A Wholesale Prep Guide for product-based businesses
To setup your product-based business for wholesale success, you’ll need to plan, prepare, & consider many things.
Wholesaling product is a great way to increase volume of product you’re selling and expand your reach beyond your own customer base. This can help increase profits and help with brand awareness.
However, far too often, small product-based businesses jump into wholesale without having strong pillars in place and end up fumbling their way through. Potentially missing sales or tarnishing good retailer relationships due to inexperience.
I know first hand because that’s how I started!
So, to help you avoid wasteful mistakes and present yourself and brand professionally, I’ve put together a wholesale preparation guide for product-based businesses which will outline what you need to know BEFORE jumping into wholesale.
Due to many variables in the product-based space I cannot guarantee this guide will offer success or profit. Consider and implement these suggestions at your own discretion.
Product
Best selling mushroom sticker with matching mushroom enamel pin
Before you can consider wholesale, you must have a solid and consistent selection of product lines OR designs available.
Having only a few of each product category or offering designs that are inconsistent in style or theming, it will be challenging for retailers to invest (and sell the product lines) due to lack of selection and an inconsistent brand presentation.
By having a catalogue with at least 1 product category and 30 designs, scents, or flavors, it will give your retailers enough selection to choose from to meet your opening order minimum and allow them to present a solid line of products that reflect your brand.
I started with 1 product line which focused on a general theme and 30-40 designs within that product line.
As my business grew, I not only expanded on my original product line to experiment with new design themes, but used the best sellers from that original product line to invest in other product lines. This allowed me a bit of assurance that the design would sell in a new product “form” while offering the retailer more choice. This also opened the doors for me and my retailers to offer gift sets, helping to increase our average order value.
Price
First, look at your retail pricing to see it can accommodate being chopped by 65-75%.
50% is the keystone wholesale price point that most retailers will expect to receive from you. And in addition to that, you'll also be paying for:
processing fees (to take payment for orders)
a possible 25% commission (if you have sales reps or on a wholesale platform), and
other expenses involved in shipping in bulk (aka larger boxes, more stuffing, and your time to fulfill).
With all those costs in mind, can you still make a profit? If so, what is that margin? 20-30% profit is usually comfortable.
Now, with your retail and wholesale price in mind, where do you fall in comparison to the competition? Are you too high? If so, can you justify those reasons (eg. higher quality, long lasting scent, etc). If you can’t, how can you lower your wholesale price; Different material, ordering more materials or products at once? If you’re costs are too low (in comparison to your competition and the market), consider raising your price to align with the standard.
Policies
Always have policies in place. This is a rulebook to how you do business and will set boundaries to protect you, your business, and your relationship with your retailers.
Some questions to ask that will help construct your policies:
Where or how do you want people to order from you?
What is your minimum opening order & reorder amount?
What are your unit minimums (per SKU & per order)?
What's your payment terms, return policy, and shipping standards?
Do you offer free shipping? If so, what’s the qualifying order amount?
How do you deal with damaged goods?
Do you allow third-party selling on Etsy, eBay, or Amazon? If no, state this clearly.
Do you offer permission to use your product photography?
How would you like people to share on social media? Is a tag required?
How will you handle those that don’t abide by your policies?
When you’ve written your policies, place them on your website (in a wholesale section) or in your wholesale catalogue / PDF so retailers can read it before purchasing and know what to expect.
If you are on a wholesale platform like Faire, any order a retailer places through that platform will follow that platform’s terms of service (aka T.O.S), not yours. Make them aware of this in your policies.
Packaging
Product packaging
Your packaging will most likely be different from retail to wholesale. When someone buys from Etsy or your other e-commerce shop, your packaging might be simple to keep costs down. Or it may require a bit of labour to add the personal touches like wrapping or notes.
However, in the wholesale space, you’ll be required to:
bundle more products in a single package
pack and protect the order of products during shipping
ensure it will look attractive and professional on display in the retailers shop.
Depending on what you sell too, it may also need certain specifics on the packaging that retail customers are looking for when shopping in-store. They won't have online product descriptions to reference so things like scent, flavor, best use, and your company name/branding, would be nice to have on your packaging.
If you ship displays that showcase your branding on it, individual product packaging might not be necessary in that case.
Shipping material
When shipping products in bulk, you must consider how it will be packaged together to ensure nothing gets broken or damaged in shipping.
What size of boxes (and how many size of boxes) would you need? What kind of padding or stuffing would be best?
Production
Think ahead to when you start fulfilling orders and what your “limits” or restrictions might be.
If you’re hand making your items, how long will it take you to fulfill a minimum opening order? What if you get multiple orders in a day OR get a larger single order, how quickly can you fulfill that? Is it manageable for you and reasonable amount of time for the retailer to wait?
What restrictions might come up on a larger order? Would you need to get help? Can your costs handle getting help? Or, can you pre-make things ahead of time?
If you’re brining inventory in, how much of each SKU will you keep on hand? Where will you house the inventory? What is your restock / reorder point for those inventory items? How will you manage that inventory as sales come in?
Photography
Having professional photos are imperative to sales.
Since photos are the first thing a retailer sees, it must catch their attention and show the product that is as true-to-life as possible.
Eliminate the use of heavy filters or “busying” the photo with too many props which could distract from or misrepresent the product.
You can hire someone or photograph the items yourself. If you decide to take them yourself, take a peek at this post where I share my best product photography tips. While it’s specific to Etsy, these product photography tips can apply to any e-commerce website with a product-based offering.
Photos to consider taking (which is part of my list):
Product on white background
Top down (aka flat lay)
Angled
Front / Back / Underside
Open / closed
Close-up / detail
In-use / lifestyle
Catalogue
Once you've figured out some of the basic above, having a wholesale catalogue is a great thing to have handy as it will help you start pitching to potential retailers or update current ones that might not be on a platform. This catalogue will give them all the information they’ll need to make a buying decision.
The wholesale catalogue should include things like:
About you and your brand
Contact information
Wholesale policies
Product line (product specs, order minimums, MSRP)
Lifestyle / in-use photos
You can check out a template I sell, which will give you a great starting point.
Brand
Alot of what you do, you’ll find, will be tied to your brand – what you stand for, how you interact, fulfill, present your items are all a reflection of your brand.
An example being that if sustainability is important to you, are you choosing materials and packaging that is minimal, natural, or biodegradable, etc. This value should be reflected in your product and packaging as best you can in order to communicate that. Also think about how you, your products, and brand can stand out from the crowd and where can you differentiate yourself.
Promotion
With your branding in mind, put some thought into offering some promotional material in each order. This will help build your brand among your retailers and share important information.
Consider creating a flyer or postcard that communicates:
A personal thank you note
An upcoming show or product announcement
Ordering information
Brand story
Something else of value to the retailer
You might even consider offering a sample of something that would complement what they’ve purchased. Up to you!
Don't worry if you don't get all these pieces in place right out of the gate. Some will be easy. Others will take time and more data points to determine the best path forward.
My experience in wholesale was a slow build and correcting mistakes as I learned, which is normal. Just remember that wholesale is an iterative process that will be unique to every product-based business so make it your own, and own it!
Let me know in the comments below if and how these tips will help you in your wholesale journey.
Ready to wholesale?
Or, want to connect with a wholesale community for more help? Join me in Proof to Product’s LABS community and tell them Amanda Weedmark sent ya!
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