Selling Wholesale: How to get started
How do you get started selling wholesale?
That is the question we are going to help answer in this blog post.
Perhaps you already have a thriving B2C webshop and desire to venture into wholesale as well. Or maybe you are starting a brand from scratch and are keen to dive right into wholesale and B2B.
Either way, we hope this blog post can give you some inspiration on how to get started selling wholesale!
What is wholesale?
But first, let’s define wholesaling.
Wholesale is an act of buying and selling and buying goods in bulk quantities. The goods are sold wholesale to the wholesale customer, who later resell the goods in smaller batches to their customers.
The wholesale customers can resell the goods at a profit, as they are provided a bulk discount for purchasing large quantities and purchasing regularly. Typically, products sold wholesale and B2B are 1.5 – 2.5 lower than those paid by the final consumer in a B2C transaction.
Typically, there are two different business models when selling wholesale:
- Purchasing goods wholesale directly from the manufacturers and resell them – also wholesale – to your wholesale customers. If you follow this model, you are a wholesale distributor.
- Designing and manufacturing your own products that you sell wholesale to wholesale distributors and/or directly to other wholesale customers such as retailers.
How to start wholesaling your products
So how do you get started selling wholesale?
Well, there are, of course, a lot to consider – way more than we can cover in this blog post. However, in the sections below, we’ve covered 4 points to think about when you want to do wholesale.
The 4 points are:
- Finding the right products to sell
- Deciding on prices, policies, and terms
- Finding your wholesale customers
- Start selling!
For each of the 4 sections, we’ve added a link to a more in-depth blog post on the specific topic.
Now, let’s get started with the first one: How to find the right products to sell.
#1 Finding the right products to sell wholesale
Before you can start selling wholesale, obviously, you will need to figure out what you want to sell.
Skipping this point will leave you with little chance to build a wholesale business. After all, you won’t have anything to sell wholesale!
If you are already contemplating building a business selling wholesale, there is a fair chance that you already know what type of products you want to sell. If you need some inspiration, we made a blog post on how to find the right products for B2B e-commerce.
In short, it is a good idea to sell products that you are passionate about and that there is a demand for. Then you cant go completely wrong.
#2 Deciding on Prices, policies, and terms
Once you’ve chosen what products to sell wholesale, you need to decide on prices, policies, and terms.
Undoubtedly, a fundamental part of wholesaling is setting your prices most accurately. You want to make sure that your prices are low enough that they will be attractive to retailers and yet sufficiently high enough to make a profit.
A rule of thumb is to set your wholesale prices 2.5 times your production costs and 50% lower than your retail rates. So if we assume that the production cost of one unit is $1, the wholesale price would be $2.5, and the suggested retail price lands at $5.
For more input on how to set your wholesale prices, you can read this blog post: Wholesale pricing – what is it and how do you get it right.
Policies and terms
It’s is also necessary to have your sales policy and trade terms in order before selling your first wholesale order.
Wholesale customers are going to ask about your minimum order amount (minimum opening order amount and minimum amount for reorders). Most of them are also interested in payment terms and incoterms. And last but not least, whether they are eligible for any discounts if they purchase certain products or quantities.
You want to make sure you have considered these questions before you reach out to potential wholesale customers.
#3 Finding your wholesale customers
Having most of the practicalities in order, it’s time to find some wholesale customers. In most cases, these customers will be retail stores – either physical brick-and-mortar stores or online B2C webshops.
When scouting for potential customers, you must target retail stores that are a good fit for your products. Ask yourself: “Who is my target customer? Where do they do their shopping? What retail stores are my competitors in? How do I want my products portrayed?”
If you are selling niche gourmet food, you probably shouldn’t waste time trying to get your product on the shelves in Walmart.
Once you’ve done some research and have a list of retail store prospects, reach out to them. You can give them a call or send them an email pitching your products. But if they are within driving distance, we recommend that you visit them.
To learn more on how to get your first retailers (and why we recommend visiting them), you can read this blog post: How to get your products in stores.
#4 Start selling wholesale
Once you have the practicalities in order and made connections to some retail stores, it’s finally time for the fun stuff: Selling your products!
To get your new wholesale customer to order your products, you need to make your products and wholesale prices available to them. Traditionally, wholesale brands have been sending catalogs, price lists, line sheets, etc. to get retail stores to purchase their products. Today, the way to market products through catalogs has evolved into more digital solutions which enables a much more time and cost-effective way of promoting collections.
While it’s tempting to make a simple wholesale price list in Excel and send it to customers by email, there is a much better alternative; A standalone wholesale website.
A Wholesale website is a webshop dedicated to your wholesale customers. Your wholesale customers have their own login and order from your wholesale site as they would from any other traditional eCommerce shop.
There are a lot of things to consider when building your wholesale website. You should make sure that you add all of the necessary information that your wholesale customers need when purchasing your products. That is:
- General ordering information and sales terms
- Products names, descriptions, sizes, colors, etc.
- Product images – preferably with a white background to avoid distractions.
- Wholesale prices and recommended retail prices (RRP)
Also, you should make sure that your wholesale shop is well-designed and easy to navigate. This way, you ensure the best conditions for your wholesale customers ordering. In the end, this could mean more sales.
If you are looking for a wholesale website you can get started with quickly, you can sign up for a free version here.
The wholesale world is huge and often horrifying for newcomers. Compared to selling retail, wholesale is costlier to get started with and is subject to more regulations.
But if you do your research and are willing to work hard, the potential to grow a big business (and profits) is better than in retail. So if you do your homework – and follow the guidelines in this blog post – you can expect to get rewarded sooner or later.