Wholesale can be a very effective way to rapidly grow your small business, but is often daunting for small business owners – here’s the first of my mini blogs on wholesale!
What is wholesale and why should you consider it?
Wholesale is the process of selling your products at a reduced price (typically less than half of your retail price) to another retailer, who will then sell it to their customers.
Selling to retailers at such a reduced price? you may be wondering why you would even consider wholesaling.
Wholesale, when done correctly, can have a major (positive) impact on your business, and you should consider wholesale for the following three reasons:
1. Wholesale orders can dramatically increase the volumes that are going through your small business. Even a small boutique will place much bigger orders than a typical customer. This will allow you over time to get better cost prices from your suppliers which will drive up the overall profitability of your small business and make you more money.
2. It gets your small business name out there and will massively increase your brand awareness. Wholesaling your products will help get your name out in front of a new audience, and will help spread the word. Choosing wholesale partners that are selling to your ideal customer is the perfect way for these customers to find out about your brand.
3. Even though you are selling to retailers at a much lower cost than you could sell to your customers directly, once you sell those products to another retailer, you have completed the sale and do not have to do the actual selling yourself. That’s why people accept the lower price – because it will give them a chunk of income without the work of marketing, managing, and dispatching each individual order.
My six steps to get wholesale ready
1. Check your pricing
You absolutely need to make sure that you can support the lower prices required for wholesale before you can even make a start. Take your retail price and divide it by 2.3. How much money will you be making on each sale? As a small business with smaller margins than ‘big retail’ this is a critical part of the wholesale journey.
Small business owners in the retail industry need to know their ‘legals’. Check that you have completed any legal requirements for your products to go on sale e.g. any testing or labeling that is needed. Not sure? Check this link for UK details.
3. Professional branding
Make sure your labelling, packaging and branding is suitable and professional enough to be sold in a retail business – as a small business owner this really helps to build your USP and retail identity.
4. Online presence
Check your website and social media – the stronger your online presence, the more confidence the retailers will have in working with you. If you don’t have a website, consider creating even a simple one so that retailers can visit it to find out more about your small business online.
5. Your Buyer’s Pack
Put together your approach documents, sometimes known as a buyer’s pack. These should include an approach letter, a simple catalogue with high quality, lifestyle photos, and a pricing list. Absolutely emphasise that you are an independent, small business – market your retail strengths!
Research the shops that you would most love to be stocked in, take the time to understand what exactly it is that you can offer them, and then just do it! Find out how they would prefer to be contacted (many boutiques will tell you on their website) and send them your information. And reach out to your small business community and establish your wholesale pals and stockists.