If you are reading this article, you probably fall into one of these categories:
- You have your products ready and are looking to start a wholesale business selling to retailers.
- You have a business that is currently selling to consumers and is looking to expand to sell wholesale.
Whatever your reason for considering wholesale, this guide will help you understand the wholesale landscape along with what is required to successfully sell wholesale products to retailers. By the end of this guide, you will be well-equipped with actionable tips for starting a successful wholesale business.
Wholesale 101: What Is Selling Wholesale
How does selling wholesale differ from selling to consumers? The fundamental difference is that you are dealing with a business rather than an individual. Decisions are made based on the amount of revenue your product can generate for the business rather than an individual’s personal interest or need for a product. Wholesale buyers are not seeking to use the product for the experience, but instead are focused on selling your products to their customers.
Wholesale opportunities will vary depending on the type of industry you operate in and the kind of products you sell. The basic definition of “wholesale” refers to the sales opportunity for you to sell your products in bulk, usually at a discounted price, to a retailer. These retailers will then resell your products to their customers.
Let us move on to the next section and take a quick look at how selling wholesale could be a boon for your business.
Benefits of Selling Wholesale: How Selling Wholesale Can Take Your Business To Greater Heights
Selling to businesses means larger, more consistent sales, and increased brand awareness. Let’s go into more detail on each of those benefits.
Selling Wholesale Means Selling In Bulk
In wholesale sales, since you are selling to businesses rather than individual consumers, a single order tends to be large. Instead of selling only a few items to end-customers like in B2C sales, you would sell your products in quantities many times that of B2C sales orders.
This means your sales revenue will often be in the hundreds and thousands of dollars for just a single order. Depending on the types of businesses you sell to and the products you are selling, your average order values could be much higher. These large orders will propel your revenue upwards, and revenue growth will jump with each additional customer.
Consistent Income Source
When selling direct to consumers, your sales figures can vary drastically due to constantly changing consumer preferences. Your business will always face uncertainty, not knowing when your B2C customers will move on to the next trend.
However, another beauty of selling wholesale is that businesses change their purchasing habits much less than consumers. If your wholesale buyers find out that your products are selling well in their store, they will continue to order from you. Thus, your company will be able to receive income on a more consistent basis. Large retailers may even work with you to improve your product and increase your turnover.
Increase in Brand Awareness
Getting shelf space at retailers helps lift your brand’s awareness with consumers. The more stores your products are being sold at, the more exposure your brand receives. Also, when retailers carry your products, you have the opportunity to offer in-store discounts or other promotions to reach new customers and deliver your product messaging.
The increased exposure and awareness of being in a few retailers drive consumer demand, which then has the cyclical effect of influencing other retailers to want to carry your products.
Selling wholesale products to retailers is a great place for a company to be. However, setting up a wholesale business, or changing a consumer-focused business to sell wholesale, is not easy.
To ease some of that difficulty, we spoke to hundreds of successful wholesale companies to learn how they first started. We have collected and boiled all those conversations down to seven essential tips that will help you build your wholesale business.
How Do You Identify Which Retailers To Sell Your Product To
The first step to identify which retailers you should sell your product at is to conduct proper market research on your end-customer. Here are three key questions your research should seek to answer:
- Who are your target customers?
- What is their purchase journey like and what are their motivations?
- Where do they research and purchase?
After your market research has been conducted, you can start identifying prospective wholesale customers to target.
If you are looking to target online retailers, you should also understand:
- Who are their target customers?
- How do they acquire customers?
- How do they feature the products they sell online?
If you are looking to target wholesale customers who purchase for their brick and mortar stores, the best way is to head down to their store and walk around. As you browse through the store, here are some guiding questions to help you:
- Where do you envision your product to be located on the shelf?
- Where are your competitor products located?
- How much shelf space do you need?
- Does your product align with the image that the store is portraying?
With these questions addressed, you will have a better idea of which wholesale customers you can start targeting.
How Do Your Retailers Purchase?
Buying behavior differs across industry and customer types. For instance, when selling to a small boutique store, you might be dealing directly with the store owner. However, if you are dealing with a restaurant chain, you could be dealing with a dedicated buyer.
While dealing with the store owner can be relatively simple and straightforward, the same might not be said for the dedicated buyer. Since the dedicated buyer is purchasing on behalf of a few shops, he might have more demands. For example, he might place one batch of orders and expect that order to be delivered to multiple locations at different dates. Your business needs to be well-equipped to accommodate these types of asks.
Another point to take into account is the frequency in which your wholesale customers purchase. For instance, is your product seasonal? Do your customers only need your products during specific times of the year? For example, if you sell pumpkin pies, the demand will soar during special occasions such as Thanksgiving, but you can expect lower demand during the other times of the year.
A final point to take into account is your product’s shelf-life. If you are selling food products which have a short expiration date, you might have to handle smaller, more frequent orders. On the other hand, if your products have a long shelf life, your wholesale customers might not purchase from you on a regular basis. But when they do order from you, the very large purchase willl put extra demand on your production schedule