Wednesday, December 19, 2012

Selling Wholesale - Little Problems and Lessons Learned

One of the lessons I've learned from selling wholesale is that little problems become big problems, and big problems become bigger problems.

When I started selling candles, I did so because 1.) I found I was making too many to burn and to give away; and 2.) my son had graduated, my child support went away, and I needed the additional income. When I started selling wholesale, I did so because I thought the additional revenue generated from larger sales would bring in additional income.

What I learned firsthand from starting my business was that it takes money to make money. Oh, I knew that, I thought to myself. But I didn't realize at the time that little of the sales generated actually made it back to my personal cash flow. Revenue generated simply went to purchasing more supplies to generate more sales. So, it should stand to reason that it would take more cash flow to begin selling wholesale and that it would take time for everything to balance. Bigger orders simply means more revenue being spent for supply inventory.

Lesson learned from big problem #1.

Along the way I've learned lessons from problem #2 - your product has to be immaculate. Not that mine has ever been substandard, but sometimes I'm too close to it to see the minor imperfections a shop owner would see. (Which is also why I always have someone proofread any truly important piece of written word at work!) So, I've quickly learned to improve the packaging of my product and how it's shipped. People want hand crafted items, as long as the items don't look hand crafted.

This weekend I lost over $375, and I learned hard lesson #3.

There were are few imperfections and an item was broken; the buyer was completely unsatisfied and would not accept replacement products. She only wanted a total refund. And I had no policies to protect me.

No policies about refunds. No policies about returns. I called the buyer to try to correct the situation, because from my perspective every argument I was given could be fixed. But it didn't matter.  From her perspective, I needed to play with the big boys.  And if Yank** Cand** could give a total refund, so could I.

I'm not here to cry (although I've done a lot of it), and I'm not here to encourage negative conversation about how (COMPLETELY) unreasonable she was. But I am here to share the lessons I've learned. I know the moans and groans we all experience when the individual buyer complains, wants a lower price or refund, or leaves negative feedback.  But until you are able to deal with (and afford) the "small" problems the individual buyer brings, it's going to be challenging to deal with (and afford) the "small" problems the wholesale buyer brings.

So, now I have my policy on refunds. I have my policy on returns. Without trying to be unreasonable, I don't offer them, but will offer replacement product in its place. The policy will be written on all order, invoice, and shipping documentation. At least until I can afford to lose another $375.

What lessons have you learned?
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