Selling products to stores can be a great way to increase sales and reach new customers as a business. However, it does require some extra work and consideration compared to just selling directly to consumers. Some key questions to ask when considering selling wholesale to stores include:
Can anyone sell wholesale to stores?
Generally yes, any business that manufactures or holds inventory can choose to sell wholesale to retailers. However, you need to ensure you have the right operations and business model in place first.
What types of stores buy wholesale?
All kinds of brick-and-mortar retail stores buy inventory wholesale from vendors and wholesalers. This includes large national chains, small boutiques, gift shops, hardware stores, grocery stores, pharmacies, convenience stores, and more. Online retailers may also purchase wholesale.
How do you find stores to sell to?
Research stores in your ideal geographic area or that fit your product niche. Attend trade shows to network with store buyers. Use sales reps or distribution companies. Get referrals from other wholesale vendors. Cold call or email stores directly.
What requirements do stores have?
Stores will expect wholesale orders to meet certain minimums. You need to offer competitive wholesale pricing. They expect quick turnaround on deliveries. You may need to provide merchandising displays or marketing materials. Stores want to see an established business history and may check credit.
Do you need a wholesale license?
Some states require a wholesale license or permit to sell products wholesale. However, a general business license is often sufficient especially for smaller sellers. You need to charge sales tax appropriately.
How do you set wholesale prices?
Base wholesale price on your product cost while leaving enough margin for the retailer to profit. Discount off MSRP. Research competitive wholesale pricing. Factor in your brand reputation and product demand.
Building Relationships with Retailers
Successfully selling your products wholesale to retailers requires building strong mutually beneficial business relationships. Here are some tips for establishing and nurturing retail partnerships:
– Attend industry trade shows to meet and network with potential retail buyers in person. Having conversations face-to-face goes a long way. Exchange business cards and follow up after the event.
– Do cold outreach to retailers you identified as a good fit. Call the store manager directly and pitch meeting to discuss a partnership. Offer to send samples. Be persistent and polite in follow-ups.
– Provide exceptional customer service to retailer accounts. Be reliable in fulfilling orders accurately and quickly. Clearly communicate about inventory levels, shipping timelines, minimum orders, and any issues.
– Offer motivational wholesale pricing and discounts for bulk orders. Provide retailers exclusive products or bundles to help drive sales.
– Use sales reps or manufacturers reps to establish and maintain relationships with retailers on your behalf. Their connections and sales expertise can help get your foot in the door.
– Go above and beyond with product training for store staff so they can knowledgeably sell your items to consumers. Provide retailers with marketing materials like signage, displays, and product sheets.
– Build loyalty with retailers by consistently delivering a quality product that sells. Reorders show your products are working for their business.
– Stay in touch with store managers even outside sales talks to foster a connection. Send holiday cards or product samples to remind them of your brand.
– Listen carefully to feedback from retailers on what sells well, what consumers ask for, and how you can improve. Let their real-world insights guide product development.
– Be flexible and willing to adapt within reason to accommodate retailers’ needs. This may mean creating special packages, sizes or pricing, or providing delivery to each store rather than through a warehouse.
Getting Your Product into Stores
Convincing retail stores to carry your product can take persistence. Be patient, as the process may take many months before finalizing an order. Here are some steps to help get your product on store shelves:
Create a Target List of Retailers
Research and make a list of brick-and-mortar retail stores that fit your brand identity and target audience. While casting a wide net, focus on getting into a few stores with the best alignment first.
Contact Buyers
Call or email the retail buyer or store manager directly. Briefly introduce your product and company. Offer to send samples and product information for consideration. Follow up politely if you get no response.
Send a Strong Sales Package
Send retailers a professional sales kit with product samples, images, catalog, sell sheets, and wholesale terms. Include information about your company, history, mission, and any press coverage or reviews.
Offer Wholesale Pricing
Provide specifics on your wholesale rates and minimum order quantities. Offer discounted pricing for bulk orders. Be willing to negotiate to match competitors’ pricing.
Arrange In-Person Sales Meetings
Try to schedule in-person meetings with store buyers. Bring more samples and demonstrate your product’s quality and profit potential. Be prepared to answer buyers’ questions knowledgeably.
Start Small
Suggest a small trial purchase order so the store can test selling your product before committing to a large inventory order. Offer discounts on this first order to secure the account.
Highlight Your Marketing Support
Detail ways you will support driving sales of your product in their stores through promotions, advertising, signage, product training for staff, etc.
Provide Excellent Customer Service
Provide timely, accurate shipments and inventory updates. Resolve any issues immediately. Solid customer service helps build the relationship to pave the way for larger orders.
Ask for the Order!
Finally, ask the buyer directly to place an initial wholesale order. Be prepared to negotiate details like quantity, delivery dates, and payment terms to lock in the deal.
Fulfilling Wholesale Orders
To meet expectations of retailers and maintain your wholesale accounts, it’s important to have solid order fulfillment operations in place, including:
Accurate Inventory Management
Closely track inventory on-hand for each product/size. Update retailers as stock becomes low to avoid overselling. Have a plan to replenish popular products.
Efficient Picking and Packing
Create system to ensure each order is filled completely and accurately. Double check contents before packing securely in shipping boxes.
Fast Order Turnaround
Commit to quick turnaround so retailers get orders within your stated delivery timeframe. Organize warehouse space to facilitate faster processing.
