WHOLESALE MANAGEMENT   |   8 minute read

Wholesaling on your own terms: Private vs public B2B marketplaces

Hello, it’s lovely to see you again. Last week we busted some common wholesaling myths to help you consider B2B as another sales channel to add to your business. Today, I’m going to introduce you to the first few steps into the wholesaling world.

What’s the right way to get started? Do you list your products on your website and wait for retailers to contact you? Or do you call/email/visit every retailer in the city?

Or, do you apply to sell on B2B marketplaces? There’s a growing trend in B2C eCommerce sites like Etsy and Amazon opening wholesale initiatives to go after a slice of the B2B market which is estimated to be worth $6.7 trillion by 2020. That’s worth about twice as much as the B2C market ($3.2 trillion by 2020)!

Interested in B2B marketplaces?

The good news is getting on a wholesale marketplace can be an amazing opportunity to grow your business. If you’re used to the B2C marketplaces of some of these websites, it’ll be easy to work with the interface on the B2B front since they’re often identical.

In the realm of B2B marketplaces, there are three big players: Amazon Business, Alibaba and Etsy Wholesale.

  • Amazon Business - for the manufacturer

As the name suggests, Amazon Business involves selling to businesses of all kinds. Stuff on offer includes highly specialized IT hardware, industrial and construction equipment, along with more general supplies like food service and janitorial supplies - five gallon tubs of floor cleaning solution and metal cutting tools, anyone?

Of course, with most of the products on sale catering to the more industrial level side of things… it may not be the perfect marketplace for consumer goods, and there’s a chance you’ll be unable to get your products to your target market. After all, Amazon Business started as Amazon Supply - a marketplace that aimed to provide office supplies for large corporations instead of retail shops.

  • Alibaba - for the distributor

The wholesale behemoth from China - and the product source for thousands of retailers - this marketplace offers anything under the sun, from branded apparel and accessories to motorcycles. Alibaba enjoyed 12.7 billion annual orders last year - and I’ll bet that number will only grow this year. If you’re looking to sell on the world’s largest wholesale marketplace, Alibaba’s your channel!

They offer “Free” memberships, but these give your products the lowest priority when it comes to display. So to have a fair shot at success, you’ll need their showcase function which requires a paid membership. On top of that, you’ll be going toe-to-toe with Chinese suppliers who  can offer breakneck prices on their products due to massive economies of scale. If camping equipment is your business, it’ll be hard to compete with Chinese manufacturers based on price alone. In fact, google Alibaba and most results won’t you how to sell on Alibaba - instead, they focus more on how to profit off Alibaba’s rock-bottom prices.

  • Etsy Wholesale - for the designer

Independent designers, rejoice! Etsy Wholesale was designed just for you. If you dream of seeing your handmade products carried by retailers all over, Etsy Wholesale offers you that option. By signing up, you’ll be able to get your designs in front of the buyers of Etsy Wholesale. And you’ll have a vetted pool of retailers who are eagerly searching for new products to stock, which means you’re less likely to get ripped off by an unscrupulous buyer who’s just looking for an opportunity to trick some wholesale newbie into a compromising position.

The catch? There’s a $100 joining fee on top of the 3.5% transaction fee for sellers, and selling craft supplies wholesale isn’t allowed. Plus, success rates on Etsy Wholesale seems to vary greatly, and the site has yet to publish statistics on how Etsy Wholesale is doing. In addition, while Etsy Wholesale promises sellers the chance to reach out to department stores, museum shops, independent retailers, and so on, there’s no actual breakdown of buyers for each of these - so if you’re selling products targeted to a specific audience, it can feel a lot like you’re shooting in the dark.

If B2B marketplaces aren’t your thing… here’s another wayMaking choices

What's your path?

Maybe neither Alibaba, Amazon Business, nor Etsy Wholesale sound like they’re right for you, or maybe you want to take things a little slower and dip your toes in a little bit at a time, instead of jumping headfirst into wholesaling.

