyone! We’ve been a lot more pro-active with the buyers: showing them new products and ideas as they come through, and working with them when it comes to style and colour so we’re on the same wave length. Things work well currently – we try to keep things fresh and move things along for them. I think that’s noted and orders are placed on the strength of this.
What sort of paperwork is involved? Did you need a contract?
We’ve never worked on a contract basis with Anthropologie, other than an official purchase order and being on their supplier roster.
We now work much more closely with the buyers and try to offer them exclusivity for each product. That might be for a product entirely unique to Anthropologie or an exclusive colour way – either way they respond well to exclusivity.
Did selling in such large quantities mean adjusting your wholesale prices?
We don’t want to delve too deeply into our pricing structures, but, yes, we did negotiate on the back of the volume increases. It helps to know the standard margins they work with, so we can remain competitive and they can too. We would always adjust our structures if the numbers stacked up, regardless of how big the retailer was.
What are the crucial things to get right when selling to a large retailer?
Actually, for us at least, pricing took very much a back seat until it came to negotiating a price. The first steps for us were to talk to them on a human level and try to build up a relationship based around our personalities rather than what discounts we could offer. But clearly, the detail is absolutely critical if you want to come out of the last order with any profit. There’s no point in working with larger retailers if there’s no profit to reinvest into the company and new products. It’s easy to see your profits disappear if you don’t drill deep into the detail. You need to know things like: does the unit price include the shipping and customs charges, import duties and local taxes; how do their distribution centres operate and are you having to ship to a single distribution centre or multiple locations? The devil is indeed in the detail.
Retailers like products to be consistent, which can cause problems if your products are handmade. What’s your experience of that?
Consistency is critical and many larger retailers have quality procedures to check or spot check products as they hit their distribution centres. If you’re found to be supplying sub-standard goods then, at best, you get hit with an invoice penalty or at worst you lose your supplier status altogether. We have quite thorough quality-checking mechanisms in place – checking, double checking and triple checking. We will not let products through if they’re not good enough and we try to put ourselves in the shoes of the very end customer who might buy the products as a gift and be utterly disappointed when they get home only to find things are not what they should be. It takes a lot more work than small-batch production but it’s not worth risking letting products go if you’re not happy with them.
The detail is absolutely critical if you want to come out of the order with any profit. There’s no point in working with larger retailers if there’s no profit to reinvest into the company and new products.
How does dealing with large wholesale orders affect your creative process?
The scenarios for larger orders are different to one-offs and small-batch production – we perhaps have to consider production techniques far more than before and very much earlier in the process. If you get your costing wrong over a few products, then the damage can be minimal, but if you’re wrong across thousands then it can be catastrophic for a small business. Creatively speaking, this can make for a very challenging process, but it makes you think much more deeply and not to be so casual. Anthropologie have a very distinct style and place in the market and they protect their product line and image fiercely; as a result they constantly push us for new products and things which can’t be found anywhere else. Again, this is challenging and constant, but that’s exactly what we need and what we should be about as a design-led gift company.
It’s worth noting that when it comes to seasonal buying with larger retailers, the buying seasons are so much earlier and we need to respond to that when we’re designing. We now think nothing of designing and producing for Christmas in January and February – it’s weird to begin with but something you get used to.
What was your experience of exporting to the US?
It’s like anything really, the first time is a minefield and very much a hand-holding exercise. We tried not to bother Anthropologie too much with our naivety, however we didn’t feel as though we couldn’t ask for their help when we needed it. Once you’re on your fourth or fifth order, it becomes second nature, as long as you remain thorough and ensure you meet their fairly stringent requirements.
Have you got any advice for other small designers thinking of exporting their work?
Read through all the documentation and don’t be overawed by the volume of paperwork and customs requirements – it does get easier. I remember we had a shipment that went through two borders and was stopped on both occasions because our commercial invoices and packing slips didn’t match. It was fairly nerve-racking at the time, but we did resolve it. A good relationship with you freight company is worth its weight in these circumstances.
Consistency is critical and many larger retailers have quality procedures to spot check products. If you’re found to be supplying sub-standard goods then you can get hit with an invoice penalty or lose your supplier status altogether.
Were you prepared for your success?
No, not at all! We were very much unprepared for this level of production – although we’re pretty experienced with working with high-profile customers from previous jobs, it’s quite different when it comes to designing and selling your own products. I still think our systems have some way to go before they are robust enough to deal with higher-volume orders. For now, we’ll keep taking the orders and figuring out how to fulfil them as we go along. It’s probably not recommended, as it can create a high-pressured situation, but we seem to get by OK.
Is there anything you wish you’d known or done before you were first approached?
Yes, be more prepared! There’s always so much to learn and get your head around, but nothing is insurmountable.
Has it led to other exciting things?
To be quite honest, we’re just thrilled we’re still working with Anthropologie and that the relationship is developing and growing stronger. There have been orders from other retailers – large and small – who have seen us in Anthropologie, which is fantastic, but we’re satisfied and happy to keep producing unique and beautiful products for Anthropologie on the basis of keeping them as a customer. If you’re getting us all mushy, the really exciting thing is seeing our own work on the shelves of such a well-respected retailer, we’re still pinching ourselves, even now.
Did the order give you an excuse to visit the US stores and see your work on their shelves…
Ha! We so wish it did give us enough of an excuse to jump on a plane. There was talk earlier in the year about heading to their offices but that’s been put on hold while we fulfil orders and come up with new products for them. You never know, though, we may be jetting off to see them at some point. I think for this year, we’ve done enough travelling.