Wholesaling: How to Start a Wholesale Business in 2025

Starting a wholesale business is a way for entrepreneurs to find success by focusing on operations and product development rather than direct sales or marketing.

By using a wholesale business model, you can delegate one big responsibility to retail businesses: finding customers.

This guide explains how wholesale businesses work, and how you can start one using an ecommerce platform.

Ready to start your business? Create your website today or learn more about Shopify's tools for selling online and in person.

What is a wholesale business?

A wholesale business involves buying large quantities of products from a manufacturer and selling them to a retailer. Typically, wholesale products are bought at a discounted rate, which allows wholesalers to generate a profit. The retailer then sells the products to end consumers at a higher price.

Understanding the wholesale business model

Wholesalers are an intermediary in the supply chain, managing the supply of goods from manufacturers to retailers as efficiently as possible. Because wholesalers purchase large amounts of stock, they can access lower prices and pass on those savings to retailers. Wholesalers may also help retailers source specific goods for customers.

The wholesale business model has seen changes recently, thanks in part to wholesale marketplaces like Faire. These platforms have allowed small businesses to engage in wholesale activities by increasing access to a global audience of buyers.

Whether you're using a marketplace or your online store, it's easier than ever for online businesses to sell to both retailers and consumers. You can create dedicated shopping experiences for customers, whether they're other businesses, resellers, or the end user.

How to start a wholesale business online

One of the myths about wholesale ecommerce is that you need significant cash flow and industry connections to get started. In fact, wholesale operations can be started much like you would start any business. Ecommerce tools and platforms give you ways to scale your growth, from negotiating with suppliers to reorganizing your sales channels to accommodate business-to-business (B2B) sales.

Follow these steps to start a wholesale business:

1. Decide what wholesale items to sell
2. Pick a supplier
3. Get wholesale licenses and permits
4. Set a wholesale pricing strategy
5. Create an online wholesale store with Shopify
6. Market and sell your wholesale products
7. Expand your team

1. Decide what wholesale items to sell

Picking a product niche can be overwhelming, but by creating some selection criteria, you can build a profitable wholesale catalog.

Consider these product features when choosing wholesale items to sell:

Seasonality

Some products have peak sales periods. For instance, swimsuits typically see higher sales in the summer, whereas winter drives demand for coats. Other products have more stable, year-round sales. Recognizing seasonal patterns can help when planning stock levels and marketing strategies.

Profit margin

Knowing your profit margin is crucial in any business. For example, if you buy coffee mugs for $2 and sell them to retailers for $8, your profit margin stands at $6 per mug. This figure is essential for pricing your products profitably while staying competitive. Remember, your retail customers will also need to operate with a profit margin.

Size and weight

Shipping costs can significantly affect your pricing and delivery choices. Selling smaller, lighter items, such as jewelry, generally allows for lower shipping costs. This makes it a more cost-effective choice if you're starting a wholesale business with limited capital.

Purchase frequency

Products that consumers need regularly, like printer ink or pet food, provide a more consistent revenue stream thanks to their high purchase frequency. Planning inventory for such items can be more predictable, making for a smoother operation.

Competition

Keeping an eye on your competition can reveal gaps in their product lines that you can capitalize on. For instance, if no bathroom product wholesaler offers lavender-scented handmade soaps, this scent could be your unique selling point.

Expertise

Leverage your existing knowledge to find wholesale products. If you enjoy going to the gym, for example, you'll likely have a good idea of what other fitness enthusiasts might want to buy. Perhaps you had a previous role in an industry that allowed you to connect with retailers or manufacturers. This can guide you in choosing the right wholesale items.

2. Pick a supplier

If you're not making your own products, you'll need to build relationships with manufacturers and suppliers. A stable wholesale business hinges on a reliable and consistent inventory. Retailers shy away from wholesalers who can't keep their customers' favorite products in stock.

When picking suppliers, consider these factors:

• Diversify your supplier base. Don't rely on one manufacturer or supplier. Working with several suppliers ensures you have a backup if one fails to deliver.
• Go with the most reliable options. Choose suppliers and manufacturers who have a track record of delivering on time. Delays can disrupt your business and disappoint your customers.
• Look for quality. Ensure your supplier provides high-quality products. Poor quality can harm your reputation and customer relationships.

There are many ways to connect with manufacturers and suppliers. You could reach out directly, ask to be referred by relevant people in your industry, use online supplier databases, or connect with other Shopify brands through supplier networks that let you source products without buying inventory upfront.

