Selling wholesale in 2019
Getting ready to take the plunge
There might have been a time when having one’s products in brick-and-mortar stores was a choice for an e-commerce.
But not anymore. Now that shoppers have developed the habit of browsing through e-commerce stores on their phones while touring brick-and-mortar ones, comparing product features and prices, being both online and in stores is virtually a necessity.
However, as numerous experts point out, selling wholesale to brick-and-mortar stores takes a great deal of planning so that it can truly work for an e-commerce owner.
Here are a few issues they stress should be addressed before one sends a first e-mail to a wholesaler.
Selling wholesale means being in a position to deliver large product volumes whenever required. So how big an order can your e-commerce handle both in terms of production capacity and costs?
“You’ll start to ask yourself tough questions like these that are imperative for scaling up,” writes Mei Park of Creative Hive. “How can you lower your costs so you can make more profit? Where can you source for better priced materials…Where and how can you create systems to be more efficient?”
Stores will expect wholesale prices, that is, at least half one’s retail prices, the challenge being to lower production costs while maintaining the quality that makes the product sell, Ms. Park writes. (1)
As Clare Yuille, a wholesale consultant with Indie Retail Academy, points out, “[y]our minimum order is there to protect you. It keeps cash flowing through your business.” However, this raises complex issues. For example, requesting a large minimum purchase will mean the buyer will buy less often than if he can buy small quantities at regular intervals, she said.
One should also consider the product volume required to best represent one’s brand in a store. “Are you happy for customers to have a couple of designs to choose from, or do you want [retailers carrying your line] to have a comprehensive collection that showcases your entire range,” Ms. Yuille said. (2)
Loss of control may extend to the way a retailer will choose to market one’s products, Ms. Randolph said. “It may be harder to control all marketing messages if your wholesale buyers are promoting your products through their marketing channels (although you can define what is acceptable in your terms and conditions).” (4)
Some e-commerce may be especially concerned about the way retailers will market their lines, and only contact retailers whose image and approach are in line with their products. With this in mind, some e-commerce owners will opt for major retailers while others may prefer small independent stores.
And then, product display in retailers’ stores may require different packaging than the one used to ship products purchased online. A whole new packaging concept might have to be developed to best display one’s products on store shelves. Although this may raise production costs, having one’s products handsomely displayed in stores might boost the brand’s image and lead to increased online sales for that e-commerce.
TO CONCLUDE: WHEN IS READY READY ENOUGH TO GO AHEAD AND START SELLING WHOLESALE?
As Bill Bubenik of West Park Creative noted, “I think there is a temptation to believe that everyone else has it all together. We look around us at our competition or friends and because of the way they are portraying themselves on social media it appears that they have all the answers. And I’m sitting here with hardly anything figured out.” (5)
Appearances can be deceptive as we all know. So when should one decide it’s time to jump in? “My advice would be…just start,” said Lydia Crespo of Argaman&Defiance. “It’s a process that should be refined. Striving for perfection on your first pass, [you] will be left frustrated, unsatisfied, and more likely to overlook creative solutions.
“I think allowing yourself room to make mistakes and recover from mistakes is the best and quickest solution to building a solid wholesale business,” Ms. Crespo said. (5)
So with all this in mind, wishing you the best in wholesale!