At some point, every business owner faces the dilemma of scale. Whether you’re opening a secondbrick-and-mortar location, doing a brisk weekend trade at crafts fairs, or selling handmade custom jewelry online, the question is the same for everyone: how to grow your business and increase revenue when you only have so many hours in the day.
One of the simplest ways to scale a successful retail business is to sell more products (of course, this is easier said than done). But one common approach to achieving higher product sales is through wholesale opportunities.
Wholesale selling is a great way to scale your revenue without a heavy investment in marketing and advertising.
Instead of trying to painstakingly increase the number of customers you sell individual products to, you can simply sell a large number of items to a handful of wholesale buyers. The concept is simple enough, and depending on thetype of businessyou run, you may already be familiar withwholesale from the buyer's perspective, but it’s a great option to consider as a seller, too.
Despite the simplicity of wholesale in theory, there are some factors you’ll want to take into consideration when deciding whether wholesale is the best approach for your business model and offering.
Table of Contents
What are wholesale opportunities?
How is wholesale different from the direct-to-customer selling you’ve done so far? The most obvious difference is that you’re dealing with a business rather than an individual, and they’re making decisions based on how much money your product will make them rather than buying an item for themselves. You won’t be able to rely on marketing the product as an experience. Instead, you’ll want to set up a wholesale system to make it as easy as possible for the buyer to get your products out on their shelves and selling as quickly as possible.
There are some variations in how wholesale opportunities will look, depending on what type of product you sell, but on a basic level, “wholesale” refers to any sales opportunity whereby you sell a large quantity of your product (usually at a discounted “wholesale” price) to a second-party retailer (with abrand license) that will resell those items to their own customers.
If you sell any sort of physical product, there will almost certainly be some opportunity to get into wholesale.
For more mainstream or inexpensive items, you could look into selling to large chain stores like Target or Walmart. If you sell fashion, luxury, or other niche items, you’ll want to initially pitch small boutiques. Start raising awareness of your brand via relevant influencers and PR campaigns before trying to target more prominent buyers.
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The pros and cons of wholesaling your products
Pros of wholesale opportunities
There are many benefits to wholesaling your products, including:
- Increased order volume.You can implement aminimum order quantity (MOQ)and offer pricing tiers (where the unit price decreases incrementally as orders get larger) to incentivize a high volume of orders per wholesale buyer.
- More consistent income.If your wholesale buyers find that your products are successful in their stores, they’ll continue to order from you—and you’ll generate consistent income (possibly even more around holidays).
- Marketing support.When your products are being sold by other retailers, they may be doing their own marketing for the products in addition to your own marketing and advertising efforts.
- Increased brand and product exposure.Because your products are featured in other retail stores, customers who otherwise might not know about your brand will see your products. They’ll be able to find out more about your business and offerings, as well as purchase your products where they already shop.
- Improved trustworthiness and credibility.If you’re trying to combat an image of being a hobbyist or simply having aside hustle, going wholesale can help solidify your standing as a “legit” business.
Given these benefits, is there any reason why someone wouldn’t want to go down the wholesale route?
There are a few potential negatives that you’ll want to take into consideration when making the decision to move into the world of wholesale.
Cons of wholesale opportunities
- Lower profit margin.You’ll have to sell your individual items at a lower unit price in order to make it worthwhile for a retailer to sell your products and make a profit themselves.
- Requires higher volume of production.Before you cansell wholesale, you’ll want to make sure your production methods are able to handle a high volume of orders in a timely manner. For very delicate, handcrafted products, wholesale may not be a good approach (unless you choose to shift the way you produce your goods—for instance, offer a cheaper, more easily mass-produced version of your product, such as prints of original artwork, hiring additional employees to assist with product creation, or offering small scale wholesale arrangements with boutiques and local retailers, etc.).
- Potential loss of marketing control.It may be harder to control all marketing messages if your wholesale buyers are promoting your products through their marketing channels (although you can define what is acceptable in your terms and conditions).
- Likelihood of delayed payment.Depending on the terms you agree to, you may not receive payment right away for your first shipment. Many larger retailers will want to pay with a net 30 or even net 60 arrangement, meaning they can pay up to 30 or up to 60 days after receiving your invoice. You’ll need to have enough capital available to float the cost of manufacturing until you receive the payment—so it pays to plan ahead. If this isn’t an option for you, it’s easier to negotiate with smaller specialty boutiques—you could even ask for payment upfront.
- Different sales strategy.Even if you’re very successful in the B2C market, you’ll have to develop a differentsales strategyfor pitching to retailers and wholesale buyers. Wholesale selling is very relationship-based and requires you to be comfortable going to sales meetings and pitching your product line 1:1 to a retail buyer. Trade shows are also a big part of wholesaling and, depending on the show, they can be very expensive.
