5 Steps To Get Started With Wholesale
Steps to get started with wholesale
Wholesale can be a great way to scale your business, it will take a lot of work to get started but once it’s set up it doesn’t take much longer to send a wholesale order than it does to get, pack and ship a retail order.
What is wholesale?
Wholesale essentially means to sell a large volume at a lower price often to another business who will be selling your products onto their customer. Most business owners I speak to who are not used to wholesale are shocked to learn that the prices you need to offer your wholesale customers are so low and it can be tricky to make it work. However, once you get started your volumes will increase, your turnover will go up and the prices you can buy in your materials for will start to decrease and therefore your margin will start to go up again.
Is it right for my business?
Wholesaling your products can help you market and grow your brand and save you time as you don’t have to sell each individual product repeatedly. Once you sold a product to a wholesale customer, they will continue to re-order it over and over again as long as it’s selling well for them and therefore in the long run it will save you time.
Clients often ask me if they are ready to wholesale? Unfortunately, I don’t think there’s an easy answer to this. Theoretically, you’re ready if you can produce enough products at a consistent quality in a reasonable time-frame and at a reasonable cost. This doesn’t mean that you must be the cheapest or compete with companies mass-producing products in the Far East, but you do need to know your numbers and be realistic with your time.
5 steps to get started
1. Get clear on your pricing
This is super important as it is what will allow you to scale your business. This will include all the costs associated with running your business, including your time.
To get your wholesale prices you divide your recommended retail price by 2.3-2. Meaning that if you retail your product at £10 a shop will expect to pay between £4-4.35 depending on what pricing module they use.
2. Retail ready
Make sure your products meet all legal requirements and that your packaging includes all the relevant warning labels and instructions.
Consider the retail packaging, ie. The packaging the product will be sold in, if you sell greeting cards, will you go naked or will your card and envelope be packaged in a celobag? If you make jewellery, are they packed in gift boxes? Look at your competitors for inspiration and consider how your products will be displayed in the stores.
3. Create all your sales materials
This might include a product catalogue or a line-sheet which is a no-frills version of a catalogue or if you have a more high-end brand you might choose to create a look book with a separate price list. Make sure that you include your terms and conditions and how to order.
Good photography is key when you create your sales material, make it easy to read and make sure to get your brand values and any key selling features across.
4. Start small and local
Unless you are going for big sales right away start by contacting local and independent stores to gain experience. As a rule of thumb, larger retailer equals more rules and regulations and more negotiations on the price.
There’s nothing wrong with starting small and local, independent stores are more likely to want to champion smaller brands and the buyers are often based at the stores so they are much easier get in touch with. They also tend to stay in the same business for a long time so you can really get to know them and build a relationship, whereas large retail buyers tend to move around a lot.
5. Research who you’re contacting
When you start approaching potential stockist, make sure you research who they are, what brands they stock and what their values are. This will make your approach much more targeted and personal and therefore you will have a higher chance of getting a response.
Have a look at their social media, their website and if you can, visit their store before approaching them. Let them know how your brand fits in with what they do and how stocking your products would benefit their business.
Wholesale can help you grow your business in a sustainable way…
… it doesn’t have to mean that you want to be stocked in every store on the high street, target retailers with similar values to you and free up some time for you to continue to invest in your brand and creativity.
If you are feeling a bit overwhelmed by the thought of starting to wholesale and need help and support then please get in touch, you can read more about the services I offer on my website Small Business Collaborative or drop me an email on firstname.lastname@example.org to book a free 30 minute discovery call to see if you might want to work with me.