The Beginner's Guide To Wholesale Your Products

Wholesale can be an excellent additional sales channel for your product-based business.

The company is the world’s best Watch Display Boxes Wholesale supplier. We are your one-stop shop for all needs. Our staff are highly-specialized and will help you find the product you need.

If you dream of seeing your products on the shelves of your local gift shop, or favourite department store.

Getting started with wholesale is how you make it a reality.

My mission is to make wholesale simple and accessible for everyone. Why? Because it really can be a game changer when it comes to building a sustainable business with a consistent income.

And wholesale really isn’t the enigma it’s been made out to be.

You might want to bookmark this post and keep coming back to it, consider this an introduction to everything you need to know about wholesale.

What is wholesale?

Wholesale is selling your products in volume to retailers who will sell your products on to consumers through their retail store at a profit.

Within this definition there are also different types of wholesale agreements, let’s break it down:

Firm sale

The most popular type of wholesale. Once a retailer buys the stock from you it is theirs and they cannot return it unless it’s faulty.

Sale or return

A Sale or Return wholesale agreement is where a retailer places an order; you agree on the amount of stock they are taking, and they pay you in full but if it’s not sold within a set period of time it can be returned and you issue a credit note for stock that comes back in a resalable condition.

Commission

Don’t confuse this with sale or return! Commission sales mean that you place your items into a store and when they sell something, they pay you minus their commission. (Make sure you define terms of agreement for commission sales as you will most likely be liable for any damages etc.)

Why wholesale?

Wholesale can help you…

• Bring in extra revenue. It's creating a whole new untapped sales channel for your business that can complement what you are already doing.

• Increase your credibility. By having your products stocked in shops, and with well-known brands you build trust with your audience through that brand association.

• Increased volumes. This is not only good for sales but also helps when you negotiate with suppliers and couriers. It can also open up more suppliers to you that previously wasn't accessible.

• Paid for marketing. By having your product stocked in shops, you’re getting more eyes on your brand.

• Service your customers better. Not everyone wants to buy everything online. Sometimes you want to try things on, touch it, smell it, even taste it before you buy. Being stocked in brick and mortar stores gives your customers a chance to experience your products before they buy.

• Get more eyes on your brand.

• Get more customers discovering your brand who may not have before.

• It’s paid for marketing as you are taking advantage of the retailer's trusted customer base.

• Once you can buy in bigger volumes your margins get better = more money!

• New sales channel, it could help balance out your year.

• Buyers are knowledgeable and can give you great insights and ideas which may help you with your direct customers as well.

Is wholesale for you?

I often hear from business owners who say they want to get started with wholesale but they’re not ready yet, it’s not the right time, or they don’t have the right kind of business BUT a lot of this comes down to common wholesale myths that hold brilliant business owners back from getting started.

In a nutshell, wholesale is right for you if…

• You want to grow your sales and brand awareness

• Wholesale is part of your long-term strategy & goals for building and growing your business and income

• You can set aside time each week to be actively working on your sales and communicating with retailers

• You have a product to sell that meets all legal requirements, and demand for your product has already been proven through the sales you’ve already made online

• You can make enough products to wholesale, at a consistent quality.

Common wholesale myths that might be holding you back from starting to wholesale

My business isn’t big enough for wholesale

You don’t have to have a huge business with a big team to get started with wholesale. I work with lots of business owners who started out by telling me they didn’t think they were ready. There’s never going to be a perfect time - so start today!

My product range isn’t big enough for wholesale

You don’t need a huge range to start to wholesale. You can start with just one or two products you do really well.

My product isn’t ready yet (even though you’ve been selling it for months, or maybe even years)

Ahhh, hello perfectionism my old friend! I hear this so often. If your product has proven to sell, even if it’s just been out there in the world, selling for a few months - it’s ready to wholesale.

I won’t make any money on wholesale

This might be true for where your pricing is right now, but that doesn’t mean wholesale isn’t for you. It simply means it’s time to reevaluate your pricing and get it right so that your business is profitable at wholesale as well as for direct sales.

I won’t be able to meet retailer's demands or fulfil big orders

You get to set your limits on the volumes that retailers can order, so you never get stressed about not being able to fulfil a huge order. You set your order volumes at a level that works for you.

Pssst: Want to get started with wholesale ASAP? Watch my free masterclass now - click below to get immediate access.

Are your products ready for wholesale?

Here are a few considerations to help you figure out if your business is ready for wholesale.

Are your products shelf-ready?

Before you approach any retailers it’s important that you’re confident that your products are shelf-ready. Imagine your range on the shelves of your ideal stockist:

• Where are they displayed?

• How are they displayed? Do they hang or stack, sit on a product shelf, or in a display cabinet?

• Are they displayed in or out of the product packaging?

• What other products are they displayed with?

• Do your products stand out?

