How to start selling wholesale
Wholesale is the process of selling products in bulk to either another retailer at a lower price or directly to the end customer. Wholesale is not limited to selling B2B as many people think. Brick and mortar is a wholesale method which means you sell your products to a third party who then sells them on your behalf like a department store.
You don't need a large initial investment to start selling wholesale. Utilize the space you already have to store products before spending money on storage, also do not forget to negotiate with suppliers as they are more likely to give you a better deal if you are buying a large amount.
Can you sell wholesale directly to customers?
Yes! Ecommerce has grown dramatically over the past few years as online shopping sites have changed the way wholesale worked for example Amazon, Wish, and Etsy. These methods allow customers to shop all their needs in one place and allow wholesalers to sell directly to the customer as well as retailers. Selling wholesale is pretty easy to start with, logistics and distribution can be slightly difficult if you are new to it but the platforms mentioned above can make this easier.
How to price wholesale products?
When starting to sell wholesale products it's important to create a healthy pricing strategy. Usually, wholesalers sell their products to retailers at a 50% discount on the RRP but double the price they paid at cost price so all parties are receiving an equal profit margin. For example, if a wholesaler purchased products for £20 each they would sell it to the retailer for £40 and then £80 to the final customer.
To reduce the risk of making little profit you can use pricing strategies, for example:
-Price depending on quantity
Pricing the product depending on the quantity (the more you buy the less the price per unit),this will encourage customers to buy more.
-Set a minimum order quantity
Another way to ensure you aren't losing out on profits is to set a minimum order quantity (MOQ) to stop small orders.
What is MSPR?
You get to set the rules that retailers have to comply with so some wholesalers set a Manufacturer's Suggested Retail Price (MSRP) so when selling to multiple retailers they can all be recommended to sell it at the same price to discourage them undercutting each other.
When including an MSRP in the contract with your retailer it's important to mention that discounts around certain dates and holidays would be beneficial. When creating the contract it's important to ensure it benefits the retailer as you want them to sell large amounts of your products, so they become a regular customer and continue to buy off you. If they aren't selling many or any of your products then they won't buy it again.
How to sell wholesale products online?
Shopify has become one of the most popular ways to build an online wholesale storefront from scratch or you can add wholesale functionality to your existing store. There are many different subscriptions you can choose from depending on your needs, there are options for beginners and for experts.
How to market wholesale products?
There are many ways you can market your business and attract customers. One popular method is registering to a wholesale market, for example, Handshake which allows you to sell to the right audience. A lot of modern retailers find and order their products through this.
Other ways to sell your products are attending trade shows, partnering with complementary brands. Including excellent product descriptions and high-quality images, and offering incentives to encourage people to buy (low MOQ, free delivery, a wide range of payment methods, and offer free samples/testers).
If you are struggling to decide what products to sell wholesale, you can check out our other blog ‘trending wholesale products of 2021’.