Wholesale can be a very effective way to rapidly grow your product business, but it needs to be thought through and planned. First up I want to share with you three reasons why you should consider wholesale, the steps to get started and five top tips to make it a success.
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 on 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 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 business and make you more money.
2. It gets your 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 that 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.
Getting started with wholesale
Many people end up dabbling in wholesale because they are approached by a boutique or local business about stocking their products. However, it’s worth thinking about your wholesale strategy before you get approached, so that when you do, you are ready to go.
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?
2. 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. Make sure your labelling, packaging and branding is suitable and professional enough to be sold in a retail business.
4. 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 you online.
5. 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.
6. 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.
Wholesale can be a very profitable part of your business when done right, but it needs careful management to make it work. Once you’ve gone through the above process to decide if wholesale is for you and your product business – these are my top tips for a smooth process.
1. Planning is key, give yourself enough time to get everything in place. Don’t try and rush it – even if it means taking a year to get all the elements in wholesale ready.
2. Always under promise and over deliver. That means, if you think you can get the stock to a retailer in 4 weeks, tell them it will be 6 weeks so you never have to let them down by delivering late.
3. Do your research – no “dear sir or madam” when you are reaching out to the shops you want to stock you. Find out the name of the person who runs the business – you can search their social media accounts or the about page of their website. Using someone’s name makes a huge difference in most aspects of life!
4. Know what makes your brand special and practise how to communicate that. Shops are looking for what is new and exciting, and above all, what will make their customers buy. Make sure you are really clear about your own unique selling proposition (USP) so that the retailers you approach will understand what you are offering them.
5. Can’t make your pricing work at wholesale? Resist the temptation to increase your prices for wholesale just to make the maths work. Instead, see where you can cut cost out of your product without affecting what makes it unique and special. For example, can you negotiate better prices from your suppliers, or source cheaper packaging?
Wholesale going well?
If you’ve got a good few months of wholesaling under your belt and it’s proving successful for you and your business it’s time to consider if trade shows are your next step. Trade shows are an important part of how the retail business works and that includes small product businesses.
What is a trade show?
A trade show is an event where individual brands can display their products to other retailers, or, “the trade”.
They are not open to the general public, you have to register to visit and there are generally not any products for sale that can be taken home on the day.
Usually they are themed so that brands in a similar part of the industry will be all together. For example, Natural Organic Products Exhibition groups together people working in the natural food and products industry. Another example is Top Drawer, may have several different themed areas such as stationery, gift and home.
The purpose of the trade show is to bring brands together so that retailers can easily visit many different businesses in a very short space of time. Often they are free to attend for visitors, and the trade show may also offer a program of talks or workshops for attendees as an added bonus.
Why should you exhibit at a trade show?
There are three main reasons that you would want to exhibit at a trade show.
1. Growing your wholesale business
This is the main purpose for you to go to a trade show – to ramp up your wholesale business.
Trade shows are expensive so you need to be securing some decent orders as a result of the show in order to cover your costs. You’ll get the opportunity to pitch your brand multiple times and although you can’t be pushy, always keep in mind that sales are your biggest priority.
It’s great to meet people, see other brands in your niche and get your brand out there, but ultimately, trade shows are all about making money.
2. Brand profile
Being part of a high profile trade show can increase your brand awareness, not just with retailers but also with any customers who follow the show’s social media as well as press who will be visiting the show to see what’s new and exciting.
Attending a trade show sends a signal that you are a serious business and one to watch. You’ll get listed on the website of the show and your details will be in the show booklet that is given out, so you can guarantee that hundreds, if not thousands of people in your target market are going to see your name.
3. Access to hard-to-reach decision makers
Getting in front of a big retailer’s decision maker is not easy to do – you have to make it through to the complicated layers of the organisation to talk to them, and secure an appointment before you can even present your ideas.
At a trade show, the buyer from a big retailer could definitely walk past your stall – be warned though, they are most likely not going to make it obvious who they are, so another reason to be friendly and enthusiastic to absolutely everyone you meet!
For many brands, being at a trade show is the best way to be seen by their ideal retailer.
Sounds great, sign me up!
Although there are very good reasons to attend a trade show, there are some equally valid reasons why you shouldn’t.
If you are just starting out, have not figured out how to produce your goods to very high quality standards on a consistent basis, are not clear with your marketing and are not set up to produce your products in volume, you are not ready to attend a trade show.
They are very expensive – and despite what their sales people will tell you (and they are VERY persuasive!) not everyone will make their money back. Also – never sign up for a trade show unless you have attended it as a visitor first. This can be awkward to do because many of them are only held on an annual basis, but it is far better to wait a year to attend the right show than to pay to be at a show, that in hindsight, wasn’t the right fit for you and your brand.
Find out more
If you enjoyed this post, why not get my ‘Introduction to Wholesale’ course?
It’s a series of videos designed to give you more detail about wholesale.
Getting your hands on the ‘Introduction to Wholesale’ course is easy, and you’ll get so much more too!
It’s all part of my “Grow Your Business” FREE toolkit – a collection of resources designed to help you take your business to the next level. The toolkit contains:
Workshop replay – Grow Your Online Sales – my guide to how you can sell more online
E-book – Driving traffic to your website – a rundown of all the ways you can push your sales
Workshop replay – The Launch Lowdown with Elizabeth Stiles
Introduction to wholesale – my mini-course with Therese Oertenblad
Ready to get the toolkit? Just put your email below to receive the link.
For more information about all three toolkits, click here.