• How do your prices compare?

• Do you have enough products that can form part of one range that will look great being displayed together in a store?

• Do you have your brand name on all the product packaging and the products themselves?

If you know the answers to all these questions then you’re off to a great start but if you’re unsure about any of them don’t feel defeated, plan how you can make your products ready before you start to prepare your sales material and start approaching retailers.

Can you scale your product production?

I think one of the biggest myths with wholesale is that you have to have a really big range before you can start or that you have to have loads of experience in the business. This is not true!

For example, if you are making everything yourself then you should start selling with other small business owners, start building relationships and find out where the demand is and what kind of volumes you can expect from them.

Not every store is going to ask for 100 units at a time, so start small and make a plan to scale in the future.

Having said that, when you start to wholesale you will be selling larger quantities of your products - that's the whole point!

So, have you considered how you can scale your production? Would you need to get someone to help you? How much time would this take?

Stockists understand that small brands are often a one-man/woman team but an empty shop is never a good look so they need to feel confident that you will be a reliable supplier with reasonable lead-times so they can place re-orders.

Before you start it’s difficult to know how much stock you will need. You will need to make a few assumptions and work out how you would get that amount of stock produced. Having a plan is important to keep your stockists happy and supportive of your brand.

Wholesale sales material and product photography

Before you start contacting retailers you will need to have your sales pack ready. This means either a catalogue or a line sheet. This will be your sales tool and at the most basic line sheet should include product images, wholesale price, recommended retail price, any pack sizes, your company details, how to order, and all your terms (for example. Minimum order £150 ex vat with £10 carriage or £300 ex vat carriage paid, first-order proforma and thereafter we offer 30 days credit).

You will need good product photography, even the smallest independent stores have online stores nowadays and most of them post on social media.

Consider having your photography done professionally and keeping a dropbox or google drive that you can share with your stockists. Include some lifestyle photos and chances are they will use them for banners on their websites and for their social media.

Cash flow and covering the upfront costs

When you start out, your new stockists will often be happy to pay for their first order on proforma, this means they will pay you before you ship their order.

Some suppliers ask for the first 3 orders to be paid proforma and some offer credit right away. After the first few orders, all stockists will generally expect 30 days credit. Larger retailers expect credit from day one, usually 30 days or more.

I wish I could say that they all will pay you on time without any chasing, but this is not always the case.

Most retailers will pay you around the right time but there will always be a few that will keep putting off payment. You will need to cover all the upfront costs of having your products made until you get paid, so you need to know what you can afford before you start targeting any retailers.

My advice, unless you have a very healthy cash flow is to start slow and small.

Target independent shops first, focus on making sure they are happy and that they re-order. Once you established this you can take a bit more risk and go after more stockists and larger retailers if that’s your goal.

Pricing your products for wholesale

I often see magic wholesale pricing formulas being spread far and wide, with no context or research and I don’t believe that these kinds of formulas say anything about your brand or customer.

I think instead of using a one fits all formula, it's much better to price your products for wholesale based on market research.

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This is your chance to really get to know your customer. You need to find out what they are willing to spend because some customers may be looking for something organic and handmade but if your prices are too cheap, they may not believe in your product.

Make sure that your products are priced in the range that they expect to pay for your item.

There's definitely something to being too cheap as well as being too expensive.

Once you’ve set your prices this doesn’t mean you can’t change them further down the line, and I always recommend that once you’ve started to wholesale that you do a full pricing review. It’s ok to put your prices up.

If you’ve been researching wholesale or have been approached by a retailer you have probably come across many different terms, so let’s look at what they mean:

Price Margin

Margin is what the retailer gets to keep (sometimes after paying VAT to HMRC)

Discount

This refers to the percentage the retailer gets off the RRP (recommended retail price).

Markup

Markup is how many times you have to multiply the cost price with to get the recommended retail price or the selling price.

What pricing margins do retailers expect for wholesale?

The standard mark-up for home and gifts products are 60% or x 2.5. Some start out a little lower than this but any lower than 50% will make it a challenge to start to wholesale.

This means that if your recommended selling price is £20, your wholesale price for this item might be £8.00. This £8 needs to cover:

• All your direct costs - materials to make the product.

• Indirect costs - all the costs that allow you to do what you do, website hosting, studio space, etc.

• Labour costs - if you make your product you need to decide how much you need to be paying yourself.

• Profit - this is what will allow you to re-invest in your business and what will drive your business forward. It will allow you to spend on marketing, developing more products, or exhibit at trade shows so please do not skip this.

Of course, there are exceptions to the 2.5 markup rule and certain categories will come at a much lower margin and certain categories will come at a much higher margin. When you deal with larger retailers, it tends to be on the higher side.

5 steps to prepare to wholesale your products

1: Get your products wholesale ready

Think about how your products will be displayed in a store, how can you show them off to their full potential?

