What is a wholesale business?
A wholesale business involves selling goods in large quantities to retailers or other businesses, rather than to individual consumers. This allows the retailer to purchase products at a lower cost per unit, enabling them to make a profit when selling the products to their own customers.
Understanding the (new) wholesale business model
In recent years, the wholesale business model has evolved to include online platforms and B2B ecommerce websites, making it easier for businesses to connect and transact with suppliers and buyers.
How to start a wholesale business online
1. Decide what wholesale items to sell
Research the market and identify popular products with high demand. Consider factors such as seasonality, trends, and target audience preferences.
2. Pick a supplier
Find reliable suppliers who offer competitive pricing, quality products, and reliable shipping. Consider attending trade shows or using online supplier directories to find potential partners.
3. Obtain wholesale licenses and permits
Make sure to comply with local regulations and obtain the necessary licenses and permits to legally operate your wholesale business.
4. Set a wholesale pricing strategy
MOQs
Determine the minimum order quantity (MOQ) that buyers must meet to qualify for wholesale pricing.
MSRPs
Set the Manufacturer’s Suggested Retail Price (MSRP) to give retailers a guideline for pricing the products to end consumers.
Setting payment terms
Establish clear payment terms, including credit options, discounts for early payments, and payment methods accepted.
5. Create a B2B ecommerce website with Shopify
Company profiles
Create detailed profiles of your wholesale business, including contact information, product offerings, and company background.
Catalogs
Create digital or print catalogs showcasing your wholesale products, including detailed descriptions, images, and pricing information.
Customer accounts
Implement a system for retailers to create accounts and place orders online, with features such as order tracking and reordering capabilities.
6. Market and sell your wholesale products
Use your website
Optimize your B2B ecommerce website for search engines and implement digital marketing strategies to attract potential buyers.
Join a wholesale marketplace
List your products on established wholesale marketplaces to reach a wider audience of potential buyers.
Attend trade shows
Participate in industry trade shows and events to network with retailers and showcase your products.
Use incentives to motivate buyers
Offer incentives such as volume discounts, free shipping, or promotional deals to encourage retailers to place larger orders.
Reach out to complementary brands with Shopify Collective
Collaborate with other Shopify retailers to cross-promote products and expand your reach.
7. Expand your team
As your wholesale business grows, consider hiring additional staff to manage operations, customer service, and sales.
Wholesale items to sell
Educational materials
Books, learning aids, and educational toys for children and students.
Home décor
Furniture, lighting, and decorative items for the home and office.
Clothing and accessories
Fashionable apparel, shoes, and accessories for men, women, and children.
Food
Non-perishable food items, snacks, and beverages for resale in grocery stores and specialty shops.
Purses and handbags
Fashionable handbags and purses in various styles and materials.
Kitchen materials
Cookware, utensils, and gadgets for cooking and food preparation.
Health and wellness
Nutritional supplements, personal care products, and fitness equipment.
Pet supplies
Pet food, toys, grooming products, and accessories for pet owners.
Party supplies
Balloons, decorations, and tableware for celebrations and events.
Is a wholesale business profitable?
1. Boost sales while spending less on marketing
By selling in bulk to retailers, you can generate higher sales volumes without the need for extensive marketing efforts to reach individual consumers.
2. Leverage other brands to sell your product
Partner with popular retail brands to distribute your products, leveraging their existing customer base and brand recognition.
3. Enter new markets with less risk
Expand into new geographic regions or target demographics by partnering with retailers who have established presences in those markets.
Start selling B2B with Shopify today
Utilize Shopify’s B2B ecommerce platform to create a professional, user-friendly wholesale website and streamline your operations.
Wholesale business FAQ
What are some benefits of wholesaling?
Wholesaling allows you to reach a wider market, benefit from higher sales volumes, and establish long-term relationships with retailers.
What kinds of businesses can be wholesaled?
Virtually any type of product can be wholesaled, from consumer goods and electronics to industrial supplies and raw materials.
What are the challenges of wholesaling?
Challenges include managing inventory, establishing reliable supply chains, and competing with other wholesale businesses in the market.
What is the difference between wholesale and retail?
Wholesaling involves selling products in large quantities to retailers, while retailing involves selling products directly to consumers in smaller quantities.
How can a small business start wholesaling?
Small businesses can start wholesaling by identifying a niche market, building relationships with suppliers, and creating a professional online presence to attract retailers.