If you’re just starting out in the world of wholesale selling, you may feel a bit overwhelmed. How do you set wholesale prices? How do you ensure your costs are covered? Don’t worry - this beginner’s guide to selling wholesale is here to help. In this blog post, we’ll cover all the basics of setting up a successful wholesale business, including setting the right wholesale prices and managing costs. Read on to find out how to get started selling wholesale!
Finding the right products
One of the most crucial steps in selling wholesale is finding the right products. This can make or break your business, so it's essential to choose wisely. Consider what products would be in high demand in your target market, and make sure they are unique and not readily available at other wholesale distributors. Research trending products or popular niche items that may have less competition. It's also important to ensure that the products you choose have a sufficient profit margin when sold at wholesale prices. Take the time to thoroughly analyze the market and assess which products have the potential to be the most profitable for your business. Remember, it's not just about what products you sell but how you sell them, so make sure you're confident in your ability to market and distribute them successfully.
Research your target market
Before you start selling wholesale, it's important to research your target market. You want to know who your customers are and what they are looking for. You should start by deciding where you want to sell your products. Do you want to sell online, in physical stores, or both?
If you are looking to sell in physical stores, you should research stockists in your area. A stockist is a retailer who buys products in bulk and resells them to customers. You can find stockists by doing a simple internet search or by visiting stores in your area to see if they carry similar products.
If you want to sell online, you should research online marketplaces and retailers. There are many platforms where you can sell your products wholesale, such as Amazon, Etsy Wholesale, and Alibaba. You can also create your own website and sell your products directly to customers.
Once you have found potential stockists or online retailers, it's important to research their customer base. Look at their demographic and see if it aligns with your target market. If it does, reach out to them and pitch your products. If it doesn't, keep looking for the right fit.
In addition to researching potential customers, you should also research your competition. Look at what similar products are being sold for and how they are marketed. This will help you set your own prices and stand out from the competition.
In summary, research is key when it comes to selling wholesale. Take the time to find the right stockists or online retailers, understand your target market, and research your competition. This will help you set yourself up for success and ensure that you are selling your products to the right audience.
Decide on your pricing
Once you've found the right products and researched your target market, it's time to decide on your pricing. Your wholesale price should cover your costs and leave enough room for a wholesale margin, which is the difference between the wholesale price and your cost of goods sold (COGS). The wholesale margin is how you make a profit on your wholesale sales.
To determine your wholesale price, calculate your COGS by adding up the cost of materials, labor, and any other expenses associated with producing or sourcing your products. Then, add your desired wholesale margin to the COGS to get your wholesale price. Have a look at the wholesale price calculator
The profit margin for wholesale is typically lower than for retail because retailers have additional costs like rent, utilities, and salaries. However, you still need to make sure that your wholesale price allows you to cover your expenses and make a reasonable profit.
When deciding on your pricing, consider factors like your competitors' prices, the value you offer compared to them, and the perceived value of your products in your target market. You may also need to adjust your pricing based on the volume of the order, as larger orders may allow you to offer lower prices.
Remember that your wholesale price is not set in stone and you may need to adjust it over time based on changes in your costs, market demand, and competition. However, having a solid pricing strategy in place from the beginning will help you negotiate with potential buyers and make sure that your wholesale sales are profitable.
Create a sales deck
Once you've found the right products and decided on your pricing, it's time to create a sales deck to present to potential distributors or dropshipping partners. A sales deck is a visual presentation that showcases your products, their features and benefits, and how they fit into the market. It's essentially a condensed version of your product catalogue that's designed to make a great impression on potential buyers.
To create a sales deck, start by organizing your product information in a clear and concise manner. Include product images, descriptions, wholesale costs, and product prices. You may also want to highlight any unique features or selling points that make your products stand out from the competition.
It's important to remember that your sales deck is a tool to help you sell your products. So, it should be visually appealing, easy to navigate, and compelling enough to hold the attention of potential buyers. Consider using a mix of images, graphics, and bullet points to keep your presentation interesting and engaging.
To give you an idea of what a sales deck might look like, here are some samples you can reference:
- Sample Sales Deck for Beauty Products: This deck showcases a line of high-end skincare products with images, product descriptions, and pricing information.
- Sample Sales Deck for Tech Accessories: This deck focuses on phone and laptop accessories, and includes features, pricing, and target market information.
- Sample Sales Deck for Food Products: This deck highlights a variety of gourmet food products with images, descriptions, and pricing details.
Remember that your sales deck should be customized to your products and target market. Use these samples as a starting point, but make sure to add your own unique touch to stand out from the competition.
Negotiate the contract
Once you have found the right products and have decided on your pricing, it's time to negotiate the contract with your potential wholesale buyers. This is an important step to ensure that both parties are protected legally and that all terms are agreed upon before any products are exchanged.
It is crucial to have a solid contract in place that outlines the terms of the agreement, such as minimum order quantities, payment terms, delivery timelines, and any warranties or guarantees offered by both parties. A clear contract ensures that there are no misunderstandings or miscommunications later on down the line.
When negotiating the contract, be clear about what you are willing and able to offer your wholesale buyers. For instance, if you offer discounts for larger orders or if you can provide free shipping, make sure to highlight these points. You also need to agree on a payment schedule, which could be payment upfront, a deposit followed by the balance on delivery, or even a payment plan.
Make sure that you also cover any legal issues in your contract. This could include things like intellectual property rights, warranties, or product safety regulations. Consult with a lawyer to ensure that your contract is compliant with any applicable laws and regulations.
Once both parties have agreed on the terms, sign the contract and keep a copy for your records. It is important to ensure that both you and your wholesale buyer have a copy of the signed contract and understand the obligations outlined within it.
Negotiating a wholesale contract can be a time-consuming process, but it is crucial to ensure that all parties are on the same page and understand what is expected of them. By taking the time to create a solid contract, you can establish a successful and mutually beneficial relationship with your wholesale buyers.
Fulfill your orders
Now that you've secured your first few wholesale orders, it's time to fulfill them. There are a few different methods you can use to fulfill orders, including dropshipping, using a distributor, or working with stockists.
If you're dropshipping, you won't need to worry about production or shipping – the manufacturer or supplier will handle that for you. All you need to do is send the customer's order details to the supplier, and they'll take care of the rest.
If you're using a distributor, they will handle all of the logistics for you, from production to shipping. You'll need to communicate your order details to the distributor and work with them to ensure that your products are delivered to your customers on time.
Finally, if you're working with stockists, you'll need to ensure that you have enough inventory on hand to fulfill orders. Keep in mind that if you're producing your own products, you'll need to account for production lead times and ensure that you have enough stock on hand to meet demand.
No matter which method you choose, it's essential to keep your customers informed throughout the fulfillment process. Make sure to provide tracking information and any necessary updates on the status of their orders.
With the right fulfillment strategy in place, you'll be well on your way to building a successful wholesale business.
