Things are looking up for your retail business, and customers are buzzing about your products. As you see sales increase, you decide to buckle down and get lucrative: it’s time to become a wholesaler!
This is always an exciting step for vendors - transforming your business from the world of retail to the somewhat familiar, but also very different world of wholesale. Finding and building your base network of stores that retail your product is essential to your success as a wholesaler, so the real question becomes: where should you start in your search to find retailers for your products?
Taking the first step
If you have any experience in retail, you will have an idea of the process for buying new products. If not, here’s an idea of what the retailers you’re selling to will need and how you can find and reach out to them:
Work out your pricing
Figure out your best price point and create a price list. Be sure to include both how much you intend to sell the product, minimum ordering quantity, and the wholesale price of your item for the store. Be modest with your prices, but not too modest. You want to make a profit, but you are creating a partnership with this store and they need to make a profit as well.
Build your network
A great first step for retailers who want to transition into wholesale is to take a step back and consider your network. Do you often partner up with other retailers at events? Have you worked with local shops in the past? Do you have friends that have dabbled in wholesale?
All of these connections you’ve made over the lifetime of your business will help you tremendously when you’re first getting started. Personal recommendations mean a lot when it comes to first purchases from a wholesaler, so put your feelers out there and see where your friends, colleagues, or acquaintances have sold their items. Ask them about the shop, the shop’s typical clientele, and the owner’s personality and expectations.
All of these questions will give you a better idea if the retailer they are recommending will work for you as well.
Ask yourself the important questions
Consider your audience, and consider where they shop. Do you have connections within that business industry? If so, you can use those connections to reach out and provide recommendations on your product.
If you’re new to the industry, check out trade shows and publications, and consider who your competitors are. Where do they sell their product? Don’t be afraid to think outside of the box when it comes to places to sell. Even if your items are within a niche market, there are most likely a handful of stores outside of that niche that are willing to work with you.
Coordinate with the middleman
The oft-forgotten key component to commerce is the company that will be shipping and handling your product. If you’re only dealing with local retailers, you might not need to consider this step. However, if you’re shipping long distances, you’re going to need to look into potential companies that will help ship your items at a reasonable price and with care. Some stores that you partner with will be able to front the cost of the shipping, but don’t count on it. Look for deals for bulk wholesale shipping, and consider how you will make up for the added expense.
Cultivate a relationship
Once you have your product and intended price figured out, you will want to start developing relationships with your target stores. Call them! It’s free to do, and often times hearing your voice creates a connection and leaves an impression that will stay with the store owner. Ask them if they have the space and need for your product, and if they want to get together to try out samples and discuss options.
Be sure to not overschedule yourself as you start out, but give the store owner plenty of time to ask questions, request additional information, and cultivate a working relationship. If the store is out of your area, set up a face to face meeting with Skype or Facetime.
Start out modest
On a final note, as you get prepared to venture into the world of wholesale, keep one piece of advice in mind. Often times rapidly growing businesses get over burdened with their new-found demand and supply chain. Be sure to take it easy as you start to grow your business into wholesale.
The Small Business Centre with Intuit has compiled a list of the five biggest dangers for fast-growing retailers and businesses: order-fulfillment costs, outstanding-debt (what customers or suppliers owe you), customer-service costs, customer-acquisition costs, and regulatory and tax costs. All of these threats might arise as you begin to build your B2B network, so it’s best to be prepared for the worst.
Allow yourself the space to grow at your own rate, and don’t get over ambitious in your search for more retailers. Make sure you can deal with the load you are handed, and utilize services that can help you streamline your orders, stay in contact with your stores, and keep your schedule organized.
And if you're looking at wholesaling online, you could always try out something like TradeGecko's B2B eCommerce platform: helping to keep you ahead of the game and on track to being a successful and profitable wholesaler.