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For most online sellers, the term wholesale has to do with inventory: they go to a wholesaler, buy discounted merchandise in bulk, and resell for a profit.

But for Tana Taylor of Sacramento, California, wholesale means another way to sell her handmade folk art. It gives her a nearly year-round market for holiday items and supplements the sales she makes directly to consumers. The extra work is especially welcome since she lost her full-time job.

"I was laid off from my job in local government several years ago and have been scraping by with a combination of selling my primitive folk art, temp gigs, and unemployment insurance," she explains. "I am looking forward to getting back into the workforce, but I will always be creating and selling what I make."

Taylor, who has three Etsy stores including Prairie Primitives, doesn't sell at wholesale on Etsy itself. She belong to a private wholesale selling group on Facebook and sells through Primitives Wholesale Marketplace, a wholesale-only website.

"I signed up to learn more about Etsy Wholesale when they first announced it, however I haven't received any information about it yet. I'm looking forward to seeing what they have to offer!"

EcommerceBytes reported in September 2012 that Etsy had just launched its own wholesale marketplace. After observing wholesale transactions being conducted in an ad hoc way on the site, Etsy said it would present a series of online lessons called Wholesale 101 and set up a system to approve businesses to join Etsy Wholesale and connect them with qualified merchants.

Taylor, who creates primitive dolls, Americana, seasonal items, hearts made from antique and vintage textiles, and other products by hand, has been selling wholesale since 1994, when she had a booth at a "handmade only" wholesale show in Pennsylvania.

How does selling at wholesale work for an online seller? Taylor explained the basics:

1) Lower your prices.
At wholesale, you sell for less than your normal retail prices. "The stores buying my wares need to be able to mark up the price to make a profit when they sell the items. I don't have a set percentage discount for wholesale. Some things are easier to make (such as heart ornaments and pillows made from antique quilts), so I can sell them at a larger discount than the more complicated items (such as primitive dolls). When pricing my items for wholesale, I keep in mind that stores will usually want to sell these items at twice what they paid for them."

2) Sell at quantity.
In return for the lower prices, your volume goes up. You sell more of each item to a dealer or sales rep than you would to an individual consumer. "I have minimums when selling wholesale. On the Facebook group, I have a $50 minimum order. On the Primitives Wholesale Marketplace web site, wholesale buyers use a single shopping cart for all of the sellers so there isn't a way for each seller to have a minimum dollar amount, therefore I ask the buyer to purchase a minimum number of items; this can vary from a minimum of two for some of my primitive dolls to a dozen of some of the less expensive items such as Christmas ornaments. My biggest single wholesale order in 2012 was an order for 13 dozen Christmas ornaments."

3) Build relationships.
If you establish good relationships with buyers, you can sell to them throughout the year. "Stores place their holiday orders well in advance of the season itself. For example, this year I received orders for Halloween and Christmas items as early as March. New buyers are always discovering me so I continued to receive orders for Fall and Holiday items throughout the year. Right now (December), for example, store buyers are ordering things for Valentine's Day and Easter and, based on past experience, they will be ordering Americana items by February.

4) Know the sales reps.
It pays to get to know "sales reps." "My wholesale sales are mostly made to owners of antique stores and gift shops that specialize in primitive and rustic decor," Taylor said. "Sales reps write orders for gift shops - they are an intermediary between the store and myself. It might help to think of sales reps as a "human catalog," as they have samples of my items and/or sell sheets that show the items which I am offering wholesale.

"Two of the sales reps I've worked with walked into my booth at the wholesale show in Pennsylvania which I mentioned earlier; one of them was a "road rep" who drove around to shops in the Midwest to meet with the shop owners in person, and the other rep had a showroom at the Los Angeles Gift Mart in downtown L.A. where store owners would go to see my things and place their orders."

5) Be prepared to step up production.
"This year (2012), I have done all of the production myself. When I sold wholesale in the 1990s, I was getting so many orders that I had to hire some help. I prefer to do as much of the work myself as possible and try to space my orders out so that I can do that at a comfortable pace."

Taylor also offered advice about selling on Etsy: "Sellers should educate themselves about "relevancy," which is how Etsy's search currently operates. There are hundreds (probably thousands) of sellers who have less-than-relevant item titles and tags. Many items have pitiful descriptions, and more than a few times I've seen items for sale on Etsy that don't include important information such as measurements; a few listings include measurements but no other details, such as what the item is made from or how it's made."

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About the author:

Greg Holden is EcommerceBytes Contributing Editor. He is a journalist and the author of many books, including "Starting an Online Business For Dummies," "Go Google: 20 Ways to Reach More Customers and Build Revenue with Google Business Tools," and several books about eBay, including "How to Do Everything with Your eBay Business," second edition, and "Secrets of the eBay Millionaires," both published by Osborne-McGraw Hill. Find out more on Greg's website, which includes his blog, a list of his books, and his fiction and biographical writing.

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