How To Sell Wholesale To Retailers: The Ultimate Guide
Selling your products directly to customers can be a lucrative business model. But some businesses have trouble with marketing and all the work it takes to find and keep customers.
If you find yourself in this boat, you might want to consider selling wholesale to retailers.
By selling wholesale, you won’t need to worry about managing a huge number of individual consumers. You’ll be able to sell more products at once to a smaller number of customers.
Unsure of how to sell wholesale products? No worries. That’s just what we’re here for.
In this wholesale guide, we’re going to:
- Describe what it means to sell wholesale
- Discuss the differences and benefits of selling wholesale vs. retail
- Explain how to set up your wholesale channel
- Go over some tips to keep in mind when you start selling wholesale
Let’s do this.
- What Is Selling Wholesale?
- Selling Wholesale vs. Retail
- How To Start Selling Wholesale: Setting up Your Wholesale Channel
- How To Start Selling Wholesale
- Start Wholesaling Your Way To Success
What Is Selling Wholesale?
Selling wholesale products means that you’re selling your products to retailers instead of directly to individual consumers. Typically, you’re selling in bulk at a reduced price.
You might be familiar with the terms B2B (business-to-business) and B2C (business-to-consumer). When you’re a retailer, you’re a B2C business because you’re selling to individual consumers. When you’re a wholesaler, you’re engaging in B2B ecommerce because you’re selling to retail businesses.
Selling Wholesale vs. Retail
In addition to who your end buyer is, there are some key details to consider when you’re sizing up selling wholesale vs. retail.
Let’s look at a few of the biggest benefits of selling wholesale products.
1. More Revenue From Fewer Transactions
When you’re selling your products in bulk to retailers, you have the opportunity to move a lot more of your product – and get a lot more revenue – in a much smaller number of purchase transactions.
The drawback is that when you’re selling wholesale products in bulk, retailers will typically expect a discount. But this can even out depending on how many products you sell.
Let’s do some math.
Say that you’re selling candles to individual customers for $5 each. To make $1,000 in revenue, you’d need to sell a candle to 200 customers.
But if you sold a large number to a retailer, you could easily make $1,000 in revenue in a single transaction depending on how many they wanted to buy and how much discount you give them.
2. Less Expenses for Marketing and Customer Acquisition
According to Deloitte, consumer packaged goods companies spend almost a quarter of their budget on marketing.
That’s significantly higher compared to other industries – especially when you skim down the chart to find that retail wholesale companies spend only ten percent of their budget on marketing.
By learning how to sell wholesale to retailers, you’re able to save a huge portion of your budget that might currently be going to your marketing efforts.
Let’s go back to candle math.
Say you’re selling wholesale at a discount of $3 per candle instead of $5. You’re making less money per item, but you’re spending much less of your budget (and your time!) on marketing to get and keep customers.
For some businesses, this simple tradeoff can make a huge difference in your quality of operations, your profit margins, and the overall value you’re getting from running the business.
3. More Awareness for Your Brand
If you act as a retailer, you need to work harder to build your brand awareness. That’s because it all relies on you: You’re your own marketing channel.
But once you learn how to sell your product wholesale, you’ll be able to distribute your products through more brick-and-mortar and online stores. You’ll get more physical and virtual “shelf space,” and your products will be more visible to more people.
This ties into marketing and customer acquisition budgets again, too. By distributing your products through multiple retailers, you’re able to build more brand awareness while spending fewer marketing dollars.
This is an especially helpful strategy when your products are sold by big companies with diverse audiences and a lot of exposure.
How To Start Selling Wholesale: Setting up Your Wholesale Channel
Ready to learn how to sell your product wholesale?
We’re going to look at two main ways you can go about it: setting up a wholesale storefront on Shopify and using a wholesale app to make a separate channel from your retail brand.
Both of these options are ideal for entrepreneurs who are new to selling wholesale products as well as retailers who currently sell directly to consumers but want to try out wholesale without changing their business model completely.
How To Set up a Wholesale Store on Shopify
The simplest option is to set up a new Shopify store with a different URL where you can direct wholesale buyers.
If your website is candycandles.com, you can keep it simple with something like wholesale.candycandles.com or candycandleswholesale.com.
If you already have a high order volume secured, another option is to upgrade your existing account to Shopify Plus. Plus has a wholesale channel feature that lets you create a separate password-protected channel within your existing account.
Here’s an example from men’s grooming product store Beard & Blade.
The wholesale feature has some great perks:
- It creates a wholesale storefront with the products you already have, meaning minimal extra setup on your end.
- You can customize the wholesale store’s pricing by customer groups, letting you apply volume-based or percentage discounts.
- Your consumer and wholesale sales are separated into different reports so you can clearly see how each channel is performing.
How To Make a Wholesale Channel Using a Shopify App
Head over to the Shopify App Store and you’ll find loads of cool apps that can help you put wholesale functionality onto your store.
Wholesale Club is a good one.
