Wholesaling comes with several advantages for retailers who are looking to expand the total market reach of their products. Wholesale offers the opportunity to allow other businesses to market your products for you, along with the chance to grow revenue through higher volume sales. Although beneficial, not every team may be ready to expand into the wholesale market. Before taking the plunge, here are 10 tips for every retailer to consider before they expand into wholesale:
Team composition
Teams powering retail brands are often geared towards serving the B2C market. It’s worth first evaluating your team composition to ensure you have the right internal champions to execute on a push into the B2B wholesale market. Does this align with your company’s strategic objectives? Do you have a dedicated sales or business development team to oversee outreach and accounts management, or will this responsibility be championed by another internal team?
Thinking through how an expansion into wholesale might impact the organization operationally is critical to starting with a strong foundation.
Understand the market
Just because you can enter into wholesale in your vertical doesn’t mean there is a clear and scalable opportunity in the market. Understanding your company and product’s unique differentiators that set you apart from other players in the space is a must. What story are you trying to tell with your products and who are your target end consumers? A firm understanding on your market position will help drive clarity on which retailer profiles are worth pursuing.
Pricing strategy
It’s important to understand the differences in pricing strategy between B2C and B2B. While B2C typically utilized fixed consumer prices, B2B buyers are buying as part of their job and often expect customer-specific prices. There are a number of strategies to consider when it comes to wholesale pricing, but it’s important to ensure your pricing is competitive enough to allow retailers to make a healthy margin and cover their overhead of running a storefront.
Consider how volume discounts might affect your pricing methodology as well; these can provide a strong incentive to increase order size based on the retailer’s buying needs. Be careful when lowering prices too much as a mechanism to move more product – this can spur a ‘race to the bottom’ that is difficult to recover from once unrealistic expectations on the value of your products have been set with retailers.
UPCs & Barcodes
For most B2B buyers, having UPCs and barcodes for your products are requisite to being retail-ready. Barcodes are often one of the most important things retailers need to bring you into their stores. They identify products throughout the supply chain and help with inventory management. Smaller retailers or independent buyers may be able to accept alternative SKU solutions, but if you’re pursuing midsize or larger brick & mortar businesses then UPCs are a must.
The best place to get barcodes is directly from the official GS1 registry to ensure they are unique. Fair warning that buying bulk secondhand UPCs through other means can spell trouble down the road if not monitored closely.
Catalog and Supporting Collateral
In order for B2B buyers to make an informed decision, it is essential to create effective marketing collateral. Along with your product catalog and line sheet, a one-page sell sheet with a quick snapshot of what your product(s) are and do can help push initial conversations along. Buyers are too busy to try and decipher new product information so less is more when it comes to marketing collateral. In addition to product information, ensure your collateral reinforces telling your brand story and unique selling propositions; you really can’t emphasize these enough when trying to get your brand to stick in the minds of potential buyers!
Leveraging Sales Rep Groups or External Contractors
What channels do you intend on using to penetrate the B2B market? If you’re on a tight budget and the prospect of building out a dedicated sales team isn’t an option you might consider leveraging independent sales representatives – sometimes called manufacturers representatives – who sell products to retailers on behalf of your company in exchange for a commission. This approach can offer a low investment path to test new markets and can compliment your own direct selling efforts. Note, you should also be prepared to provide your reps with all the tools and materials they need to succeed (see ‘Support collateral’ section above).
Prepackaged Solutions
For smaller retailers or those new to carrying products in your category, offering prepackaged ‘retailer starter kits’ or bundled packages can help reduce the complexity of starting with your products. This gives buyers or independent owners a turn-key way to get started; think tabletop box set or flooring standing unit. For those in the fashion or accessories verticals this is also a great way to demonstrate product breadth and variety in your collection with mixed styles or colors.
Display Solutions
Will you be able to offer supporting display solutions to retailers so your products are showcased in the best light? Translating open store space to high performing zones of products with quick turnover is a constant consideration for buyers, so arming them with the tools necessary to display your products properly is key. Display applications will vary based on the retailer profile but consider these additional opportunities to again reinforce your brand and tell your story. One size doesn’t fit all either so offer a spectrum of solutions based on needs and footprint.
Packaging & Presentation
Have you considered that important moment when end consumers first see and get their hands on your product? That’s where great packaging and presentation comes in. In fact, packaging is almost as important as the product itself. Consider your product attributes (size, durability, shelf-life) and who’s buying your product before developing a packaging solution. You don’t need to be a CPG expert to craft successful packaging; careful consideration behind design and messaging can go a long way.
Pitching to Retailers
Getting noticed by B2B buyers is a very different sales and marketing challenge than B2C that requires a different set of core competencies. Knowing how to talk to buyers and why a buyer may say yes to one product over another can help you refine your pitch and secure that first meeting.
Buyers need information on why your product is better than other solutions or what they’re currently carrying, and how your product will make the store money. Don’t lead these conversations with the features and benefits of your product – it’s imperative you demonstrate a strong understanding of their store and clientele’s needs/tastes and how you can help serve them. Once you’ve won a few accounts, leaning on your success stories of how many units you’ve sold so far and which retailers are currently selling your product can add compelling social proof as well.
Jon Corwin is Director of Growth at Readers.com