How to find wholesale opportunities
Once you’ve decided to offer wholesale, your first step is to make sure you have all the logistical elements in place. This will not only ensure you’re prepared to fulfill any wholesale orders that do come in, but it also will help you determine what sort of opportunities to look for first.
There are a few basic things you’ll want to clear up in order to get started with wholesale:
Wholesale pricing
- Do you know what your wholesale price rate is?
- 会有起订量吗?
- Will you offer pricing tiers for higher volume orders?
- Are you comfortable with the fact that you can’t undercut your wholesale retailers on price without potentially causing hard feelings?
WHOLESALE PRICING TIP:一般的经验法则是,你的零售价格is 2.5 times your wholesale price, but there are other ways todetermine the wholesale price(takingbreak-even pointand profit margin into account).
Use Shopify’sfree wholesale gross profit margin calculatorto determine your wholesale prices.
Packaging
How will you package your items? Attention to detail is important. If you state on the order form that your items come with hangers, for example, and then send them without the hangers, this could cause issues with your wholesale customers.
Product photos and information
Like any sales pitch, having beautiful images and detailed information about your products is essential when convincing a retailer to buy from you.
Line sheet and order form
- It’s very important to have a line sheet ready to go when you start meeting with buyers. This is basically the information packet for all your products, with photos, descriptions, pricing, and policies.
- If you’re not sure how to make one, you can check out some free templateshereandhere.
- You’ll also want to have a purchase order form ready to go, in case the buyer wants to order immediately at the end of the meeting.
GET STARTED:Only Shopify comes with built-in features that help yousell B2B and DTCfrom a single store or platform. Tailor the shopping experience for each buyer with customized product and pricing publishing, quantity rules, payment terms, and more—no third-party apps or coding required.
Once you have your wholesale program figured out and clearly shown in your line sheet, the next step is identifying wholesale opportunities for pitching.
You’ll want to create a “buyer profile” to help ensure that you pitch the right people. You can learn more about how to do this inthis guide from Indie Brand Builder.
The next step is to find the companies that fit your buyer profile. Start by Googling the types of businesses you think would be a good fit. For instance, if you sell handmade jewelry with an old-fashioned vibe, you might want to search for local vintage boutiques that could sell your jewelry alongside their clothing.
你可以得到他们的联系信息和要求et up a meeting to pitch your product.
For more wholesale opportunities it’s also important to make sure your products are visible in the traditional places retailers look for new products:
- Advertise in trade publications that target retailers
- Attendtrade shows
- Get yourself listed on wholesale marketplaces and directories, likeFaireorTundra.
For more artistic, luxury high-end items, you’ll also want to look into:
- Consignment.Niche boutiques might initially sell your products onconsignmentand eventually transition into a wholesale arrangement.
- Influencer marketing.Sending your products to relevantinfluencerscan be a good way to get your brand in front of high-end buyers and prove that there is an audience for your work.
FURTHER READING:Learn more about building an influencer marketing strategy with ourguide to pitching paid brand evangelists.
How to assess wholesale opportunities
So, you’ve got your wholesale program figured out, you’ve got a list of people to reach out to, maybe you’re even receiving some inquiries thanks to your directory listings and trade publication ads. But how do you decide which opportunities are a good fit?
Here are some criteria to bear in mind when you’re trying to assess whether a wholesale lead is a good fit for your business:
- Financial risk.Are they creditworthy? You may want to run a credit check if they are requesting credit-based payment terms (net 30, net 60, etc). And are you able to cover the initial cost of any order they would be prepared to make?
- Potential competition.Are they likely to be selling to your existing customers or competing with other wholesale partners?
- Current merchandise.Do they currently stock brands that are aligned with your brand? Will it look good for your products to be seen sitting next to their other merchandise?
- Initial order requirements.Do you want a particular amount of shelf space or specific placement of theproduct displayin order to give your product a good shot at making a first impression? This is something that should be agreed on in advance.
Additional resources for wholesale opportunities
For some extra inspiration, check out theRush Sports case studyto learn what it’s like to transition to a wholesale-only business model. Or, if you’re feeling ready to make the leap to wholesale, check out ourguide to selling wholesale.
Are you planning to wholesale your items to scale your business? Share your experiences in the comments below.
Additional research and content fromAlexis Damen.
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Wholesale opportunities FAQ
What does it mean to sell wholesale?
To sell wholesale means to sell a large quantity of goods at once to other retailers and at a lower price than you would sell the same products directly to customers for.
How do I get involved in wholesale?
Follow these steps to get started with wholesaling:
- Research your local market
- Create a list of local buyers
- Contact potential buyers
- Send product samples
- Confirm orders
- 产生一个d ship orders
Once you’ve streamlined your wholesale processes locally, you can work on expanding to different regions or countries.
