Developing a Successful Wholesale Strategy to Expand Your Sales

You’re looking to expand your ecommerce store’s reach, grow revenue, and achieve a new level of success. You’ve worked hard to build a thriving online business, but what if there’s a way to unlock even greater potential? That’s where wholesale strategy comes in, a game-changer for high-volume ecommerce stores.

A solid wholesale strategy means adding a powerful engine to your growth journey. This means tapping into a vast network of retailers, distributors, and other wholesale customers eager to offer your products to their audience. We’ll guide you through a practical and proven wholesale strategy that can help you take your ecommerce store to the next level.

Why Consider a Wholesale Strategy?

This is a valid question. You’ve invested your time and energy to establish a direct-to-consumer (D2C) sales channel, and it’s doing well. But relying solely on individual customer orders can limit your growth potential. Wholesale opens the doors to larger orders, often at higher volumes than a single customer would typically purchase.

Think of it this way: one wholesale deal with a retailer could be equal to hundreds of individual customer purchases. This leads to a significant boost in revenue. Additionally, a strong wholesale marketing strategy brings your brand to the forefront.

When your products are featured on the shelves of various retailers or highlighted in another company’s marketing, your brand visibility gets a significant boost. This heightened exposure makes your brand more recognizable and trustworthy, ultimately attracting new customers to your D2C channels as well.

Overcoming The Mindset Barrier

Let’s be real: the idea of transitioning to or incorporating a wholesale strategy can seem like a daunting marketing plan, especially if you’ve solely focused on direct-to-consumer sales. This can lead to a fear of the unknown. You may have questions like: will dealing with larger orders and business clients be too much to handle? What if I lose control over branding and customer experience?

It’s natural to have these doubts; however, shifting your mindset to view wholesale as a collaborative opportunity can make a big difference. Think of retailers as partners, not just buyers. You are both invested in getting your products in the hands of consumers and reaping mutual benefits.

Building Your Wholesale Strategy Foundation

Successfully incorporating wholesale strategies involves some planning. Here’s what it entails:

1. Understanding Your Target Wholesale Market:

It’s easy to assume that all retailers or distributors are created equal when venturing into wholesale, but that’s a recipe for disaster. Just as you carefully defined your ideal customer for your D2C business, a laser focus is crucial in the world of wholesale. You want to ensure you are targeting the right wholesale customer.

To effectively target your desired wholesale customer and negotiate favorable deals, you’ll need to thoroughly understand how to effectively present your business requirements.

2. Crafting an Irresistible Value Proposition

Picture this: you’re at a trade show surrounded by businesses, all vying for the same retailers’ attention. In a sea of similar products, what makes your brand stand out? The answer is a crystal-clear, compelling value proposition—the potent “why” behind a retailer’s decision to choose your products over a competitor.

A study by Bain & Company highlights the danger of misaligned perceptions; while 80% of companies believe they deliver exceptional experiences, only 8% of customers share this view. This demonstrates the crucial need for wholesalers to accurately and compellingly convey their value proposition to stand out and succeed in this competitive landscape.

3. Setting a Strategic Pricing Structure

Pricing in wholesale is a delicate dance, very different from setting retail prices. Retailers need to make a profit, and you, as the wholesaler, need to maintain healthy margins. Finding that sweet spot can be the difference between forging profitable partnerships and losing money. Here’s how to tackle wholesale pricing effectively:

Pricing Strategy	Description
Cost-Plus Pricing:	The most straightforward method: calculate your per-unit production cost, factor in overhead costs, then add your desired markup percentage. For example, if a product costs $10 to produce, and your desired markup is 50%, the wholesale price would be $15.
Competitive Pricing:	Thoroughly research what your competitors charge for similar products. You’ll need to find a balance; pricing too high might deter buyers, while setting prices significantly lower could erode your profit margins or make you appear less premium.
Value-Based Pricing:	If your product offers unique features, higher quality, or addresses a specific need better than the competition, consider value-based pricing. Highlight these advantages in your communication to justify a premium price point. Remember, perception plays a huge role: effectively communicate the extra value you offer to command higher prices.

4. Choosing Your Distribution Channels

Now it’s time to get your products in front of buyers; this requires carefully selecting the right distribution channels. Online wholesale marketplaces have gained tremendous traction, and platforms like Faire and Tundra have become go-to destinations for retailers to discover new and exciting products to stock. Building strong, direct relationships with retailers is crucial for a lasting wholesale business.

Operational Excellence: Making Wholesale Work

A smooth wholesale strategy requires efficient back-end processes: consider order fulfillment, inventory management, and timely communication—factors just as important as a well-crafted sales pitch.

