Developing a Line Sheet

You're ready to enter the wholesale market. You've categorized your products and developed an inventory system. Now it's time to develop your line sheet.

What's that? A line sheet is a one or two page document which conveys information about your company, your products, as well as your payment, delivery and return policies.

Following are the key items you'll need to include:

1. Your contact information - As with your stationery and all your marketing materials, include your contact information, especially email address and telephone number.  This is not the place for your Facebook or Twitter addresses! They goal is to make it simple for the buyer to contact you, not for them to be impressed with each and every one of your social media efforts. If you are working with a sales representative, consider replacing your contact information with theirs.  Your rep will thank you for this simple gesture!
2. Basic information on your products - Wholesale pricing, colors, and sizes available are key elements here. If you have developed your inventory and have a unique identifier for each item, include it here.
3. Minimum quantities - What is your minimum order? Make it realistic yet encourage your buyer. Remember, the goal in wholesale selling is to sell a larger quantity of items - in doing so, you can lower your supply costs and increase economies of scale and time! For example, I have a minimum order of $100, which is fairly easy to achieve.  Using easy numbers, selling a case (12) of candles for $10 each is $120.  the quantity makes sense and it achieves the minimum order I require.
4. General information about your product - What are your materials? Do you have a unique assembly method? Are your supplies eco-friendly? This is the spot to turn your features into benefits.
5. Payment terms - Here's an area you may need to beef up your accounting terminology. Are your terms net 30 (payment due 30 days after receipt of product), upon delivery, or up front? I offer a combination - I just don't have time to do a credit analysis, so first time orders require a credit card payment, and following orders are net 30. 
6. Turn around time - How long can the buyer expect between date of order and date of receipt of product? If your turn around time is four weeks or more, you really need to be thinking in advance regarding the seasonality of your product. If you're able to have product inventory on hand, consider a two week or less turn around time.
7. Shipment - Answer questions such as who pays? Which carrier do you use? Think creatively as to whether you can offer a discount on shipping for larger orders.
8. Damages and returns - This was the hardest part for me. If you're going to play with the big guys, you need to be prepared to offer refunds and returns like the big guys. Know what your competition is doing, even if you're reaching for the stars. But make sure your return or refund is something you're willing or able to lose. You may be able to write in a restocking fee here, but always be prepared to accommodate a 100% refund!

As I've mentioned before, I use Stitchlabs for my inventory management system. One of the reasons I chose it was because it could take the information I developed on each product family, the inventory and stock photos and create a .pdf file for me. While I'm not endorsing nor encouraging use of this product, I do recommend you research whether the inventory system you're considering can do this for you as well.

So those are your key elements. If you foresee selling wholesale in your future, I highly recommend you begin working on these elements now! In future posts, we'll discuss how to take this technical information and turn it into a marketing piece.

As always, I welcome your feedback and questions.  Until then, happy sales!

Dorene

Inventory Management, Part 2

As your business continues to grow, you'll need to develop a system for inventory management. In a previous post, we discussed the why an inventory management system is necessary; today we'll discuss how to develop your system.

Consider the variety of your products. What do they have in common? If you develop a variety of products, try to align them similar to how you would shop a department store: bedding, kitchen, clothing, decor. If your products are in a similar line, such as jewelry, align them around similar functions: necklaces, earrings, bracelets. And don't be afraid to be specific.

When I first started my inventory management system, I grouped my products similar to the sections in my Etsy shop: container candles, tea lights, votives, etc. For the most part this worked.....but then I needed a way to differentiate between three container candles I carry.  While "container candles" creates a category of similar enough products, I have a different pricing structure for my 7 oz and 12 oz candles. So in addition to the tea lights and votives, I now have separate product categories for my 7 oz. container candles, as well as my 12 oz. status jar and 12 oz interlude jar candles.

You'll also want to be able to differentiate between sub-categories. At D'Lites by Dorene, I use a sub-category of fragrance. If your product is jewelry, you may choose a sub-category of metal or stone; if your product is paper products, you may choose a category of notecards and a sub-category of stamped or stenciled.