After all, given that your products are so sought after that you’re operating on a whole range of B2C sales channels, we totally understand your worries about how potentially overwhelming a sudden surge in orders can be, possibly resulting in backorders. So instead of putting yourself in front of the whole world and risk getting bombarded with requests, why not start wholesaling on your own terms?

 Sure, wholesaling on your own terms may mean you’ll have to approach retailers instead of having them approach you - but you won’t have to pussyfoot around and play by anyone’s rules but your own. The appeal of striking out alone lies in:

  1. It’s all about you

    Your store will be all yours, with your branding all over it. For example, if you’re selling on Etsy Wholesale or Amazon Business, it’ll look like you’re selling under their brand umbrella - and your customers will see Etsy or Amazon before they see your brand.

    But if you’re going private, you’ll be able to deck out your B2B portal just like how you’ve set up your eCommerce retail store. You’ll be able to maintain the strength of your brand, ensuring that everything remains constant across all channels with your branding all over it - from invoices to the checkout page.

  2. By invitation only

    Going private means by invitation only. So you’re the one who gets to decide who you want to wholesale to, hence allowing you to enjoy a gradual exposure instead of jumping in headfirst. When you find would-be retailers whose visions align with yours, you can invite them to join your portal for a personalized shopping experience.

    When it comes to personalization, you’ll be able to customize what each of your would-be retailers can see when they visit your B2B eCommerce store. Is there a retailer you’ve got a great relationship with? You can choose to offer them better prices or lower minimum orders than your stipulated market rates.

    After all, since this is your private eCommerce portal - who’s to stop you from rewarding customers who deserve it?

  3. No competitors

    An Etsy Wholesale vendor observed that when she joined, the art and photography category had 699 vendors. And within a month, the number of vendors had increased to 756… And it’s still increasing. That’s a lot of competitors going after the same pool of buyers.

    In fact, the #1 reason vendors (including billion-dollar companies) choose to strike out alone instead of going the marketplace route is the lack of competitors. This means you won’t have to sit at the same side of the table as your competitors, force yourself to adjust your prices to match the market, or risk losing your own customers to competitors when you direct your existing customers to your store on the marketplace to place their order.

    You can charge the wholesale rates you believe your products deserve, without having to worry about whether you’ll lose customers who feel you’re overcharging for your products.

  4. Transparency

    You’ll know how many views your catalog is getting instead of relying on the marketplace to supply you with the statistics. If you’re wondering about what your bestselling items are when it comes to B2B, filtering intelligence reports by channel and product will tell you everything you need to know.

    There’s also the question of how products are sorted in a marketplace - is the directory order fair? Does every vendor enjoy equal exposure, or are some given privileges due to filters like alphabetical orders or the lowest price? Again, if you’re selling on your private B2B portal, you won’t have to face issues like this.

Ready to strike out on your own?

Going privateChannel your inner cowboy!

If that sounds like good news to you, I’d like to tell you about how you can give every one of your customers a personalized shopping experience.

If you’ve already got a TradeGecko account with us, try out our B2B eCommerce platform. We’ll give you the platform to make all the above happen: from having your own branding all over your B2B eCommerce store to enjoying in-depth intelligence reports for better business decisions.

To get it to your customers, all you have to do is send them a link, and leave them to do their shopping. And since it’s connected to your TradeGecko account, all movement in your inventory levels will be reflected across every channel - which means you won’t need to keep a separate spreadsheet to manage the wholesale side of things. Instead, you’ll be able to manage all your sales channels from one dashboard - from Shopify, to Amazon, to selling B2B.

If you don’t have a TradeGecko account yet, sign up for a free trial. The B2B eCommerce platform is free for you to experiment with, even during the trial period.

I hope this post helps you evaluate the best option for you to choose when embarking on your B2B journey.   Next week, I’ll be back with  tips on screening potential retailers to wholesale too.



See also:

Which Sales Channel is Most Profitable for your Brand?

McIver's guide to maximizing profit in a wholesale business

3 key strategies behind Uniqlo’s billions in revenue