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Everything You Need To Know About Selling Wholesale On Shopify
1. QuickRead
Do you want to learn how to sell wholesale?
If your answer is Yes, You’re on the right track to hitting new heights of success.
Although most e-commerce entrepreneurs begin by selling directly to customers, wholesaling has a number of advantages that make it worthwhile to consider.
Wholesalers don’t have to worry about maintaining and servicing a large number of individual clients or sending things to a large number of different places.
Instead, you build profitable collaborations with a number of businesses. Not only will this offer you with a steady stream of revenue, but you’ll also be able to reduce your marketing costs by having a smaller number of people purchase at once.
So, where should you begin?
2. What is wholesaling?
Selling your products in bulk to another store, usually at a lower price, who then sells them to their clients is known as wholesaling.
It’s vital to remember that setting up a wholesale channel for your business still permits you to sell to end-users.
Large brick-and-mortar department stores, such as Walmart or Zellers, are typically the first examples of wholesale firms that come to mind. After all, wholesale is sometimes regarded as an outdated business model that is being disrupted by newer direct-to-consumer e-commerce ventures.
However, thanks to online marketplaces like Amazon, Wish, and Wayfair, wholesale has seen a transformation of its own in recent years. While e-commerce makes it easier for direct-to-consumer firms to succeed by lowering the entry barrier, wholesale still provides consumers with a simple shopping experience where they can find everything they need in one spot.
3. Why create a wholesale channel?
This newer form of wholesaling, which is commonly done through online marketplaces or tiny boutiques, has benefits that are attracting direct-to-consumer firms as well. Here are three reasons why establishing a wholesale channel could be beneficial to your business.
Increase sales without increasing marketing spend
To grow as a direct-to-consumer business, you’ll need to devote a significant portion of your revenue to marketing. After all, there is usually a cost associated with gaining a new customer.
By selling your products wholesale, you can delegate the cost of customer acquisition to another company, allowing you to reinvest your time and money in other aspects of your business.
Leverage other brands’ audiences to sell your product
Building a loyal audience of fans and customers, like acquiring new customers, is not an easy task. You can leverage the company’s goodwill to get your product into the hands of consumers by forming a wholesale partnership with an established brand that has already made a name for itself in your niche.
Enter new markets with less risk
Expanding your firm to a new country or territory comes with a number of associated costs, such as storage and logistics, or beginning from scratch marketing to a population that hasn’t heard of you. Finding another retailer with an established presence and supply chain in a new region might help reduce the risk of international growth by lowering your startup expenses.
Finally, a wholesale business model helps both the retailer and the wholesaler by increasing efficiency. The retailer receives a new, often complementary, product to offer without having to spend in R&D, while the wholesaler saves money on marketing by getting direct access to an established client base.
4.Creating a wholesale pricing strategy
Pricing is one of the most important aspects of running a successful wholesale business. When you sell directly to clients on your own website or in your own retail store, you get to keep whatever profit margin you set for yourself, which may sometimes be in excess of 50%.
Businesses generally give merchants a 50% discount off their standard retail price when purchasing wholesale. The substantial discount allows merchants to wholesale your product to their customers while still making a profit. Here’s an example of a good pricing strategy: a wholesale company would keep a 50% profit margin on wholesale purchases and a 75% profit margin on direct-to-consumer sales.
| Product SKU | Product Cost | Wholesale Price | MSRP |
| SLK101B | $20.00 | $40.00 | $80.00 |
| SPL103B | $12.00 | $24.00 | $48.00 |
| SPL107B | $6.00 | $12.00 | $24.00 |
As a result, in order to build a successful wholesale business, you must be able to provide a significant discount off your retail price to individuals ready to wholesale your goods. This can occasionally offer a variety of dangers for small firms, including the inability to be successful.
Fortunately, there are strategies to price your goods for wholesale in order to reduce the danger of losing money. One option is to give a discount based on the number of purchase orders placed. In this manner, merchants will be incentivized to place greater purchases in order to obtain a higher profit on the resale of their goods. Many wholesalers even have minimum order quantities (MOQs) that merchants must meet in order to carry their goods.