Setting fair rules with suppliers is critical to ensuring professionalism. For example, you might make agreements about delivery times, product quality checks, or what happens in the case of a supply issue.

3. Get wholesale licenses and permits

To keep things legal, it's important to apply for licenses and permits before starting a wholesale business.

Here are some licenses and permits you might need:

• Business license: Licenses may be required to operate in certain industries and locations.
• Sales tax permit: You may need a permit to buy goods wholesale without paying sales tax.
• Employer identification number (EIN): If you plan to hire employees, you'll need an EIN from the IRS.
• Specialized permits: Depending on what you're selling (food and beverages, for example), you might need specific permits.
• Business registration: To acquire funding and credit, you'll likely need to register your business.

Consider booking a consultation with a business adviser or local government office to ensure you have all the necessary paperwork in place.

4. Set a wholesale pricing strategy

Pricing strategies are a key component of successful wholesaling. You'll need to price products differently depending upon whether you're selling to customers online, to a small retailer, or to a large business making a bulk order.

Most successful wholesale businesses make at least 50% profit on bulk orders and look to increase profit margins when selling in smaller quantities.

Here is an example of a pricing strategy, where a wholesale business would retain a 50% profit margin on wholesale orders and a 75% profit margin on direct-to-consumer sales. "MSRP" stands for the manufacturer's suggested retail price.

A profitable pricing strategy for wholesale distributors lets them maintain a profit margin while allowing retailers (the customers) to do the same.

Luckily, there are ways to price your wholesale products to mitigate risk. A popular method is to offer discounts based on purchase order quantities.

MOQs

Many wholesale businesses set minimum order quantities (MOQs) retailers must meet to place an order. From there, you can use marketing tactics to encourage retailers to place larger orders for a better margin upon resale.

MSRPs

Another wholesale pricing strategy to keep income stable is a manufacturer's suggested retail price. MSRPs discourage customers from undercutting each other, which helps you maintain your prices and margins.

An MSRP is often part of a contract agreement between a wholesaler and a retailer. It guarantees the retailer will stick to the suggested retail price—discounts and sale events such as Black Friday notwithstanding.

As a wholesaler, you can set the rules for your retailers. But it's also up to you to ensure retailers can make a profit from selling your product.

Setting payment terms

Another pricing decision you'll need to make as a wholesaler is the payment terms you'll offer customers. Most retailers are unable to pay for stock upfront. Instead, net payment terms allow retailers to pay for items as they make sales.

Consider setting individual payment terms for each company you sell to. Terms could vary depending on order size and your prior relationship with the retailer. Popular terms include:

• None: Customers pay for orders immediately at checkout.
• Net (period): Customers pay for orders by an agreed due date, such as 15, 30, or 90 days.
• Upon fulfillment: Customers pay only when the order is fulfilled or received.

5. Create an online wholesale store with Shopify

Shopify is the simplest way to sell to other businesses online. Its B2B features make it easy to provide tailored shopping experiences for different types of customers, whether they're requesting custom bulk orders or purchasing single items.

Here are some of the features that you can use to create an online wholesale store with Shopify.

Company profiles

Shopify's B2B customer profiles are designed for wholesale. Profiles can represent multiple buyers and locations, keeping all customer information in one place.

Each location profile includes fields for all necessary wholesale data. Manage payment terms, catalogs, tax exemptions, and user permissions directly from the profile.

Catalogs

The catalog includes three features for easy customization of the B2B buying experience:

1. Price lists. Set wholesale pricing using fixed amounts or a percentage off the retail price. You can also specify minimum, maximum, and increment rules for each stock keeping unit (SKU).
2. Customer-specific product publishing. Segment your catalog to show different products to different customers.
3. Volume pricing. Offer additional discounts based on the quantity a customer adds to their cart.

Customer accounts

The customer accounts feature allows you to show B2B customers your wholesale products and pricing, while keeping your existing product pages for B2C consumers.

When a retailer logs into your store, they can manage their orders, view past orders, and save their account information.

Use these features to serve retailers, resellers, and end consumers from your Shopify store.

6. Market and sell your wholesale products

With a profitable wholesale business idea, a pricing strategy, and an online store, the next step is finding potential wholesale customers.

While marketing to end consumers might not be necessary, visibility to retailers is crucial. So, how do you find these retailers and ensure they notice your business?

Use your website

If you run a direct-to-consumer (DTC) website, you may be able to leverage your visibility to find wholesale customers. Retailers and distributors often reach out to popular online stores to establish partnerships—either to stock a product in your store or expand your product distribution.

