Are you ready to embark on a wholesale journey? If so, keep in mind that wholesale brings great things, since you get to distribute products at lower prices in large amounts.
5 Tips for eCommerce Stores That Want to Wholesale
But do you really have to go above and beyond to start selling products big time? Even if you are not producing in thousands at the moment, you can still have a go at wholesale. You most likely don’t even need to devise a new target customer.
Take a look at why wholesale is a good choice and see our handpicked tips that should make wholesale easier for you.
Why should you wholesale?
Venturing into wholesale might seem unprofitable at first glance, but opening your online store to wholesale customers brings plenty of extra advantages:
- Boosted brand awareness
- An influx of new customers
- Discovery of new markets
- Additional income on a regular basis
- Easy promotion at low costs and efforts
Now that you’re aware of a few solid reasons why wholesale is something worth trying, let’s move on to the five top tips to help your wholesale journey.
Tip 1: Create a great line sheet
A line sheet is a detailed overview of all the products you have to offer for wholesale together with all the important details a customer needs to know. It has to include the product name and photos, item number, size or color options, materials used, and a unit price.
On top of that, you can also add information such as minimum order volume, recommended retail price (RRP), carriage paid to info (CPT), ordering policies, and so on.
Keep in mind that creating line sheets is often given to graphic designers who can design a line sheet template, add product images, and the necessary product information.
Fortunately, there are various methods to create your own line sheet and it depends on what software solutions you are comfortable working with.
Finally, know that various eCommerce platforms designed for wholesale offer their own line sheet tools. The functionality is often included, and it falls under the standard set of features that users don’t have to pay extra fees for.
Tip 2: Come up with a great pricing strategy
Having a good pricing strategy is one of the essential components to crafting a successful wholesale business. It is common knowledge that businesses that sell directly to customers online get to keep whatever profit margin they set, which is most often more than 50%.
On the other hand, with wholesale, businesses usually give retailers a 50% discount off their regular retail price. This allows retailers to wholesale their products to the customers while still keeping some profit margin.
In order to create a successful wholesale venture, you should be able to offer a large discount off of your price to customers willing to wholesale your product. However, this can be risky at times.
Fortunately, there are methods to price your product for wholesale to mitigate the risk of not being profitable. For instance, you could offer a discount based on purchase order quantities. This way, retailers will be encouraged to make larger orders to get a better margin upon resale of the product.
Many wholesale businesses even set minimum order quantities (MOQs) that retailers have to buy in order to carry their product.
Tip 3: Consider creating a wholesale channel
You should consider whether you want to create a pure wholesale business or offer a wholesale option aside from your primary selling method (selling directly to customers through your own store).
For a start, maybe you should just create a wholesale option besides your usual selling method. This will be easier, and you will get to see how the whole venture will perform.
Here are a few tips to keep in mind once you start creating a wholesale channel for your new venture:
- Create a strong password to protect your wholesale business. If you want to sell through other retailers, create a password-protected online store so that only your retailers can place orders at your price.
- Accepting payments for wholesale orders. Ask for references and perform due diligence before agreeing to terms with your selected retailers. There are ways to offer your own net payment terms to your customers, so learn how you can do that.
- Find the best ways to collect payment from wholesale customers. There are a few options for this (one is to record wholesale orders as draft orders).
- Join a dropship or wholesale marketplace to find wholesale customers.
Tip 4: Make your products stand out
It is through wholesaling that you get your products into other online (or even brick-and-mortar) businesses. This, however, is also a great opportunity for your marketing campaigns besides increasing sales.
Of course, there is no better marketing than having great products that stand out from the rest, so do your best to make your products truly stand out.
Start by setting your products apart by all sorts of means. This could be done with funny product descriptions, spotless images, original packaging, and so on.
The best part about this is that your wholesale customer takes it upon themselves to do all the promotion, orders, and shipping. Therefore, if you have unique branding, be ready for the possibility that the word will spread out quickly.
Also, don’t feel like your wholesale customers are on a double whammy here. Wholesaling brings good marketing to you, but it also brings profits to the retailers.
Tip 5: Tax exemptions
Keep in mind that it is necessary (in some jurisdictions) to exempt your business customers from tax if they come from a different country compared to the country your business is based in.
So, if a customer has a VAT number and is eligible for a tax exemption, you need to capture their VAT numbers in your store and charge them a price excluding VAT. For instance, if your business is located in the European Union, you need to tax-exempt your wholesale customers accordingly.
There are various plugins or even completely independent tools that can do this automatically. A popular one among wholesale businesses can capture customers’ VAT numbers, validate them against the official VIES VAT validation services, and exempt them from tax during the checkout.
The rise of eCommerce we are all witnessing has allowed entrepreneurs to grow quickly. Make sure you also ride this wave and grow your operations even more.
Remember, wholesale is not a fading trend. A new wave of wholesale businesses is actually mushrooming in the era of online shopping by reshaping the whole wholesale concept. So, be among the pioneers and you will reap great rewards.