Selling to Wholesalers: A Comprehensive Guide for Vendors
Selling to wholesalers is rewarding, but it’s no easy task. The allure of bulk orders and wide distribution can have any vendor seeing dollar signs. However, meeting these wholesalers is a chall
November 21, 2023
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Selling to wholesalers is rewarding, but it’s no easy task. The allure of bulk orders and wide distribution can have any vendor seeing dollar signs. However, meeting these wholesalers is a challenge, let alone making the sale. You’ll need patience, insight into the wholesaler’s needs, and a great product.
The National Association of Wholesale-Distributors indicates that selling to wholesalers means entering a vast, dynamic marketplace. Wholesalers buy in bulk and seek quality, as well as competitive pricing. For vendors, this means a chance for high-volume sales. To enjoy those sales, they must build strong business relationships.
Do you want to sell large quantities of goods in bulk? If so, this guide will get you started on the road to doing big business with wholesale distributors.
Table of Contents
What are the Advantages of Selling to Wholesalers?
The wholesale marketplace is a conduit between vendors and retailers or consumers. They have a significant presence in logistics and commerce. While there is an instinct in sales to ‘cut out the middleman’, wholesalers can be a boon for vendors.
Streamlined Sales Process: Working with wholesalers means you deal with fewer clients while still enjoying profitable sales. This makes administrative duties less stressful.
Greater Market Penetration: Wholesalers typically have established networks and relationships with various retailers, providing an opportunity to get your products into multiple outlets.
Steady Cash Flow: Routine, predictable orders from wholesale partners can stabilize your revenue streams.
Reduced Marketing Expenses: Selling to wholesalers can reduce the need for large consumer-targeted marketing campaigns. Instead, you can focus your in-house efforts on a more targeted audience.
Inventory Management: Wholesalers often buy in bulk and store the products. This reduces the storage burden on vendors.
Feedback Loop: Wholesalers can provide valuable market feedback thanks to their experience with retailers.
The wholesale market is competitive. Standing out requires a combination of quality, pricing, and strategic relationships. Before you can wholesale your product, you’ll first need to master the art and strategy of selling to these distributors.
How to Sell to Wholesalers: Basics and Fundamentals
There are several steps to getting your first sale to a wholesale distributor. Obviously, you’ll need wholesale items to sell. Additionally, an effective sales pitch, a sensible pricing structure, and a distribution strategy are required.
However, the most difficult step may be the first: finding and meeting wholesaler representatives.
How to Sell Your Products To Wholesalers: Meet and Greet
Finding the right wholesalers is a critical first step in the wholesale journey. These distributors can increase your product’s reach on a huge scale, but only if you can connect with them.
Here’s how to find and make an impression on these vital partners:
Attend Trade Shows and Conferences: These events are a goldmine for networking. They gather industry professionals under one roof, allowing for in-person meetings and the opportunity to show off your products.
Cold Calling and Emails: It may seem traditional, but a well-researched and personalized outreach can get the ball rolling with a wholesaler partnership. Ensure your sales pitch is targeted, highlighting how your product meets the wholesaler’s needs.
Social Media: You can join wholesale groups on Linkedin to connect with decision-makers directly. Platforms like Instagram or Facebook can also showcase your product’s popularity and features.
Using Wholesale Directories: Many online directories list wholesalers by industry or product category. Sites like Worldwide Brands Wholesale Central are a good starting point.
Referrals From Retailers: Tap into your business network. Perhaps you’ve sold directly to retailers on a small scale. These contacts could introduce you to trustworthy and relevant wholesalers.
Hire a Broker or Sales Representative: If you have the budget, consider hiring a professional with existing wholesaler relationships. Their experience and connections can fast-track your entry into the wholesale market.
Remember, the goal isn’t just to find wholesalers, but to establish professional partnerships. Once you’ve identified potential wholesalers, invest time in understanding their needs. Find out how your product can augment their catalog.
What Makes a Product Attractive for Wholesale?
Wholesalers receive thousands of sales pitches in a year. To ensure your product stands out and appeals to them, it’s essential to understand what makes a product and its vendor attractive for wholesale partnerships.
Firstly, make sure your products meet these standards.
Quality Manufacturing: A product that maintains consistent quality batch after batch indicates reliability. Wholesalers prefer not to deal with returns and complaints about poorly-made merchandise.
Competitive Pricing: While quality is crucial, so is price. Your product should be priced in a manner that allows both you and the wholesaler to enjoy a decent profit margin.
Unique Selling Points: In a crowded market, products that stand out or offer something different can be more appealing to wholesalers. Brand awareness could be one such point.
Market Trends: Products that align with current market demands or emerging trends are more likely to be picked up by wholesalers.
Regulatory Compliance: Ensure that your product meets all the necessary industry regulations and standards. Wholesalers won’t risk partnering with non-compliant products.
