Move over retail - wholesale is starting to get serious about eCommerce too. It's becoming a really great option for wholesalers: making it easy to connect directly with customers, bridging the distance between locations, and simplifying the ordering process. With wholesale becoming easier and more accessible, the question becomes: is your business ready to join in?
Expanding into wholesale has several major advantages. Wholesale can bring a large, quick increase in revenue. It means taking many logistics like warehousing, shipping and production into your own hands. Wholesale also helps expand your brand reach: each new retailer who picks up your product carries your brand to their customers. Overall, it sounds good, right? But moving into wholesale can be tricky - here are 8 questions to ask yourself about your business before making the move.
What are you selling anyway?
Some TradeGecko customers decided to take a step into wholesale after noticing that certain products were doing especially well. Their strategy was to focus on those few products first, selling them wholesale and then moving into the space gradually. This can be a good way to test the level of demand.
Choose your best-selling products and take a real look at them. Decide if production of those items can be scaled - if your current production methods could handle a large increase in demand. Try to determine if your products are unique enough to be wanted in the market and what advantages you have over other wholesale businesses selling similar products. Think about your business from your current retail perspective - what are the main reasons a business will choose to retail your product?
Products sorted, what’s your pricing strategy?
Wholesale pricing is very different from retail pricing - with a whole different set of parameters to keep in mind. Take another look at all your costs like labor, materials, overhead, employee salaries and inventory costs, then establish your wholesale prices. Be ready to cut your retail price, but in exchange for what you want - wholesale profits! Furthermore, what are your minimum order requirements - the minimum amount retailers need to order to make your wholesale business thrive? Will you set up a wholesale/bulk pricing method with different prices for larger orders?
What’s your target market and where do you see your products?
When you close your eyes and see your products on a shelf, where is that shelf - in a big retail store, a small, independent boutique shop, or both? When targeting a place, be sure to do a little research first, looking at which products they already carry and what they're all about. You know who your target customer is - take the time to research retailers with a similar audience.
What about your sales strategy?
New B2B eCommerce portals are beginning to make it easier to sell wholesale with fewer personnel needs. Decide if you will hire wholesale sales reps to further expand your business or if you will handle most of the marketing and sales yourself in the beginning. Do you have a social media presence? A lot of sales can come from being engaged on social media, depending on your market.
Are you ready for trade shows, conferences, cold calling and pitching your business again and again?
Getting a store to carry your products can take a lot of selling - and persistence. Ultimately, retailers will decide to carry your product based on one thing - whether or not they like your product - but it's up to you to get your products in front of them in the first place. Cold calling and e-mailing might be a way to get started, especially if you don't have a lot of cash in the beginning. If you go the trade show route, start with one trade show that is particularly suitable for your product - make sure it's the right fit before you go, and that it will put your products in front of the right people.
What sort of relationships do you have with your current customers?
Get ready to get up close and personal with your future customers. Wholesale relationships are usually long-term and a few, quality relationships can make up the bulk of your business in the beginning. Also in wholesale, referrals from existing customers are gold. Check out what your relationships are like with your current customers. Do you already have a solid brand following and good relationships?
What are your current shipping and warehousing practices and how can they adapt?
Of course, you won't be set up for wholesale volumes yet, but what are your current shipping and storage methods? Will you have to make big changes, or are they adaptable?
Have you got a good catalogue, detailed product descriptions and an easy ordering system?
When you pitch to prospective customers, what will you show them? Look at your product catalogue and make sure your products are represented in a way that shows them in their best light. And when someone does decide to buy, make it easy for them with a clear, simple ordering system.
Once it’s all up and running - how will you measure success?
Metrics for wholesalers can be different for retail. Make sure you have realistic goals for the wholesale side of the business - particularly when it comes to revenue.
Ready to make the jump? Check out TradeGecko’s new B2B eCommerce Platform - a fully customizable, seamless B2B eCommerce platform that empowers you to sell more to your customers. Check it out and Happy Wholesaling!