How to Start Selling Wholesale
Selling wholesale has gained popularity recently in all manner of fields: fashion, beauty, cosmetics, interior & design, machinery, technology, grocery, and the list goes on. But especially in the world of apparel, as trends come and go, there is high demand for it.
What is Wholesale?
Wholesale, also known as B2B selling, is when a brand or distributor sells their products to stores, in bulk and at a significantly lower price than retail. These retailers and distributors then resell the goods to end consumers, after adding their own profit margin (usually in the neighborhood of 50%.
There are two different models for wholesale:
- Distribution Model – The wholesale seller purchases products in bulk and then resells those goods to retail outlets and stores.
- In-House Model – The wholesale seller produces their own products in bulk to sell directly to retailers.
How to get started in wholesale & create your business plan
Have a unique selling point.
USP becomes very important in the business world – done right, the specific advantages offered will attract consumers and become a guarantee of the product. Unique Selling Points help your brand stand out and can be seen as a value proposition as to why the consumer should choose your products or services over others.
Analyse your market and industry.
Benchmarking the competition is key. Determine who your target audience is, and develop marketing plans outlining how to reach this audience. Be aware of your competition, as well as the business structure and details of your customers, retailers, and suppliers.
Finances, pricing & budgets
A pricing strategy is needed to factor in cost, wholesale price and recommended retail price (MSRP). This is needed to maintain a balance between sales volume and profitability. This helps you stay competitive – it’s necessary to accelerate and grow your wholesale business while staying profitable. You will also need to have several initial investments to get you going, unless the business is self-funded. It’s wise to make a list of all expenses and how much you will need on a monthly basis to sustain all operations. Set relevant KPI reports to monitor and stay on top of your progress.
Digital wholesale platform
In our ever-changing world, going digital is a must for your business to grow. Creating an online storefront is the best way to accelerate and grow your wholesale business. Having inventory all in one system makes the day-to-day order management process easy to follow and manage. Digital SaaS platforms create new ways to pitch your brand to buyers along with time-saving features like inventory management, payment methods, seasonal catalogues and increased visibility. The best way to move wholesale trade digital is by using a B2B eCommerce Saas software that is cost-efficient and suits your business model and needs. Setting this up can lead to wholesale business advancement, as well as meaningful time and money savings.
Using a wholesale storefront, ecommerce will drive more traffic to your product listings, as increased search engine presence will lead more buyers to find your products. Candid Wholesale offers an ideal, easy-to-execute and use solution for storefront sharing. In just a few clicks, you can build a wholesale storefront ready to be shared globally, or just with a select list of targeted retailers.
Securing licence, permits and taxes
Making sure your business is registered as an entity, e.g. corporation or LLC, is another crucial step to take when getting started in wholesale. This will also protect you as both financial and legal concerns will be held by separate entities.
Always have a local tax professional by your side to guide you in keeping your business safe when it’s tax time. There will always be international transactions, so you will also need to figure out what sort of fees and filings arise when transactions are made across borders.
Physical location
Unless you’re a drop-shipper, having a warehouse to store inventory and fulfil orders is necessary whether you are manufacturing products or not. This will improve the workflow of your wholesale business through improved inventory management, which may in turn lead to better order fulfilment rates and better overall productivity.
RFID readers and barcode systems help eliminate human errors and accelerate the time your products will take from the warehouse to customers. Wholesale business warehouses require an efficient system of records concerning all products and their locations in the warehouse, which will reduce the time spent searching for items.
You should consider opening a factory of your own when you can, as it requires some capital to get started but will help expand your business in the long run.
Promote your wholesale business
Creating brand awareness is also a key aspect to pay attention to. Living in a time where advertisements bombard us constantly, it is important for brand awareness to attract new customers all the time. A cost-effective way to do this is by using social media, always optimising your message and hashtags and putting out engaging content.
Another way is to obtain more orders from existing loyal customers; systems optimised for reorders and integrated shipping encourage more orders from existing customers, as they are familiar with and already in favour of the streamlined process.
Offering mailing list sign-ups lets you advertise and offer personalised suggestions to returning customers.
Inventory management software
Effective inventory control lies at the heart of any successful wholesale business. This will improve your competitiveness and help manage wholesale purchases, tracking, sales and invoicing all in one place. Become an omnichannel seller and manage your wholesale business with Candid. With Candid, you will be able to synchronise wholesale and DTC inventory in real time and also have a downloadable version of detailed reports. Use Candid to keep track of your relationships effortlessly.
Adapt your wholesale business
As your wholesale business starts to grow, it is important to grow with it. Stay tuned for our next blog to get more updates on how to succeed at wholesale.
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