Harness this organic interest by giving your store an enticing name and brand, then signaling that you're open to a wholesale relationship by making it easy for retailers to contact you. One option is to put a link for wholesale inquiries in your website footer:

Let your customers submit a form on your online store to request a B2B relationship.

Join a wholesale marketplace

Access a large pool of retailers by listing your products on wholesale marketplaces. You can add your store's products to marketplaces to spread your business across sales channels and reach new buyers.

Before choosing a wholesale marketplace, it's important to do your research and understand terms and conditions. Some marketplaces ask for exclusive rights, and every platform charges different fees.

Attend trade shows

Trade shows have long been a trusted avenue for wholesalers to connect with potential customers. No matter your niche, be it baby apparel or home décor, there's likely a trade show tailored to your industry. You can find these events listed in trade show directories.

Setting up a booth at these shows provides a platform to network directly with retailers. However, keep in mind that trade shows can be a significant investment. They often involve planning, travel expenses, and booth fees.

Before diving in, consider attending a trade show as a visitor first. Walk the floor, gauge the potential, and then decide if exhibiting is a worthwhile investment for your business.

Use incentives to motivate buyers

Just like everyday consumers, wholesale buyers respond well to incentives. Many wholesale distributors offer discounts based on the quantity of products purchased. A popular incentive is a percentage off a customer's first order.

Here are some other incentives you could consider:

• Low minimum order requirements. Make it easy for new customers to start buying from you in small quantities.
• Free shipping. Consider offering free shipping based on order amount and delivery location.
• Volume pricing. Encourage larger orders by offering discounts on bulk purchases.
• Various payment methods. Make transactions convenient for customers with various payment method options.
• Bundle deals. Offer discounts on product bundles to increase sales.
• Discount codes. Create time-based or personalized discounts using codes.
• Free samples and testers. Let customers try before they buy.

Another strategy is to offer dropshipping services. As a dropshipping supplier, you deliver your products directly to the end customer when a retailer registers an order. Dropshipping can be an attractive, cost-effective option for your retail customers.

Reach out to complementary brands with Shopify Collective

One added benefit of a wholesale channel is that, unlike direct to consumer, you don't always need a large volume of customers to grow. If you have a handful of high-quality retailers who are successful at selling your product, they can come back and continue to place larger orders again and again.

To find these select partners, contact companies that sell complementary products. You could look for a contact form on their website, find their social media accounts and send a direct message (DM), or use Shopify Collective to connect with like-minded brands.

7. Expand your team

Starting a wholesale business can begin as a solo venture. But as your business expands, so does the need for a diverse team. Each role contributes unique skills, from customer satisfaction to inventory management and financial analysis.

Here are some of the job postings you might create if your wholesale business takes off:

• Customer success managers work with retail customers to drive sales and ensure customer satisfaction.
• Quality assurance supervisors work with suppliers and manufacturers to oversee product quality.
• Logistics coordinators manage a high volume of orders and the timely delivery of goods.
• Inventory analysts monitor and predict complex inventory needs.
• Office administrators or virtual assistants handle daily administrative tasks.
• Growth marketers seek new retail customers and opportunities for your business.

Wholesale items to sell

When it comes to selling wholesale items as a B2B business online, the possibilities are vast. Whether you're a seasoned pro or just starting out, you can broaden your product range with these trending wholesale business niche ideas.

Educational materials

There is a large annual market for education supplies. The United States alone is home to more than 50 million students, who are taught by more than three million teachers.

Here are some education products to consider wholesaling:

• Arts and crafts supplies
• Educational software
• Writing utensils
• Notebooks, folders, and binders
• Computers
• Calculators
• Backpacks
• Textbooks
• Lunchboxes
• Toy, games, and puzzles

Home décor

Home improvement sales globally are expected to reach more than $1 trillion by 2027, making home décor a solid market for wholesale businesses.

Some home décor products to consider wholesaling are:

• Wall art
• Candles
• Pots, vases, and plants
• Wallpaper and paint
• Flooring
• Rugs and runners
• Throw pillows and blankets
• Furniture
• Storage and organization
• Lamps and lighting
• Bedding

Clothing and accessories

From workwear to formal attire, fashion is a large and ever-growing market—expected to reach almost $2 trillion by 2027.

