How to determine the wholesale price of your product? How to start your wholesale business? What is the most important thing to know when it comes to selling your products to retail stores?
Most of the articles on the internet are dedicated to wholesalers of all sizes (including large companies), so today we want to dedicate some advice to those wholesalers who are just starting out.
Keep reading this practical guide to understand how to wholesale and how to sell your product to retail stores from A to Z.
Assign the right price
This is usually the most complex part of the process. Products are usually sold 2.5 times above their production costs. This wholesale price is usually half of what the end customer pays, as the retailer is supposed to double the price of the product to end customers.
Many MercadoLibre wholesalers often offer a "suggested retail price," which ensures that you are offering a price that makes sense to you, the retailer, and the customer.
Take a good look at your production expenses, which include the cost of freight, marketing and other general costs. You may be interested in applying a minimum order rule to achieve your sales goals. This means that wholesale buyers must purchase a minimum quantity of product when placing an order.
Find stores to sell your product to
Research, research and research.
You need to know who your target customer is, where they buy, which stores stock competitive products, where are you thinking of selling ...
The best way to answer these questions is to go to the stores. Observe your competitors and compare their packaging, the space required on the shelves, and how your product complements the existing assortment in the store.
Understand how retailers will buy from you
Every industry and individual retailer is different, but keep in mind that each store may have different purchasing strategies.
In small stores, you may deal directly with the store owner. However, in a chain store, you may have to work with a dedicated shopper.
Another aspect to consider is the expectations of your customers. Almost all successful wholesale suppliers are investing in ready-made technologies to replace manual ordering processes that make it easier for buyers to do business with them.
Remember taxes
When you wholesale, you do not charge sales tax on the order, as it is the retailer who will tax the customer with each purchase.
However, it is crucial to obtain tax identification documentation from your retail buyers.
Each state has its own tax laws, but as a general rule: keep a copy of reseller licenses with your retailer and sell only to those who own them.
Stand out from your competitors
In a hyper-connected world, the network always gives you an advantage that you can take advantage of.
Customer and buyer testimonials can be your great allies. If you're just getting started and haven't gotten a review yet, you can offer free samples in exchange for their reviews. Reviews are one of the most reliable sources to go out of business in such a competitive market.
Another positive option is having your product appear in the press. This is an unbeatable way of promoting yourself as a highly reputable brand, which can be very useful for stores with strict buying patterns.
Consider marketing to end consumers
Perhaps you think that because you are a wholesaler that sells to wholesale stores you no longer need to invest in marketing for final consumers. This is usually a mistake many beginners make.
Keep in mind that retailers buy products that they believe will sell to end consumers, so it is possible that when you build your brand and market your product directly to end consumers you will gain a huge advantage over your consumers.
Prepare for rejection
Part of learning is learning from rejection.
Your product may not fit all the retailers you are trying to sell it to. It is logical. And it may take some time before you get your first big sale.
Reasons for rejection can be varied - the retailer may be heading on a different trajectory, may be overstocked, or may not want to add new lines at this time.
Persevere in the face of these rejections and assume that you are part of the process of mastering wholesaling.
Align yourself with industry trends
The first sale can be exciting, but that is only the beginning and not the end. Stay abreast of changes in the sector.
To do this, you need to connect to the industry and understand your competition. Get opinions on similar products, attend trade shows, conventions, conferences and seminars.
Staying current is essential if you want to gain a competitive advantage, while at the same time empowering your coercive creativity.
Remember the following: staying up-to-date is synonymous with growth for your business.
