When it comes to growing your business, selling your products to wholesale customers is one of the best ways to expand your customer base and bring on board some serious revenue.
But how do you know when it is time to sell wholesale?
And how do you know if you’re even able to sell your products at wholesale?
Run through the following three questions like a checklist and you might just find out the answer for your business.
Do You Have Existing Customers Who Might Buy Wholesale?
If you’ve been trading for a while already, it could be possible that there are already some customers who are spending enough to be considered a wholesale customer.
They might even be selling your products on to their customers and you’d never know!
There are a few ways you can isolate these people:
- Who re-orders their products quite often?
- Who is placing the biggest orders?
- Who appears to be a company?
If you find customers at the juxtaposition of those points then it’s likely you’ve come across someone who could be an ideal wholesale customer.
Another way you can frame this question to your existing customer base is by running a survey. Wholesale customers will likely be among your most responsive.
Ask questions like:
- “Do you run a company?”
- “Would you be interested in buying our products in larger quantities, like a bulk pack?”
- “Do you often buy products in big quantities to save money?”
Are Your Products Priced Appropriately?
One of the requisites of selling to wholesale customers is that you have priced your products with enough product margin.
Generally speaking, most people will tell you that you should be using a formula like:
Materials Cost + (Labour Invested x How Much You Value Time) + Other Overheads (Rent, Fixed Costs, Electricity, etc) + Profit Margin = Wholesale Price
But in reality, most retailers use a formula more like:
Retail Price x 0.6 = Wholesale Price (40% off retail)
Instead, we recommend re-analysing your market and choosing a value-based approach.
Here’s a great guide on how to price your products for wholesale.
Can I Buy or Manufacture My Products Fast Enough or In Big Enough Quantities?
If you received an order for 1,000 units of your product, could you deliver it in a week?
What about 10,000 units?
There are always limits to your manufacturing process, but ensuring you have the ability to scale it up and down and to handle wholesale quantities is something you need to figure out so that you’re not caught off guard if/when that big order comes in.
If you procure your products from a manufacturer or you buy them from a supplier yourself then what are their capacities like?
Knowing the answer to these questions is important as it can determine how big your wholesale accounts can get before you have to start changing the way you create and deliver your product.
Growth is great, but ensuring you have the ability to fulfill orders is important as well.
Go for it!
If you’re umming and ahhing about whether to try your hand at finding some wholesale customers then just go for it!
Even if you don’t have all the little bits and pieces sorted out you can always adjust course along the way.
If you’re running an e-commerce store using WooCommerce then definitely give our wholesale pricing extension a try. It will save you loads of time and make selling your products to wholesalers via your store much easier.