Finding manufacturers of handmade jewellery was easy! I started by scouring the internet and visiting trade fairs. I had to twist a few arms to let me into some of the buyer fairs but after a few weeks I had my initial list. We realised there were a few hurdles to cross in order to get into this market but we felt that we had the edge.
We then hit a major stumbling block when we found out they didn’t want to sell to us. This might seem crazy but we’d forgotten to take a really important factor into account during our market research.
When we had contacted a few suppliers initially who we thought manufactured appropriate lines we’d been fairly vague about what we were planning. Our conversation went along the lines of; “We’d like to stock some of your lines, what are you terms?” We received in-depth information about trade pricing, payment terms, minimum orders, etc.
We were ready to confirm our intentions to order from them and we were being turned down. This reasoning was quite simple, that although they’re small businesses they didn’t want to lose control of their brand / identity. Many of the suppliers feared we could create such high demand we could become their only customer. This would leave them exposed if we decided to change to a new supplier or discontinue their product lines.
It’s important to remember that most of these businesses are what I refer to as cottage industries. A cottage industry is an individual, in this case manufacturing jewellery, who works from home and typically on a part time basis. This type of business is very much a lifestyle choice as they don’t want to take on staff, in order to keep costs down. I now know that several of our potential suppliers had young children so wanted to be a ’stay at home’ parent, but still have an income. They felt that by supplying to us they could jeopardise their existing client base and the longevity of their own business.
This was the opposite reaction to how a large wholesaler would react. A wholesaler would want a minimum spend from day one and expect steady growth in the first year.
Obviously being the entrepreneur, I don’t normally take no as an answer. I changed tactics and instead put in place steps to protect their brand values and also in some cases set maximum order values. Even though I tried to reassure many of the suppliers we still couldn’t get a step further with them. I never thought we’d be in this kind of position and this meant many of my assumptions about stock management had to be reassessed.
Despite these unforeseen issues I had a list of suppliers with the necessary information about how they operate and their stock & manufacturing capacities. With that in mind, it was now time to design our stock management process to build a solid business system around it.