Common Wholesale Terms You NEED TO KNOW!
So what exactly is wholesale? This might be totally obvious but when selling wholesale you need to follow certain rules and industry standards. When approaching retailers you need to go in knowing what you are talking about. You want to come off like a professional so you are taken seriously and don’t get taken advantage of.
Here are common wholesale terms and industry standards you need to know!
RETAIL PRICE
Your Retail Price is what you sell your products for at Full Price (i.e. your website, Etsy shop, markets, etc.)
WHOLESALE PRICE
Your Wholesale Price is 50% off your Retail Price (depending on your product this percentage can vary, but 50% off your retail price is a pretty standard rule of thumb)
MINIMUM ORDER QUANTITY (MOQ)
When purchasing wholesale, retailers can’t purchase one single card design. There is a Minimum Order Quantity (MOQ) The industry standard for greeting cards is 6. For example, if they want to purchase a certain Happy Birthday greeting card design then they need to purchase 6 of that same style. The same goes for all the other styles/designs.
For other product categories I would recommend 3-5 depending on the product. Think about how much of each product category you want to keep in stock, and how much you can AFFORD to keep in stock. If you don’t want to keep a bunch of inventory at a time I would recommend choosing a loser number. If it’s a product you want to move quicker I would recommend I higher MOQ.
OPENING ORDER MINIMUM (OOM)
When stores place a wholesale order they HAVE to spend a certain amount of money. This is your Opening Order Minimum. For greeting card companies the average is $125-$150, depending on your product offerings. Lots of times I see people saying they have their OOM set to something really low or they don’t have one at all! I would advise against this. Yes, you don’t want to discourage people to try out your line for the first time, but you don’t want to openly encourage very small orders. If your product range is robust enough they should have no problem investing in you and your product line at an OOM that is fair.
REORDER MINIMUM
This is the amount of money a retailer must spend when they place a re-order of your products, a.k.a anytime after the first order. This amount is less than your opening order minimum. I suggest around $90-$100.
SKUS
The assigned number by category that retailers will use to identify your products. Example: SALTY_LOVE_1 ( A SKU for one of my Witty Love Cards) or SWEET_FRIEND_02 (a SKU for one of my Sweet Friendship Cards).
I would recommend making a master spreadsheet of ALL your product offerings and assigning them a short name and a SKU number. Here are a few examples of mine.
SALTY_LOVE_01 - Soul on Fire
SALTY_LOVE_02 - Waking Up Next to You
SALTY_LOVE_03 - Happy Hour with you
SALTY_LOVE_04 - Drunk in Love
Remember wholesale is a marathon not a sprint. It’s a numbers game, so the more people you reach out to about your products, the better chance you have in making the sale. Retailers want to know you are a brand that is sustainable and is going to be around for the long haul. At the end of the day it’s about building relationships. If you’re a new brand then you’re a stranger to these buyers. You need to wine and dine them a little bit, get to know them, show engagement, and be a kind human who cares and provides value! Take some time getting to know your potential customer and letting people get to know you and you’ll start to see a huge difference in your wholesale selling strategy.
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