Most eCommerce businesses start small with an online store, a few products, and a handful of employees. However, there comes a time for every small business to leap larger profits. Selling wholesale can be that leap of faith, allowing you to scale your business and sell in bulk.
Wholesaling offers two-way benefits to the retailer by providing new products to sell without the need for R&D and the wholesaler in the form of access to the established markets and audience of the retailers.
Whether you are a beginner or an established eCommerce business, looking for avenues of growth is an ongoing game. And wholesale is one of the leaps to boost your profits. This article will deliver the what, why, and how of stepping into the wholesale market.
Continue reading to learn about key strategies from choosing a niche to building a strong wholesale storefront. It will help you increase your brand awareness and take your wholesale store to another level of success.
What is Wholesale?
Wholesale is a B2B business model, where you sell products in bulk to the retailers instead of individual customers directly.
Some wholesalers sell their manufactured goods while others resell the goods purchased from a manufacturer, acting as the middleman between manufacturing companies and retailers.
How Does Wholesale Work?
Wholesalers sell their products to a few retailers in bulk at low prices. The discounted price of goods purchased from the wholesaler allows retailers to profit by selling goods to consumers at higher prices.
A good example of this business model is your local supermarket. It periodically purchases products from wholesale brands and sells them to individual customers in large quantities.
As a wholesaler, you only have to maintain relationships with a few retailers and set a recursive income for your business. You can even sell to consumers as well to upscale your wholesale business.
Benefits of Selling Wholesale:
Low Marketing Expenses
Wholesalers deal with a smaller and specific audience of retailers dealing in your niche. You don’t need to spend money on marketing to reach individual buyers. You don’t have to spend on marketing to acquire new customers.
Increased Brand Awareness & Market Expansion
Wholesalers have more time to focus on improving their products and brand. When your products find their way to the shelves of your partner retailers, they build brand recognition. By partnering with the right retailer, you can leverage their brand identity to attract more opportunities.
With wholesale, you can break into established markets by avoiding the warehousing and logistics costs and benefit from the established supply chain.
Based on your relationship with retailers, you can expand your market base to niches that are not the same as yours but related and can complement your products. If you are a wholesaler dealing with furniture-grade wood, you can collaborate with furniture designers.
Reduced Overheads
Being a wholesaler, you don’t bear the costs of packaging and shipping each product to individual customers. This way, you save yourself overhead expenses. Despite selling goods in bulk at discounted prices, you can churn out profits for yourself with reduced overheads.
5 Tips For Starting Wholesale Business
1. Determine Your Niche and Product
To begin a wholesale business, you need to determine the market you want to serve and the product you want to sell in bulk. Wholesaling options range from electronics to food, jewelry, clothing, etc. Choose a niche with consistent demand. Starting with a reliable product is best to expand your product offering. Also, It’s recommended to begin with a single product and then adopt more products as your business grows.
2. Build Your Wholesale Storefront
Like retail stores sell products online to individual consumers through a storefront (website), build a dedicated wholesale storefront for your customers (retailers).
In addition to having a wholesale website, you can tap into wholesale marketplaces to expand your customer base. Choose marketplaces like Shopify Wholesale that integrate with your existing sales channel easily. If you are a consumer business looking to expand your customer base to.
3. Identify Relevant Retailers and Build Your Network
A resilient retailer network operates at the core of successful wholesale business. Research retailers working in your niche to develop retail partnerships.
You can connect with eBay and Amazon sellers to sell your products wholesale for them to sell online. Contact retail stores and wholesale buyers dealing in your products. Attend trade shows to meet potential businesses interested in partnering with you.
4. Develop a Solid Pricing Strategy
A solid product pricing strategy is a must to run any business. Consider your business expenses while devising a pricing structure. Also, setting a minimum quantity as an ordering requirement lets you determine your margin against an order. The price of your product should neither be as low to compete with your wholesaler supplier nor so high, leaving no margin for the retailer to earn profit.
5. Offer Competitive Deals
Use incentives to attract and retain retail buyers. Research the needs of your potential retailers and convert them with offers that meet their needs. To encourage retailers to do business with you, you can offer discount deals on a specific quantity of products, tiered pricing, and first-order deals.
Also, you can offer low quantity orders for small or beginner businesses and take advantage of seasonal demands or supply shortages. Offer free shipping on certain order volumes and for specific locations. Provide test samples to retailers and free samples for retailers’ customers. You can also bundle deals and subscriptions based on the retailer’s needs.
Running a wholesale business isn’t an easy pill and requires blood and sweat to establish. You have to wear many shoes as a wholesaler, from managing inventory to maintaining relationships with retailers, bookkeeping, and order and supply management.
To help ease your burden, try Syncerize; it is a multi-store management Shopify App that synchronizes product inventory, product properties, and orders across multiple Shopify stores in real-time.