It lets you break your customers up into groups that get their own discounts on retail items in your store. It also has a marketing feature that helps entice customers to place bigger orders by offering higher discounts.
Plus, Wholesale Club adds an element of security by making sure that visitors don’t have access to wholesale pricing unless they’re logged into an approved retailer account.
How To Start Selling Wholesale
Now that you have the basics of how to sell wholesale products online, let’s look at some tips to help you get started.
1. Sell on a Wholesale Marketplace
Many retailers search and order wholesale products from marketplaces, and that presents a huge pool of buyers for your inventory.
They are drawn to marketplaces because of the range of products and the convenience of comparing prices within a single source.
There are lots of wholesale marketplaces out there, but you want to sign up with one that plays nicely with your existing sales channel.
For example, Handshake is a wholesale marketplace that invites US-based wholesalers with an active Shopify store to apply to sell through its platform.
If accepted, wholesalers can sell in one of the categories present on Handshake.
Handshake also provides wholesalers the flexibility to choose who to sell their products to. If you apply and get accepted, you can choose to cancel the orders from retailers you feel aren’t a good fit for your brand.
2. Capitalize on Seasonal Demand
Think about a time when the products you want to sell may be limited in supply or unavailable from other wholesalers.
Does your manufacturing or sourcing strategy allow you to accumulate a large volume of those items beforehand? Does it allow the products to be back-ordered?
If you can store enough inventory of the items that sell like crazy during certain seasons, you might be able to sell a ton of wholesale volume.
Ideally, you want to stock up before:
- Easter (March–April)
Products to sell during this seasonal window include plastic eggs, candy, and stuffed animals.
- Back-to-school season (July–September)
When it comes to school supplies, the most in-demand items are clothing and accessories, followed by personal items and gadgets.
- Winter holidays (November–December)
Electronics, toys, and home appliances used to account for the bulk of winter holiday sales, but recent years have seen a rise in the demand for sporting goods, suitcases, and shoes.
3. Offer a One-Time Special
When retailers search for products online and come to your website, you can incentivize them with a one-time special like free shipping or a discount.
Another idea is to offer special savings to retailers who regularly give you their business. You can do this by offering them an even better deal on an already discounted item.
Nothing invokes a sense of urgency like realizing you missed out on a discount – that is unless there is an even bigger discount being dangled in front of you.
If a retailer was on the fence about buying from you again, the extra savings might just push them over the edge.
4. Experiment With Tiered-Pricing
The idea is to encourage retailers to place larger orders.
It’s probably wise to get started with simple pricing tiers and see how your audience responds to this new way of distribution. For instance:
- If they buy 150 units, they pay $10 per unit.
- If they buy 300 units, they pay $9 per unit.
- If they buy 500 units, they pay $8 per unit.
Some wholesalers take it a step further, offering “no minimum order” on the first purchase to encourage purchases. However, this strategy should be executed with caution and for a limited period.
Why? Because if you always let retailers place small orders at a discounted price, it can have a detrimental impact on your ability to stay afloat during tough times.
5. Attend a Tradeshow
Tradeshows are great for making connections and identifying potential retail partners for your business.
You’ll find specialty trade shows for nearly every retail category from men’s clothing to athleisure to pet products to office supplies.
Sites like Trade Show News Network (TSNN) can help you find relevant exhibitions to attend.
Additionally, there are hundreds of smaller meetups where your prospective customers might be present.
However, this approach to selling wholesale products can be expensive. You will often have to travel to a show’s location and cover the expense of a booth if you want to exhibit there.
One way to keep costs low is to visit the trade show as an attendee to determine the event’s value before deciding whether to exhibit there or go elsewhere.
6. Publish High-Quality Images and Descriptions
Think retailers don’t pay much attention to their product images and descriptions?
Well, think again. Potential buyers want a clear idea of the item they’re purchasing, especially when they’re going to order in bulk.
You want to make a good first impression, so make sure your items look good in the images on your product page. This requires good lighting (natural lighting can work well for most products) and a simple background to ensure the retailers can see your product clearly.
When it comes to product descriptions, one of the best ways to engage the audience is to include a story. The technical specifications, like country of origin and materials used, can come later.
Use the first few lines to write a narrative about how your product will make people’s lives better, interesting, and more fun.
Here is an example for inspiration:
Engaging, isn’t it?
The next time you write a product description, think about how you can use an anecdote or two to add in some personality.
Start Wholesaling Your Way To Success
Contrary to popular belief, wholesale isn’t dead.
Rather, the wholesale industry has evolved from the days of cold-calling brick-and-mortar purchase managers to marketing products online.
But the overarching challenge has remained the same. How do you get store owners to buy your items?
Hopefully, the strategies above will help you sell more and consistently.
And take note that initial trial and error is required to figure out your best methods. You will need to be patient as you implement different strategies and compare their results.
Keep going, and eventually, you will become a master of selling wholesale to retailers.