Why are sub-categories important? Because at some point, you'll probably want to cross reference your products to understand your best sellers. For example, I can easily identify by my Etsy sales that tea lights are my best selling product. But what if I want a better understanding of my best selling fragrance? This is where having a sub-category and the ability to sort comes in handy. Think of how you could get a better understanding of which stone sells best or whether your stenciled or stamped products are most preferred.

As I've mentioned before, I utilize the online system Stitchlabs to manage my inventory. What's nice about this system is it has already developed dashboard functionality to show my sales trends.

This can also be easily accomplished using Excel or another spreadsheet software. Here's a snapshot of the same information:

And, using a little Excel Pivot Table Magic, here are my top ten fragrances for the same time period:

But what if most items are similar but a few are unique? I have a category for my clearance items, many of which are five or less. The pricing structure is different, but it's still a way for me to collect "similar" products yet use the same formula to be able to analyze my results.

As you grow, you'll find yourself creating a unique identifier for each item - a shorthand method for you and your customers to place and to analyze sales.

What questions do you have? My intent is to "build" this information in segments.  Our next chapter will be on how to use our inventory system to develop sales sheets to distribute to retail and wholesale vendors.

Until then, Happy sales!

Dorene

Managing Your Contacts

I confess: I can be a database geek.

In my primary job, I am the Director of Data Management and Training for a local nonprofit. I work with our database and manage information on our donors, our prospects, and more and then train our staff on how to use it. I spent the majority of my time today analyzing the effectiveness of our direct mail solicitation. (I'm pleased to say our revenue in this area has grown 27% since I first started working with it!)

So, it's only natural for me to gravitate to other databases, be it for my hobbies in genealogy and knitting or my home fragrance business. My goal is to share with you today the importance of managing your contacts and information you can glean from them.

As I stated last week, I manage my inventory through Stitchlabs. I was able to begin using this platform when the basic plan was offered for free. For other Etsy sellers, Etsy offers an application with Craftybase, which seems to be most similar.

Take a minute to think about the variety of contacts in your business:

• Vendors
• Suppliers
• Customers
• Prospects

For each contact, you need to collect the following information:

• Name (individual or company)
• Contact (person at a company)
• Shipping address
• Billing address
• Phone number, including cell phone if you can get it
• Email
• Website

You may need to track additional information for each type of contact.  For vendors and suppliers you may need: 

• Tax identification number
• Resale license
• Payment terms
• Distribution agreements
• Purchase orders

For your customers and prospects, you may need to track the origin of the sale - for example, is your customer from Etsy, a craft show, or the neighborhood?

The benefit I found with Stitchlabs is the real-time sync with my Etsy shop. With every sale, a contact is created or synced, saving valuable data entry time. As you'll see in future posts, this sync also tracks your inventory and your sales.

Of course, you can track this information with a simple Excel spreadsheet or even a table in Word. Your Etsy sales are also able to be exported, which can work as long as you copy and paste current month sales and update your existing file. You'll have to be sure to clean your file for duplicates should you choose this method.

What are the benefits of managing your contacts? Here are a few benefits I have recently used:

• Invite customers to sign up for your newsletter, to follow you on Twitter, to like you on Facebook.  Be sure to check for anti-spamming laws with Twitter and Facebook, as well as with Etsy and any other online vendor.
• Create  newsletter specific to your wholesale accounts.
• Mail a "See What's New" postcard to customers, especially those who have lapsed over the past year.
• Identify your geographic spread. For example, the states I ship to the most are California, Ohio, Pennsylvania, Texas and New York. This is especially important with the recent increase in shipping rates.
• Understand the breakdown of your sales. For example, I learned 46% of my sales for 2012 came from Etsy, 28% from my wholesale accounts, 13% local customers, 11% consignment shops, and the balance from craft shows. This is great information to help me establish my 2013 sales goals and actions.
• And of course, know your best customers. I recently created a referral program to reward my best customers for their purchases.
• As my business continues to grow, I hope to be able to know just what my best customer's preferences are and to create target marketing plans for them.

Some of this does require an advanced knowledge of Excel to be able to export your file and to manipulate your data into useful information. 

What do you use to track your contacts and how do you use the information? If you don't start today, even with a simple Excel spreadsheet. You'd be surprised just what you can learn about them!