Some popular product types to consider are:

• Baby
• Children
• Women
• Men
• Formal
• Casual
• Activewear
• Business
• Scarves
• Textiles
• Hats
• Jewelry
• Shoes

Food

Food can be both a fundamental necessity and a luxury item, making it a reliable category for wholesale business. Steady demand for food products also ensures a steady market.

Here are some food product ideas that could spark your next wholesale business idea:

• Beverages
• Dairy
• Ice cream
• Oils
• Beef
• Pork
• Poultry
• Seafood
• Frozen
• Fresh produce
• Snacks
• Dessert
• Organic
• Low-carb
• Keto products

Purses and handbags

The global purse market is expected to reach $67 billion by 2032. Here are some types of purses and handbags to consider selling wholesale:

• Totes
• Clutches
• Men's bags
• Kids' bags
• Wristlets
• Casual bags
• Travel bags

Kitchen materials

The kitchenware segment generates more than $17 billion in global revenue, and is expected to grow annually by 3.83% until 2028.

Below are some kitchen products to get your wholesaling business off the ground:

• Utensils
• Pots and pans
• Bowls and plates
• Platters
• Storage and organization
• Cabinets and shelving
• Knives
• Table linens
• Tables
• Chairs
• Appliances
• Glassware

Health and wellness

The health and wellness industry is set to make almost $7 trillion a year by 2025.

Here are some health and wellness products to consider as part of a wholesale business:

• Massagers
• Vitamins and supplements
• Lotions
• Anti-aging creams
• Skin care regimens
• Aromatherapy
• Fitness apparel
• Essential oils
• Candles/incense
• Bath products
• Yoga accessories
• Exercise equipment
• Organic beauty products

Pet supplies

The average dog owner in the US spends more than $1,500 on their pet every year, which suggests the pet industry could be your next profitable wholesale business idea. Here are some wholesale pet items to sell:

• Pet toys
• Pet treats
• Pet food
• Health care
• Cleaning supplies
• Grooming
• Bowls and feeders
• Clothing and accessories
• Leashes, collars, and harnesses
• Crates, cages, and aquariums
• Beds and bedding

Party supplies

The global party supplies market is projected to pass $28 billion by 2031. Wholesaling party supplies not only gives you a variety of products to sell: it gives you volume.

Here are some products to consider in this category:

• Balloons
• Party favors
• Disposable tableware
• Merch
• Themed items
• Banquet equipment
• Backdrops
• Décor
• Centerpieces
• Lighting and candles
• Flowers

Is a wholesale business profitable?

The key to profitability in wholesaling lies in bulk buying at discounted rates. When you purchase large quantities at a lower cost, you position yourself to sell these items to retailers at a higher price, thereby securing a profit margin.

If you currently run a direct-to-consumer business, expanding into business-to-business sales can significantly boost your profits. Here are three compelling reasons to consider becoming a wholesale distributor:

1. Boost sales while spending less on marketing

In a wholesale model, your marketing is focused on finding retailers, not individual customers. This shift can make your marketing budget go further, as the cost per customer acquisition can be significantly lower.

Running a direct-to-consumer brand often means spending big on marketing to grow, with each new customer coming at a cost. As digital marketing consultant Shane Barker points out, "B2B ecommerce generates much higher revenue than B2C ecommerce," suggesting that switching to a wholesale model can make growth marketing less expensive.

By selling your products wholesale, another business takes on the cost of finding customers. This allows you to reinvest your time and money into other areas of your business.

2. Leverage other brands to sell your product

Building a loyal audience of fans and customers is a challenge requiring time and resources. However, forming a wholesale partnership with an established brand can provide a shortcut.

Whether you partner with a marketplace like Faire, a well-known retailer, an established boutique, or a sought-after independent brand, it's possible to run a successful wholesale business without consumers necessarily knowing who you are.

3. Enter new markets with less risk

Expanding your business to a new country or territory involves costs like warehousing and logistics. Plus, you might have to start from scratch, marketing to a population that hasn't heard of you.

Partnering with a retailer that already has a presence and supply chain in a new market can lower the risk of international expansion by reducing your setup costs.

Read more about the pros and cons of wholesale vs. direct-to-consumer ecommerce.

Start selling B2B with Shopify today

For years, ecommerce has helped direct-to-consumer brands launch and grow faster than by selling with a traditional storefront. Now, a new wave of wholesale startups are thriving online—by rethinking the way wholesale works.

An ecommerce wholesale distribution business creates efficiencies to benefit both the retailer and the wholesaler. The retailer gets a new product to sell without investing in research and development. Meanwhile, the wholesaler saves money on marketing and gains access to an existing customer base.