How does wholesale work? If you want to start to wholesale, you might start to google, "how to sell wholesale", maybe it's how you found this blog. But before you consider how to sell wholesale, there are some basics you need to do first. In this post, I will tell you the steps you need to take to start selling your products to retail buyers.
1. Get your products retail ready
This is a step that I see small business owners skip all the time. And whenever I'm asked, how to start to wholesale? It's alway's one of the first thing I recommend that you consider before you approach any retailers.
When you sell your products through your own website, at markets and craft fairs, you can take time to package your products just right to make sure they arrive with the end customer just the way you like them. When you sell to retailers, you do not have this benefit. Make sure that you have retail-ready packaging that helps your product stand out and stay protected, as well as making it clear what your product is even if it’s in packaging.
Consider how your products will be displayed in-store and ensure that the packaging is suitable to withstand lots of handling, and includes all legal warning text and ingredients/nutritional information etc.
2. Review your prices when you get started with wholesale
Your prices will drive your business forward and allow you to develop new products and invest in your business, so make sure that you make money on each sale and that you take all your costs into account.
When setting your prices, it’s also important to ensure that you are priced right so potential retailers can afford to invest in your range. Retailers will expect a 2.2-2.5 markup; this equals a 55-60% discount off the RRP (recommended retail price) price.
One of the most common challenges small business owners encounter is not getting their prices right. There are lots of terms and expectations thrown around, and a lot of small business owners take their RRP and divide it in half, thinking that this gives the retailers a 50% margin.
Retailers are likely to be VAT registered, so this would mean an actual margin of around 40%, and it’s often too low for a retailer to invest in your range, and you might find it more challenging to get stockists on-board. Of course, some small independent boutiques will be fine with this, but if you would like to give yourself a fair chance of getting that yes, then stretching to a 2.2-2.5 mark-up will increase your chances greatly.
3. Create your wholesale line sheet or catalogue
A line sheet is a scaled-back version of your catalogue and can be created in Word, PowerPoint, any commonly used design software or an online tool such as Canva. To help you, I’ve created a template that you are free to use on Canva. You can find it here.
4. Identify your ideal stockist
Just as knowing your ideal customer, it is important to get to know your ideal stockist. To do this, you need to go back to your ideal customer and think about where he or she shops, and where they might come across your product. Write down stores that your ideal customer would shop at and have a look at other brands like yours that they would buy.
If you have a loyal and engaged following on social media, ask your audience for their favourite independent shops.
Once you identified where your customer shops and what brands he or she likes, have a look at those competitors, perhaps they will have a stockist list on their website or maybe they feature some of their stockists on Instagram.
Keep all your leads in one notebook, excel file or an online database such as Hubspot. For more ideas of how to find new leads have a look on my blog here.
5. Create your email pitch template
Now it’s time to put together a template for your pitch email. When contacting buyers it’s important that you tailor each email to the business you are introducing your brand to, but to save time, it’s a good idea to create a template. You can save this as a draft email or in a Word document.
Below are a few tips on writing your email pitch, and you can find a more in-depth blog post here.
Keep the subject line simple and to the point.
Address the buyer by name where you can.
Make sure to make it clear what you sell in the first or second paragraph.
Include a few low-resolution images and link to your line-sheet to avoid getting stuck in the buyer’s junk folder.
If you’re not confident that your email is as good as it can be.
6. Send your wholesale email pitch to some retail buyers
Use your template and tweak it to make it personal to the buyer you are contacting, for example, if you have been following the store for a while over on Instagram point it out, or perhaps you noticed that they are bringing on-board more and more sustainable independent brands and that’s why you’re getting in touch. Make sure to keep it relevant and to the point.
7. Follow up to make a sale
The sale often doesn’t come until later, it might take several follow-ups both by email or phone before you hear back, and sometimes you won’t hear back at all. Don’t give up, sometimes it’s all about timing, and buyers are busy people, and they sometimes receive hundreds of emails all saying similar things, so continue to do your research and find excuses to continue to get back in touch until they either say no or buy from you.
I hope this has given you an overview of the steps you need to take to start to wholesale. If you would like more, sign-up and watch my free Masterclass here.