Before we start, just to make it clear that we are talking about a seller selling online direct to retailers.
What are the advantages of selling wholesale to retailers? Is it better than selling direct to consumers online?
Selling wholesale, you sell larger quantities of your product in each sale. Retailers expect to buy multiples of a product, and you can set minimum order quantities or minimum order value. With WooCommerce there are plugins that enable you to set minimum quantities per product and per order.
Selling to retailers does not automatically mean you will have a larger overall sales volume compared to selling to consumers. But it is an obvious truth that ten orders of one hundred of a product are probably easier to manage than one thousand orders of one of a product.
On the other hand, the pool of potential retailers is of course smaller than the pool of consumers.
And by selling to retailers you have effectively set up the retailers as gatekeepers between you and the eventual users. The retailers now dictate what products the consumers get to see. If the retailer doesn’t like, and so doesn’t buy a particular item of your stock, then the consumer never gets to see it. That means that the retailers have become the arbiter of public taste.
Of course, successful retailers are successful because, among other things, they are good judges of public taste. They know what their customers want and what will sell. And if one sells to several retailers, then the success of the sales becomes a way to analyse which retailer is good at knowing what will sell.
It is obvious that a seller needs more sales, which means more retailers, but knowing what will sell is another reason why a seller needs a stable of retailers and not just one or two.
With an online-only business it is almost certainly true that a seller on line will have a limited reach. So the opportunity to even come to the notice of consumers is limited. Targeting retailers and selling wholesale to them is more doable.
By selling wholesale to retailers, a seller can reduce marketing costs compared to selling directly to consumers because they don’t have to reach so many customers.
And with an online business, marketing to consumers means advertising with Google or Facebook advertisements, and it is expensive to make an impression on a lot of potential customers.
Another way to look at selling wholesale to retailers is that instead of spending money on targeted advertising campaigns and social media marketing, you can rely on retailers to promote and market your products to their own customer base. This can can build brand awareness, and brand loyalty. And that drives sales without the need for you to do any marketing. The retailer becomes your ambassador.
But first we have to find retailers and turn them into customers. So what are the options for wholesale marketing?
There are advertisements in trade magazines and there are trade shows.
Trade shows, where retailers and sellers some together, have one obvious characteristic. That is, that the buyers are retailers who are actively looking to buy. Of course, retailers must buy goods or else they will being their own business to a halt.
If the budget allows, then trade shows give you access to buyers from far and wide. Shows normally go on for two or three days, so there is a lot of potential. On the downside, there are hotel costs to think about as well as the considerable cost of having a stand at a show.
Advertisements in trade magazines can be like pouring money into a deep, dark well. They may work but how would one know? Offering a coupon can help identify which advertisement caught the buyer’s eye. But compare magazine advertising to advertising with Google or FaceBook. Of course, the likelihood of being able to target retailers with online ads is low.
With online advertisements to consumers, it is easy to determine who responds. If they click, they have responded. And it’s easy to tweak an online advertisement and compare results. It’s a lot murkier with print advertisements, whether to consumers or in trade magazines.
But trade shows and advertisements in trade magazines are not the only way to market to retailers. It is equally open to sellers to write to or visit retailers. That is the bottom line, getting out and seeing potential customers. And it costs nothing more that a thick skin to withstand rejection, and time in which to do go from shop to shop.
The advantages of selling wholesale to retailers
- Easier Order Fulfillment with wholesale: When selling wholesale to retailers, you can fulfill larger orders with fewer shipments. This can help to reduce your shipping costs and streamline your order fulfillment process, since you will be shipping to a smaller number of customers who are likely to order in larger quantities.
- A greater likelihood of repeat business. And with the larger order value compared to consume sales, the lifetime value of a retailer as a customer can be substantial.
- Brand Building: By selling wholesale to retailers, you can also build your brand and increase brand awareness. When your products are displayed in retail stores or online marketplaces, they can help to create a strong visual presence for your brand. This can lead to increased recognition and trust among consumers, which can ultimately drive more sales.
- The ability to simply get out there and talk to retailers.
One last word. It does not have to be all or nothing. One can sell direct to consumers and sell to retailers. I wrote an article about why it is better not to use the same domain / website for both B2B and B2C sales.