Mastering Retail: A Comprehensive Guide for Crafters and Artists Venturing into Retail Supply

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Since launching Allster, we’ve introduced over 100 crafters, makers and artists to our retail store in Belfast International Airport. For many of those suppliers, Allster was their first retail outlet. This guide helps break down some of the barriers you’ve faced if you’re thinking of supplying to retail for the first time and demystifies some of the key areas.

Breaking into the retail world can feel like navigating through uncharted waters for many first-time crafters and artists. However, with a firm understanding of key concepts like barcodes, packaging, minimum order quantities (MOQ’s), margins, and brand presence, it can be a rewarding and profitable journey. This blog post aims to demystify these elements, elucidating their importance to both you as a crafter/artist and the retailer.

Barcodes serve as a universal language in the retail industry, enabling efficient tracking, inventory management, and point-of-sale transactions. As a supplier, incorporating barcodes on your products can facilitate smoother operations for retailers and make your product more appealing to stock.

Retailers are human and the humans working on the checkouts often make mistakes. Barcodes reduce the possibility of mistakes and this improves customer experience as it makes it less likely that a customer will be overcharged for a product.

Barcodes also help retailers track inventory which makes reordering more accurate. This is crucial as having the correct products in stock is key to a successful relationship between maker, retailer and customer.

A simple, free barcoding solution is Shopify barcodes. This is fine if you are just starting out but the codes are not unique to your products so won’t scale well. A more scalable solution is barcodelove.eu where you can purchase unique barcodes that belong to your products and which will work in any retailer. You simply need to print the barcodes on to some sticky labels and affix them to your product or packaging. Very few retailers will do this for you so it’s good to get in the habit early.

Product packaging is your silent salesperson. It captures attention, communicates your brand's story, and influences purchasing decisions. Thoughtfully designed and environmentally friendly packaging can significantly enhance your product's appeal to both retailers and consumers.

Good packaging also makes it easy for a customer to pick up something which they may wish to present as a gift, and can make it easy to integrate barcodes. It also serves to get your company’s brand noticed to those shoppers who may not actually buy the product, increasing the chance of a later purchase.

Minimum Order Quantities (MOQs) represent the lowest amount of your product that a retailer agrees to purchase. Setting an MOQ benefits you by ensuring a minimum level of revenue and helps retailers manage their inventory. However, it's essential to strike a balance - setting it too high could deter smaller retailers. If you have never been in retail before, you won’t have any data to be able to demonstrate to retailers how likely your products are to sell, or how fast that will happen. Without data, retailers will be concerned about tying up cash in dead stock.

While you’re right to think about MOQ’s in terms of how much time and effort it takes you to make and supply the goods, the absence of data will put many retailers off your products. You should consider MOQ’s as part of the overall picture when deciding if you should insist on them or not.

Margins are crucial for both you and the retailer. It's important to understand the costs involved in producing your products to set a wholesale price that ensures profitability for both parties. A good starting point is to aim for a 50% margin but this is not set in stone. Different product categories often have different margins.

Bear in mind that the retailer isn’t just looking at your products in isolation. If they have similar products then they will compare your margin to that of those similar products. Retailers are less likely to bring new products in store if the margins are lower than their existing products. This is because they don’t want to cannibalise their sales and reduce their overall margin.

And it may sound obvious but don’t forget that most retailers will have to charge sales tax which will impact the margin. This is the case even if you don’t have to charge sales tax when you are selling online or in markets. So remember to take into account sales tax when calculating the retailer’s margin. In the UK, this means that most retailers will have to take 20% off the RRP before calculating their gross margin.

A strong brand presence is critical in today's saturated market. This includes a clear brand story, appealing visuals, and a consistent online presence. Remember, retailers are more likely to stock products from brands that consumers recognize and trust.

This can have big benefits to you as a supplier to retail. With strong brand presence, even if your products don’t sell to every single shopper, many of them will notice your brand name or logo. This is a longer term benefit than immediate sales but one which is crucial when it comes to building your brand over a longer period.

Remember retailers are going to be reluctant to invest in point of sale (POS) displays to support new, untested products and brands so any help you can provide by supplying your goods with tools, displays and signage to help them sell will benefit you through brand awareness growth and both of you through increased sales.

As a new supplier to retail, you’re probably wondering about cash flow and getting paid. Your retailer has probably informed you of their payment terms and you may have questions about what is best for you.

There is no perfect answer to this and it’s a question you should consider as part of everything else affecting your decision to move into retail.

Payment made to you 30 days after delivery of your products to the retailer is a standard approach. However, depending on your position on MOQ’s and the importance of brand presence, you may wish to consider operating on Sale or Return.

In this scenario, the retailer pays you only when the goods sell. This helps the retailer derisk bringing in your products to their store and therefore makes it easier for them to say yes.

In return you may wish to ask for a more prominent location in store or commitment that the retailer will display your products in a particular way (perhaps using the POS items you can provide to them). This will help you grow your brand awareness and improve the likelihood of sales occurring.

Venturing into the retail world as a supplier for the first time can be an exciting and profitable endeavour. There is no perfect method that applies to every relationship between supplier and retailer. By understanding and effectively implementing key retail elements like barcodes, packaging, MOQs, margins, and brand presence, you can make the journey smoother and more rewarding. This article has hopefully given you a good understanding of the different perspectives, risks and rewards of venturing down this path.