When you decide to wholesale your product and have it sold by several different locations, you may have difficulties with rival merchants undercutting each other on pricing. This is why developing an MSRP (Manufacturer’s Suggested Retail Price) is an essential component of any wholesale pricing strategy.
An MSRP is frequently included in a contract that a company would offer to a store that wants to sell its items. It ensures that the merchant will adhere to the suggested retail price, ensuring that the product cost is consistent whether it is found in stores or online. The MSRP is often seen next to individual goods on a wholesale site, or on a sales sheet or product brochure provided to prospective merchants that want to carry your product.
One item to consider when creating an MSRP agreement is if you want to enable discounting during holidays such as Black Friday and Cyber Monday, or if you want to designate certain periods when you might want to offer the goods to buyers on your own website.
As the wholesale supplier, you get to determine the rules that your retailers must follow, but keeping a fair price balance is critical to your retailers’ success. If your merchants earn a profit selling your product, they’ll keep coming back and placing greater purchases.
5. Setting up your wholesale storefront
When it comes to starting an online wholesale business, you must first decide whether you want to build a pure wholesale business or offer a wholesale option in addition to selling directly to customers through your own shop.
There are several approaches you may take, and what you pick will ultimately be determined by your circumstances.
Password protect your wholesale store
If you want to solely offer your goods wholesale to other retailers, you should set up a password-protected web site where only your retailers can place orders at your discounted pricing.
The simplest approach to secure your online business is to use Shopify’s password protection function, which is accessible via the Shopify admin.
You may put up all of your items at a discounted price for your merchants to purchase by opening a password-protected web store.
If you run a bigger wholesale firm and are concerned about your password being shared with unauthorized merchants, you might choose a more advanced password protection tool like Locksmith.
Locksmith offers a plethora of configurable options that allow you complete control over who can see your store and what items they may buy. Customers may create accounts and generate their own unique passwords instead of using a single generic password.
You may also allow consumers access to items by adding tags to their profiles, sending them a secret link, customizing your inventory according to on the country they’re browsing from, and a variety of additional circumstances.
Use Shopify to open a separate wholesale storefront
There are numerous alternatives available for businesses that already have a direct-to-consumer store but wish to build a wholesale channel for retail firms to buy from. The easiest would be to create a second Shopify store with a different URL and password secure it with one of the two solutions described above.
If your firm has a significant number of sales, you should consider subscribing to Shopify Plus and making use of its wholesale channel functionality. You may use Shopify Plus to build a password-protected wholesale channel within your existing store.
The wholesale channel creates a wholesale storefront utilizing your current items, so there is very little additional effort needed in getting this channel up and running. You may also customize pricing depending on client groups, utilizing percentages off or volume-based discounts. Best of all, your sales data within Shopify are entirely isolated from your direct-to-consumer sales.
Use a wholesale app to create a wholesale channel
Another option for setting up a wholesale channel on your Shopify store is to use a Shopify app like Wholesale Club. Businesses may use Wholesale Club to divide their retail consumers into “tiers,” each of which is allocated particular discounts off the regular retail rates.
The app also has a marketing feature that can be used to encourage clients to buy more in order to receive a greater discount.
Wholesale pricing is only available to clients who have authorized retailer accounts and are logged in at Wholesale Club. This enables you to establish a safe wholesale channel in addition to your direct-to-consumer one, without the need for a separate store or product catalog.
6.Accepting wholesale payments
One distinction between wholesale and direct-to-consumer purchases is the payment terms often anticipated from your retail partners. In contrast to a typical transaction, if a store purchases a big amount of your goods, they may request payment conditions known as “Net X”: an agreement that the net payment is expected in full within a certain number of days (e.g. Net 30 for payment within 30 days).
If a retailer requests these preferred payment terms, it indicates they want to pay you as a vendor within a particular number of days of receiving their purchase. Shipping a significant order to a shop before they have paid you can be dangerous, especially for small firms. This is why it is frequently recommended that you obtain references and conduct some due diligence before agreeing to these agreements.
How to add net payment terms to your store
Net payment conditions are available in both the Shopify applications Wholesaler and Wholesale Club. Customers can be tagged based on the payment conditions they agreed to, and when they purchase at your business, they can submit unpaid orders.