And then the practical bit - do they meet all legal requirements?

Finally, think about what volumes you can sell your products in while keeping the quality consistent. Think about how you’d like retailers to order from you, how you’ll fulfil those orders and deliver them to stores.

2: Get clear on who your customer is

Get clear on who you create your products for. What are their needs and wants? And most importantly WHERE do they shop (this will help you figure out which retailers to pitch your products to).

You’ll want to do some market research here to help you figure out where your products sit in the market. Who else is selling similar products? How do your products differ, what’s unique about them?

3: Price your products for wholesale profit

Wholesale pricing is often the area business owners are nervous about with wholesale. But with some simple maths, you can easily figure out where you need to be pricing your products to make a profit at wholesale.

What tends to get in the way here is our own money mindset - but there is a customer out there for every price point.

Rather than pricing your products based on a set formula, I encourage my students to use value-led pricing. This means thinking about the value your customer gets from your product, rather than basing your pricing off the cost of raw materials, and time that goes into creating each one.

4: Create your wholesale line sheet or wholesale catalogue

Now you can start pulling all of this groundwork into your line sheet or catalogue.

This is where you introduce retailers to your brand, show off all of your products (with beautiful, clear images), share all of your product details (including pricing and RRPs) and lay out how retailers can order from you.

Your line sheet is there to set a great impression of your brand with retailers and make it easy for them to order from you.

5: Create your wholesale Terms and Conditions

T’s&C’s are important with any type of sales and one of the first things that retailers will ask for when considering buying from you (I'm not talking about your lengthy legal terms and conditions by the way!).

Your wholesale terms and conditions are things such:

Minimum order

How much a retailer needs to spend with you each time they place an order with you.

Carriage paid

Essentially means free shipping. So how much do they have to spend to get the carriage paid?

Payment terms

Do they need to pay the proforma invoice upfront or will you give them a credit account?

Pack sizes

How many products they have to buy of the same product to order from you. So, for example, if you sell candles and they come in a box of six, the retailer will have to buy them in boxes of 6.

Lead time

How long will you take to deliver after they’ve paid you if they are on proforma, or how long it will take to send their order if they have a credit account with you.

Finally... Get selling your products to retail buyers!

You’ve got all of the foundations in place - now it’s time to start approaching retailers and get selling.

Whatever you do, don’t let perfectionism, or procrastination hold you back from getting started with the selling bit. I know it’s the bit where that fear of rejection can spring up, but this is the essential part to making wholesale that profitable income driver for your business.

So, it’s time to shortlist your first 10 retailers, put together a pitch email, and start reaching out to your dream retailers.

Where to find retailer buyers

So, you’ve got your pitch and sales material ready, but who are you going to approach?

Personally, I think the thing that is most unique about where we are right now is that through Instagram and social media, we have direct access to a lot of independent shop owners, something we didn't have before to the same extent without being on the phone or constantly emailing people.

So, find your ideal stockists on Instagram. Search for things like hashtags such as #myshoplife and find out the buyer’s name and email address.

Another way is to find stockists is to visit your local towns, ask friends and family or check out your competitors’ brands that you would sit nicely next to and complement (not people that you would want to replace).

Pitching to retailers to wholesale your products

The most common way to reach out to shops is by email. My number one tip for emailing potential stockists is to keep it personal.

Let your passion shine through every single email and show them that you are providing a much more personal service, perhaps a slightly more unique product, or it might be a bit more thoughtfully made up.

Don't forget to mention what you sell and make sure you include everything a buyer might need to know to buy from you.

Buyers are very busy people, and they get a lot of emails from lots of different suppliers so make sure that you save them time by including everything they might need to know.

This includes key information about what you sell, what the products retail for and images (embed them so they can make a decision on whether to open your sales material attachments).

One thing I want you to remember is that a sale rarely happens on your first introduction and this is why I’m a huge advocate for dedicating time to wholesale every week so you can follow up and keep buyers in the loop.

I don’t mean stalk them and email them every week, but I mean make sure you're keeping them constantly updated with what you're doing, new products that might be a good fit for them and make it clear on why they need your products in your store. How are you going to make them money?

Sticking with it and making your wholesale happen

Starting something new can be scary, but also sooooo worth it!

Along the way to setting up your wholesale, you will at some stage stress about getting your pricing right, worry about getting rejected by retailers, or just find the process difficult - as all things are the first time we do them. So a last pep talk on staying the course while you’re getting your wholesale up and running, and getting your first few stockists on board.

Break it down! I’ve broken down the first few steps to getting started with wholesale above, so you don’t need to feel overwhelmed by trying to do everything at once. Take it one step at a time, don’t be tempted to multitask, and you’ll get there!

Ready to get started but want a paint by numbers guide to wholesale? Learn more about my 4-week fast-start course START TO WHOLESALE.

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