Episode 669: "I want to grow and expand my wholesale business- help!" | Coaching Session
Podcast Information:
- Title: The Product Boss Podcast
- Host: Jacqueline Snyder
- Description: A business podcast for product entrepreneurs, balancing life and business to help you create your dream life.
- Featured In: Inc., Forbes, NBC News, Yahoo! Finance
- Notable Achievements: Co-founder of the Shop 1 in 5 pledge, recognized as "the country's most sought-after product experts."
Introduction
In Episode 669 of The Product Boss Podcast, host Jacqueline Snyder conducts a deep-dive coaching session with Elizabeth of Brighton House Decor. This episode focuses on helping Elizabeth navigate the complexities of expanding her wholesale business amidst a significant pivot in her product offerings.
1. Guest Introduction and Business Background [00:59]
Elizabeth begins by outlining her business journey:
- Initial Focus: Corporate event decor.
- Pandemic Pivot: With the onset of COVID-19 lockdowns, Elizabeth transitioned to selling homewares.
- Current Product Line: Watercolor illustrated map designs of Australia, including tea towels, aprons, tote bags, greeting cards, and postcards.
Notable Quote:
"I have spent so many hours studying it all. I've discovered what makes them successful, what mistakes they could have avoided..."
— Jacqueline Snyder [00:37]
2. Revenue Streams and Sales Channels [06:25]
Elizabeth details her revenue distribution:
- Brighton House Decor (Retail Website):
- Current Year: $18,500
- Previous Year: $63,000
- Palatable Tea Towels (Wholesale Website):
- Current Year: Just under $32,000
- Previous Year: $27,600
- Hard to Find (Retail Gift Shop): Accounts for approximately 5% of total sales. Elizabeth discontinued Google Shopping ads due to cost inefficiency.
Notable Quote:
"I'm definitely getting more sales from Palatable Tea Towels as I sell off homewares items in Brighton House Decor and concentrate on the tourist map range."
— Elizabeth [07:59]
3. Pricing Strategy and Profit Margins [08:15]
The conversation shifts to Elizabeth's pricing strategy and product quality challenges:
- High-Ticket Items: Previously sold gold palm tree floor lamps at $1,399 each but faced quality control issues.
- Current Focus: Tea towels with improved profit margins.
- Initial Pricing: Launched at $35 each with a gross margin of 388%.
- Adjusted Pricing: Reduced to $29 to align with retailer feedback, resulting in a gross margin of 319%.
Host's Insight:
"Sometimes even decreasing your prices by 1 to $2 and keeping a profit margin that makes sense can lead to a significant increase in sales."
— Jacqueline Snyder [15:14]
Notable Quote:
"I'd rather you be profitable. Take more money home, more money to invest back in the company than the vanity metric."
— Jacqueline Snyder [13:38]
4. Wholesale Expansion Strategies [16:50]
Elizabeth expresses her ambition to grow her retailer base from 120 to 500 across Australia. Jacqueline provides actionable strategies:
- Consistent Outreach: Establish a regular cadence for contacting retailers, such as reaching out to 30 stores weekly.
- Tracking System: Implement a spreadsheet or CRM to monitor interactions, reorder timelines, and follow-ups.
- Feedback Collection: Engage with top buyers to gather insights on pricing and product preferences.
Notable Quote:
"We're not going to sit passively by anymore. The best way to grow your wholesale is by setting a daily or weekly outreach goal and then actually doing it."
— Jacqueline Snyder [17:10]
5. Product Offering and Merchandising [20:40]
Jacqueline advises Elizabeth to streamline her product offerings to enhance focus and profitability:
- Core Products: Emphasize map-themed tea towels, greeting cards, and tote bags.
- Non-Performing Products: Consider phasing out aprons due to lower demand and aesthetic mismatches.
- Bundling Opportunities: Create themed bundles (e.g., "Wine Lover Bundle") to cater to specific customer segments and increase sales.
Notable Quote:
"If you can curate and merchandise, then I think you can mix it. But I don't want you to treat it like a liquidation event..."
— Jacqueline Snyder [26:26]
6. Overcoming Challenges and Adaptation [28:52]
Elizabeth shares hurdles faced during the transition:
- Product Quality Issues: Inconsistent quality from manufacturers led to refunds and customer complaints about excessive, non-eco-friendly packaging.
- Pricing Concerns: Balancing competitive pricing with maintaining healthy profit margins without appearing cheap.
Host's Reassurance:
"If you have a really good profit margin and you're not seeing as many sales, you could still test and try the pricing because maybe we've gone just above what the market will bear."
— Jacqueline Snyder [16:56]
7. Actionable Steps and Plan Development [35:55]
Jacqueline outlines a strategic plan for Elizabeth to achieve her wholesale goals:
- Set Outreach Goals: Define daily or weekly targets for contacting potential retailers.
- Implement Follow-Up Cadence: Reach out to retailers 30 days post-initial order to encourage reorders.
- Optimize Product Bundles: Develop simple, attractive bundles that address specific customer needs without overwhelming them.
- Leverage Feedback: Use insights from existing top buyers to adjust pricing and product offerings.
- Inventory Management: Focus on selling existing inventory through targeted offers and strategic pricing.
Notable Quote:
"Staying focused is the fuel to your sales engine. That is the very, very first part. We need you to stay focused in your business before you can expand."
— Jacqueline Snyder [40:00]
8. Conclusion and Encouragement [39:33]
Jacqueline commends Elizabeth on her progress and product quality, expressing confidence in her ability to scale effectively. She emphasizes the importance of focus, systematic outreach, and maintaining strong relationships with retailers to drive sustainable growth.
Final Thoughts:
- Focus on Core Strengths: By concentrating on map-themed products, Elizabeth can streamline operations and marketing efforts.
- Structured Outreach: A disciplined approach to contacting retailers will facilitate the expansion of her wholesale network.
- Continuous Improvement: Regularly assessing product performance and customer feedback will ensure Elizabeth's offerings remain relevant and desirable.
Notable Quote:
"When it comes to running a successful business, you can't really pour from an empty cup."
— Jacqueline Snyder [30:00]
Key Takeaways
- Strategic Pivoting: Adapting product lines in response to market changes can sustain and grow a business during challenging times.
- Pricing Balance: Finding the sweet spot between competitive pricing and healthy profit margins is crucial for increasing sales without sacrificing profitability.
- Consistent Outreach: Establishing a regular routine for contacting and following up with retailers is essential for expanding wholesale reach.
- Product Focus: Concentrating on bestselling products and curating offers can prevent customer overwhelm and increase conversion rates.
- Feedback Utilization: Leveraging insights from existing customers can guide pricing adjustments and product improvements.
Final Thoughts
This episode of The Product Boss Podcast serves as a valuable blueprint for product entrepreneurs looking to scale their wholesale operations. Through Elizabeth's real-world challenges and Jacqueline's expert guidance, listeners gain actionable strategies to refine their business models, optimize pricing, and expand their retail partnerships effectively.
Don’t Miss Out: If you found this coaching session insightful, subscribe to The Product Boss Podcast for more expert advice and actionable strategies to elevate your product-based business.