Indie Business 101 :: Retail vs Wholesale Packaging

This is a guest post by Amy Crook, an artist and graphic designer, who makes whimsical cartoons and original abstract art, and sells handmade greeting cards and monster-themed coloring books retail and wholesale.

In addition to selling my handmade cards direct to buyers, I've started selling them wholesale to a small selection of brick-and-mortar stores. This has presented two different packaging challenges, with different costs and benefits for each of my solutions.

First up, Mail Order (aka direct to customer retail):

Here you can see everything that goes with one of my cards when I sell it online:

● The card itself, with my info printed on the back
● A matching A7 envelope
● A post-it note thanking them for their specific purchase, which also serves as their receipt
● Two mini Moo cards with art on the front, and my info on the back
● A larger, high-quality A7.1 outer envelope
● Shop-appropriate return address labels
● A sticker on the back flap of the envelope

The card and matching envelope are the only thing consistent between the two packages. For the retail packaging, the specialty outer envelopes cost about 50 cents apiece, and the postage is another 44 cents, so I'm already paying an unavoidable $1 in shipping. The Moo cards are 20 cents each, the stickers are about that as well, and the post-its are a negligable cost ($4 for a giant stack, though I'm running low!). Overall, I spend about $2, out of the $6 retail price, on materials, including cards and ink.

The benefits I get out of this packaging are a memorable branding experience that's consistent and positive, with a hand-touched feel that's people expect from buying from an artist. I can charge more than Hallmark because my cards have a very luxurious feel to them that I carry through to the packaging, so the buyer's whole experience is one of individual, handmade care. The sticker even does double duty to make sure the envelope doesn’t come open in the mail.

For wholesale, the packaging is much simpler:

You can see the card back branding here, which hopefully leads some recipients to become customers in the future.

The wholesale packaging includes:
● The card itself
● The matching envelope
● A plastic outer sleeve to protect the card from shelf wear
● A small slip of paper indicating what's printed inside (most are blank, some are not)

This time, out of the $3 I'm getting per card, I'm only spending about 50 cents each on materials. I also include a printed invoice for most wholesale orders, and a thank-you card, though spread out over the price of the order those are usually negligible costs. The “inside” paper is extra work, but it helps reduce shelf wear for the retailer, so people are less inclined to pull the cards out of their sleeves and get them dinged or dirty.

Both methods of selling have a built-in labor overhead, which accounts for the rest of the difference in pricing. I have to write out the note for each retail card I send, print and package a single card, address the envelope, and get it out to post. With wholesale, I can print the cards in batches, there's less assembly, and the buyer pays for the shipping. I usually hand-deliver to local businesses, which reinforces my branding and gets me out of the house.

A handwritten thank-you note gives both wholesale and retail buyers a feeling that I thought of them specially, and they aren't just part of an assembly line.

When considering your wholesale vs. retail packaging, keep in mind the following:

● How will the retailer display your product? Can you make this easier for them?
● Will your product have a long shelf life or be returnable, and if so, how can your packaging minimize shelf wear?
● How does the additional packaging add to your costs? Where do you save?
● Does the decrease in labor (batching, fewer handwritten notes) for a wholesale order, match the lower price that retailers pay for your product?

And finally, are all parts of all of your packaging reinforcing your brand?

Share your packaging solutions (or questions) in the comments!
 

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