How to collect payment from wholesale customers
There are a few choices for firms operating their wholesale channel online when it comes to actually collect a later payment. One option is to record wholesale orders as draft orders on your Shopify site, which allows you to issue invoices to your clients through Shopify for them to pay by credit card later. When using draught orders, you can also record payment by check by marking an order as paid after the money is received.
Another option for accepting late payments is Afterpay. The app is typically used for direct-to-consumer sales, allowing stores to let customers pay for their products in installments.
This similar functionality may be utilized for a wholesale channel or shop, allowing you to receive payment information from retail consumers and only bill them in installments later. You might use an app like Afterpay to automate the money collection process and eliminate the need to manually track and check on outstanding bills.
7. Finding wholesale customers
Now that you’ve sorted out your wholesale pricing plan and have a wholesale channel set up on your site, it’s time to look for possible wholesale clients. But where can you locate these stores?
Using your direct-to-consumer website
A retail consumer will frequently discover you first. If your direct-to-consumer advertising has been successful, you may have already received communications from distributors interested in carrying your product online or in their physical locations.
When you advertise to customers online, you are also reaching out to other company owners who may be interested in stocking your product. This is why it’s critical to have a wholesale inquiry link in your website’s footer. This makes it simple for anyone who visits your website to contact you about prospective possibilities.
Attending trade shows
Tradeshows are one of the most traditional locations for a manufacturer or wholesaler to meet new people and discover retail partners. From infant clothes and athletic leisure wear to furniture and home décor, there are specialist trade exhibitions for virtually every retail sector. There are even trade show directories that identify the best trade exhibitions based on their categories.
Trade exhibitions, on the other hand, may be costly. They frequently necessitate travel to the location of the event, as well as a significant price for a booth if you wish to exhibit there. Although trade fairs are a fantastic way to meet new people and discover new consumers, it is important attending them first and strolling the floor to ensure that it is beneficial before opting to display.
Joining a dropship or wholesale marketplace
Another option to get your goods on the websites of other merchants is to use online supplier marketplaces such as Doba or Modalyst.
Many retailers are searching for local suppliers to dropship items through their ecommerce shop. You may list items from your Shopify store in these marketplaces (typically for a nominal charge) and begin dropshipping orders to retailers as they generate sales for you.
Reaching out to complimentary brands
One additional benefit of a wholesale channel is that, unlike direct-to-consumer, it is not necessarily necessary to have a big number of consumers to expand. If you have a few high-quality merchants that are successful in selling your goods, they will return and place larger purchases on a regular basis.
It’s recommended individually reaching out to a firm that you feel may be a good fit via social media, phone, or email to discover these chosen partners. Starting with a company that offers complementary goods might be a smart place to start.
Some of the most successful wholesale partnerships are formed via personal contact and the establishment of trust and rapport in person. So, if you notice a brand you like, reach out to them if you think working together will be beneficial to both parties.
Make sure your product descriptions and photos are spot on
Retailers, contrary to popular belief, place a high value on product descriptions and images. This allows them to have a better understanding of the products before making a big buy.
Take high-quality photos of your items if you want to make a strong first impression on buyers. To guarantee retailers can see the finer details of your items easily, choose a basic background and lighting (natural lighting works best for most products).
What about descriptions of products? From personal experience, incorporating a narrative is one of the most effective methods to attract customers.
But before that, you should talk about how this product can benefit them in a very short and brief manner. Lengthy descriptions can take customers’ time, so they should be short but to the point. If you fail to do that by yourself, then give a try to an online text summarizer. It will create a short version of your benefits, which you can include in your product description.
Conclusion
The growth of ecommerce has enabled direct-to-consumer companies to launch and grow online more quickly. As a result, many people dismissed wholesale as a passing retail trend. However, by reimagining the way wholesale operates, a new breed of wholesale firms are prospering in the age of online.
Wholesale companies are being started by both direct-to-consumer firms searching for additional sales channels and entrepreneurs trying to save money on marketing. You may start opening your business up to new revenue-generating relationships and watch your product flourish amongst other complimentary brands with the appropriate price strategy and adequate setup.
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