Prompt Invoicing and Shipping
Send invoice as soon as order is fulfilled. Generate shipping labels and get boxed orders to carrier quickly to prevent backlogs.
EDI Order Management
Set up Electronic Data Interchange to seamlessly receive and process retailer orders digitally. Automates parts of the fulfillment process.
Transparent Communication
Keep retailers updated on order status, inventory updates, shipping confirmations, and any delays. Set proper expectations.
Careful Quality Control
Inspect products and packing before shipping. Make sure only defect-free items in sellable condition are sent to stores.
Reasonable Minimums
Offer reasonable minimum order sizes and units per case pack to make it feasible for smaller stores to place reorders and maintain stock.
Fast Restocking
Be ready to quickly turn around reorders from retailers. Make it easy for stores to restock popular products that sell through fast.
Key Requirements for Wholesale Success
Selling your products wholesale to retail stores can significantly grow your small business, but does require meeting some requirements to achieve success, such as:
Consistent Cash Flow
Wholesale requires larger upfront inventory purchases and delays in payment. Maintain adequate cash flow to fulfill orders without payment until retailers sell through stock.
Volume Discounts
Offer sliding price discounts based on order volume. This gives stores incentive to purchase more to get better margins. Discounts range from 5-15% typically based on dollars spent.
Minimum Order Quantities
Require minimum dollar amounts for opening orders to make wholesale worthwhile. Common starting minimums range from $150 to $500. Get feedback from retailers on reasonable minimum reorder amounts.
Extended Payment Terms
Expect to offer payment terms of Net 30 at minimum. Many retailers expect Net 60 or 90 day terms. Absorb this cost and plan cash flow accordingly.
Brand Consistency
Require retailers to sell your product under your branded name and packaging. Provide images and guidelines for proper brand representation in store.
Marketing Support
Take responsibility for promoting your product through provided marketing assets. Support retailers through activities like discounts, sales reps, and demonstrations.
Reliable Customer Service
Provide retailers with direct contacts for all account needs. Be highly responsive with issues to maintain trust. Assign dedicated rep for large accounts.
Order Fulfillment Systems
Invest in business systems needed to efficiently process and ship wholesale orders without error. Automate where possible.
Legal and Regulatory Compliance
Consult experts to ensure compliance with all licensing, permitting, sales tax collection, and other regulations for selling wholesale.
Mistakes to Avoid When Starting Out in Wholesale
When breaking into the world of wholesale for the first time, it’s easy to make some missteps. Be cautious of these common mistakes:
– Taking on too many retailers at once without the inventory or operations to support added distribution. Start slow with just 1-2 accounts and build up.
– Accepting very small opening orders from retailers. Hold out for minimums that make the account worthwhile for both parties. Don’t undervalue your products.
– Offering prices, discounts, and terms that squeeze your own profit margin too thin just to get the account. Give fair deals that work for everyone.
– Promising unrealistic delivery timeframes that you can’t consistently meet. Under promise and over deliver on shipping estimates.
– Poor communication with retailers on order status, inventory updates, shipping confirmations, etc. Over communicate to stay on the same page.
– Sending retailers inferior product samples, images, or sales materials that don’t accurately showcase your brand. Invest in great marketing assets.
– Assuming a verbal agreement or handshake deal means the order is secured. Get every order and all terms in writing before fulfilling.
– Failing to formalize account contracts detailing wholesale pricing, minimums, exclusivity, payment terms, customer service, etc. Leave no ambiguity.
– Changing packaging or product specs without notifying retailers. Wholesale customers need a consistent product to deliver to their consumers.
– Letting stock run out frequently. Stay on top of communicating with retailers as inventory runs low to avoid losing sales and credibility.
– Failing to resolve issues, disagreements or concerns raised by retail accounts promptly. Make their needs a top priority.
Wholesale Checklist for Retail Meetings
To maximize success when meeting with retail buyers, make sure to bring and cover the following wholesale checklist:
– Professional sell sheets with product features, specs and images
– Physical product samples
– Information on company history and capabilities
– Overview of customer service and order fulfillment process
– Wholesale price list with suggested MSRP
– Wholesale discounts and minimum order quantities
– Payment terms and lead time estimates
– Warranty and return/exchange policies
– Mock ups of packaging and labeling
– Plan for initial inventory order quantity
– Discussion of payment and ordering procedures
– Request for opening order and follow up timeline
– Completed W-9 tax form
– Signed confidentiality agreement
– Sales and marketing support offerings
– Information on inventory tracking and restocking
– Contact information for questions and reorders
– Timeline for sending final wholesale agreement
Being prepared with this checklist helps demonstrate professionalism when pitching to stores and provides buyers with all the details needed to place an order
Conclusion
Selling your products wholesale to retailers provides tremendous opportunity to profitably grow your business. But breaking into the world of wholesale selling requires effort, patience, persistence, and learning as you go. Stay focused on building genuine relationships with stores through exceptional customer service, fair pricing, strong marketing support, and quality products that sell. Avoid common beginner mistakes. Meet all requirements for consistent order fulfillment. Work to become a trusted partner to retailers, not just a supplier. With the right foundation, selling wholesale can be extremely rewarding and may lead to placement in more and more store locations across the country. Just take time to walk before running when starting out in wholesale.