If you’re a vendor looking to do business with a wholesaler, make sure you exhibit the following qualities.
Consistent Communication: Wholesalers expect their vendors to practice transparent, proactive communication.
Flexibility: The ability to adapt to a wholesaler’s needs, whether it’s tweaking the product slightly or accommodating specific packaging requests, can be a significant advantage.
Financial Stability: Wholesalers prefer vendors who are financially stable. Such vendors are less likely to run into production or supply chain issues.
After-Sales Support: Offering support after a sale, whether it’s addressing concerns or providing product training, can be a deciding factor for many wholesalers.
The relationship between a vendor and a wholesale business goes beyond just product sales. It’s about mutual growth, trust, and partnership. With the right product and business practices, you increase your chances to sell wholesale.
Selling Your Product Wholesale: Pricing Structure
Creating a balanced pricing structure isn’t easy. Your price should reflect your product’s value and allow you and the wholesaler to profit. Missteps in pricing can tank sales or leave money on the table.
If you’re a business owner with sales experience, you’re already familiar with establishing a pricing structure. It should come as no surprise that wholesalers expect a significant discount since they buy in bulk.
Selling to wholesalers and retailers is similar, but not exactly the same. If you’ve sold to retailers, you’re probably used to a profit margin of approximately 40 percent of your product’s production cost. You can expect to reduce that number by 10 to 50 percent for a wholesale price.
In this scenario, imagine you have a product that costs $100.00 to produce. You’ve set minimum order quantities (MOQs) of 100 for a wholesale price. In the following chart, we’ll lay out what a retail purchase and profit scenario looks like compared to a wholesale order.
Profit Margin: 40%
Profit Margin: 20%
Retail Price: $140.00
Wholesale Price: $120.00
Sale Quantity: 10
Sale Quantity: 100
While margins are lower, the opportunity for bulk profits from wholesale buyers is obvious. With high-quantity sales, you can survive a shave to your margins.
How do you Sell to Wholesale?: The Sales Pitch
You’ve got a great product, you’ve got a pricing structure in mind, and you’ve secured a meeting with a wholesaler. Now it’s time to convince your wholesale customer to make a purchase. If you’ve ever wondered what contestants on Shark Tank feel like, you’re about to find out.
Keep the following steps in mind when you prepare your sales pitch.
Research the Wholesaler: Get familiar with their product lineup, market focus, and customer demographics. Doing so will let you adjust your sales pitch, showing how your product fits perfectly into their portfolio.
Identify the Decision Makers: Find out who makes the buying decisions at the company. Ultimately, this is the person to whom you’re selling.
Build Your Brand: Beyond just the features and benefits, share the story behind your brand. This emotional connection can make your product more memorable.
Customer Testimonials: Share positive feedback from existing customers. This builds confidence in your business and shows proof of product value.
Product Samples: Let your product speak for itself. Provide wholesalers with samples or a trial batch, so they can determine quality and demand firsthand.
Be Ready For Questions: Wholesale purchasers are responsible for vetting products, and this means plenty of questions. This could range from product shelf life to manufacturing capabilities.
Handle Objections Gracefully: If a wholesaler has reservations, address them head-on with facts and assurance. Don’t get defensive.
Go in with a genuine desire to build a mutually profitable partnership. Approach the pitch as a conversation, not just a presentation. This will give you the best chance at securing not just one sale, but several more in the future.
Shipping Your Products to Wholesalers
Once you’ve built a partnership with a wholesaler, you’ll need to address a couple of logistical concerns.
How to package your items in bulk
How to ensure your shipments arrive intact and on time
For wholesale orders, remember these packaging strategies.
Efficiency and Safety: Pack your products with an eye toward minimizing wasted space, while also preventing damage and product loss.
Environmental Considerations: With a global shift towards sustainability, it’s wise to use eco-friendly, biodegradable packing materials. This could even be a selling point when negotiating with eco-conscious wholesalers.
Ease of Handling: Packaging should also be easy to unload and stock for the wholesalers. Think about box sizes, labeling, and even the use of pallets if appropriate.
Finally, it’s time to ship your goods out. At this crucial juncture, you’ll need a logistics service you can depend on. They’ll play a big part in making sure you get repeat business. If you haven’t found that service yet, then look no further.
Collaborating with Product Distribution Strategy for Success
As you can see, selling to wholesalers is no easy task. However, the rewards of consistent, profitable sales make it a challenge worth pursuing. The right logistics partner can make this difficult process considerably easier.
Product Distribution Strategy has the experience and resources vendors need to ship their products safely and efficiently. Trust us with needs such as:
We need a bit more information! Give us some additional details about what you need help with so we can match you with one of our consultants. Our goal at R+L Global Logistics is to provide expert consultation to enhance the product distribution strategy for a variety of companies.