1. Streamlining Order Fulfillment and Inventory

In the D2C world, an order delay may lead to a frustrated customer. In wholesale, it can mean damaging your reputation with a valuable retailer—especially when dealing with larger order volumes and multiple shipping destinations.

Prioritize order accuracy by using an inventory management system (there are countless solutions tailored to eCommerce businesses). Accurate stock levels ensure you can confidently fulfill wholesale orders without delays or errors.

2. Building Strong Communication Channels

Strong communication channels are the foundation of successful wholesale partnerships. Regularly inform your retailers about new product launches, provide them with marketing materials (professional product photos, descriptions that resonate with their target market, etc.), and be readily available to answer any questions.

Transparency and trustworthiness are paramount. According to a 2021 Edelman Trust Barometer study focused on the B2B landscape, a staggering 81% of buyers emphasize trust as a key deciding factor before committing to a purchase. Build genuine, trusting relationships with transparent and reliable communication from the very first interaction. Proactively address any concerns to build strong and enduring wholesale relationships.

3. Don’t Underestimate the Power of Packaging

It might seem tempting to view packaging as a purely functional aspect, especially when larger volumes are being shipped out. But overlooking this vital detail would be a costly mistake because packaging is often the first physical interaction a retailer has with your products, making it a critical element of brand perception and influencing purchase decisions.

High-quality packaging silently communicates the value you place on both the product and your partnership with the retailer. This could mean opting for sturdy, well-designed boxes that protect your goods during transit, incorporating eco-friendly materials aligning with today’s conscious consumerism trends, or even adding a simple ‘Thank You’ note to acknowledge and appreciate their business.

FAQs about wholesale strategy

What is a wholesale approach?

A wholesale approach focuses on selling your products in bulk to other businesses, like retailers or distributors, at a discounted price. They then resell these products to their own customers, marking up the price to make a profit. Essentially, instead of selling directly to individual consumers, you’re selling to businesses that will act as intermediaries.

What is a wholesale pricing strategy?

It means figuring out how to price your products when you sell in bulk to businesses. Since retailers and distributors buy in larger quantities, you can’t charge the same prices as you would to single customers; you’ll need to factor in their markup and their own need to make a profit. A few common approaches include: 1. Cost-Plus Pricing: adding a markup to your production cost, 2. Competitive Pricing: Analyzing competitor’s pricing, and 3. Value-Based Pricing: Highlighting unique product values to justify higher prices. The best strategy depends on your product, market, and overall business goals.

How to wholesale effectively?

Effective wholesaling hinges on several key elements. Firstly, identify the right wholesale market: not every retailer aligns with your brand. Once identified, create a compelling value proposition outlining your advantages over competitors. Then, strike a pricing strategy—this should ensure profitability for you and the retailer. Next, conquer logistics: ensure a smooth process for order fulfillment, potentially using an inventory management system. Lastly, open those communication channels: frequent updates, marketing assistance, and prompt responses build enduring partnerships.

What are the three types of wholesale?

There are actually more than three, but for simplicity, we can stick with Merchant, Distributor, and Dropshipping. Here’s a breakdown: 1. Merchant Wholesalers: They buy goods in bulk directly from manufacturers, typically at a lower cost per unit, then store these goods in their own warehouses before selling them in smaller quantities to retailers and sometimes other businesses. They generally set their own selling prices. 2. Distributors: Think of them as intermediaries forming the crucial link between manufacturers and retailers, often specializing in specific product categories. They work closely with manufacturers to promote their goods, typically handling a large territory or even national distribution. 3. Dropshipping: This type differs significantly from the traditional wholesaler. These act as middlemen. Essentially, a retailer partners with a dropshipping wholesaler, taking orders but without physically stocking any goods. They earn a commission on each sale but are usually hands-off when it comes to fulfillment and shipping. This approach lets retailers offer a wider array of products without significant upfront inventory investment.

Checkout Champ To Take Your Wholesale Business to the Next Level 

As your online business flourishes, it is essential to make strategic choices to ensure that you not only keep your brand alive in a highly competitive space but grow and become a leader. Taking advantage of a comprehensive wholesale strategy offers your ecommerce business more than just an additional revenue stream—it offers your brand the chance to truly blossom. Remember, the path to becoming a recognized name requires vision, action, and a touch of boldness. Embrace these changes, make smart choices, and celebrate every milestone along the way.

Checkout Champ specializes in store that do over $50k per month in sales. Why not take it to the next level with wholesale. You can create customized shopping experiences for your wholesale customers, build funnels, and even build lead nurturing campaigns with our built-in CRM. Book a demo with the Checkout Champ team today to get started.