Everything You Need to Know About Starting a Wholesale Business
What is a wholesale business and how to get the most out of it? Check out the list of top wholesale items to sell and best practices for a proper start
Starting your own wholesale business from scratch can become a daunting prospect if you’ve never done it before. It’s a time-consuming endeavor, and if you don’t know what is wholesale and why you’re doing it, the business could fail before it gets off the ground.
Luckily, plenty of other entrepreneurs have started the wholesale business model before, so you can benefit from the wisdom they gleaned and learn from their successes and business mistakes. That’s what this overview is all about!
We’ve gathered this wholesale guide to help you get reliable information about everything connected with starting a wholesale business: from finding and validating your money-making idea to figuring out your shipping strategy to finally launching your product or service. And by the end of reading this, you’ll be ready to go out and make some money!
How to Sell Wholesale and Why Is Wholesaling Business Worth It?
Let’s start from the basics: what does a wholesaling company do?
In essence, a wholesale business sells goods in bulk to another retailer, offline or online, who will later sell them to new customers at a higher price. Initially, wholesaling was associated with brick-and-mortar store giants like Walmart, but these days, the niche is filled by direct-to-consumer eCommerce companies. That’s pretty simple: for offering wholesale items to sell, it’s enough to reorganize the space in the store for bulk products. You no longer need to spend a fortune on starting a separate company. The striking examples in the category of stores that have chosen this strategy are Amazon and Wayfair.
That’s all clear, but why did these companies decide to learn how does wholesale work? The answer is the wide range of benefits a wholesale business possesses.
Selling wholesale products for resale is more than just a way to make money. It’s also an opportunity to build relationships with retailers and buyers, learn about new markets and stay ahead of trends, as well as grow your business in several different ways. But perhaps most importantly, the wholesale business allows you to capitalize on selling high-value products at low margins, which gives you all sorts of flexibility when it comes time to raise prices or scale up your business. If you’re trying to start a retail or online business that sells goods and services at full price (or close), the wholesale program will help you get established without taking on too much risk or spending lots of capital upfront.
3 Benefits of Selling Wholesale Items:
- Get higher sales without extra costs on marketing: A wholesale business is much easier on your budget and will help you sell more goods. While marketing costs may be higher in some cases, there’s no need for advertising if you choose to sell wholesale.
- Partner with established brands: With wholesaling business, you can leverage other brands’ audiences that may have even more audiences than you. The model lets you join forces with as many other brands as possible and start building relationships with them early on.
- Enter new markets: Working with suppliers selling wholesale helps you enter new markets with less risk because you’re buying products in bulk. Plus, working with reliable suppliers gives you more credibility when you come to customers.
Retail & Wholesale: What Is the Difference
Retail & wholesale may sound very different in theory, but in practice, businesses tend to mistake these two approaches and try to combine them to use all their benefits.
Let’s start with definitions of retail & wholesale. Retail is about selling a product directly to a customer, and wholesale is about dealing with several products or customers at once. This key distinction creates dramatic differences in the selling process. With retail sales, you sell your product directly to consumers in your brick-and-mortar store or online. While selling wholesale, you sell directly to other businesses which then sell their products to consumers. In this case, you’re not dealing with customers directly: you are either selling one product at a time or in large batches.
We’ve summarized all the other main differences between retail & wholesale in the list below.
5 Key Differences Between Wholesale & Retail:
- Quantity and price: A wholesale business sells many goods at a low price, while retail will sell the same good in smaller quantities to end consumers more expensively (However, given the existence of retail arbitrage, the price difference may not be that high).
- Type of relationship: Wholesalers cooperate with manufacturers and retailers, while retailers work with customers and retailers.
- Marketing: In wholesaling business, your marketing efforts don’t play as important a role as in retail.
- Business size: The huge amount of products makes a wholesale business bigger than a retail one.
- Store requirements: An appealing appearance and good location are much more important for retail customers than for those offering wholesale items to sell.
Can a Business Be Both a Wholesaler and a Retailer?
There are many reasons why someone would want to wholesale products — and one of them is that selling wholesale could lead to retail sales as well. The most obvious benefit of starting a company that unites the retail approach and the wholesale business model is having two sales channels with which you can make money.
A second benefit is that you can start building your business even before it’s operating at full capacity by selling your inventory in whichever way makes more sense — wholesale or retail. If you start with only one channel and don’t get enough customers, it could take longer than expected for your business to become profitable. By using both wholesale & retail strategies from day one, though, you can ensure that every dollar spent on inventory pays off.
But don’t try to match retail & wholesale anytime. Since there are such vast differences between wholesale & retail, it’s important to know what works best for your business before you get started.
For example, if you have $500 in inventory sitting on a shelf somewhere collecting dust, that may be an indication that wholesale isn’t right for you (yet). Similarly, if no one buys from your storefront but they come running when they see what you have available wholesale, it might be worth rethinking how you do business. It can take some trial and error to figure out which model will work best for your business — so don’t get discouraged! Just remember that there’s an option to choose just one side of things; many retailers also offer wholesale items to sell on occasion.
Best Wholesale Products for Resale
From jewelry and clothing to candles and home decor, there are many wholesale items to resale worth your attention. But be careful! Don’t assume that all wholesale products to sell are created equal. If you aren’t educated about different types of wholesaling, you could end up with a lot of inventory you can’t sell — meaning you spent money on something that never earns any revenue.
To find wholesale products for resale, it’s a great idea to figure out what kinds of items your customers want — and then sell those things! A good start here is to check the best products to sell on Amazon or how to sell wholesale on Shopify, for example. That way, you can attract repeat business and get better at selling those types of items. Best of all, your customers will know exactly what they’re getting when they shop with you — which makes them more likely to buy from you again in the future.
And of course, as you research wholesale products for resale, be sure that you’re choosing items that you know and love. Because if you’re not passionate about an item, why would anyone else be?
Best Wholesale Items to Sell from Home
There are dozens of popular wholesale products that retail shoppers look for as well as tons of consumer goods that might not immediately come to mind when you think wholesale. So let’s take a look at some of these lesser-known items and see if they might be an opportunity worth pursuing. In this section, we’ll overview the bestsellers among wholesale items to sell from home, we’ll show you what types of products are most commonly sold at discount prices.
Even though the pandemic has affected the number of people working in offices (and thus, needing office supplies), the constant flow of students and teachers never ends, and these people always need stationery and supplies. This is especially true for the back-to-school season.
The annual back-to-school rush is a great time to stock up on notebooks, pens, crayons, glue sticks and anything else you can think of that can be useful for school. To make the most of this period, make sure you get your inventory in before school starts.
5 most popular wholesale items to sell in this category:
- Writing tools
- Educational hardware
Lockdown forced people to spend more time in their homes, and that’s how their attention to home decor has become stronger. It’s not just about getting a new wholesale product to sell for a house; it’s also about getting items for revamping what people already have in their homes.
If you can get your hands on good quality furniture at wholesale prices, then you can buy such wholesale items to resell for higher prices without having to worry about competition from other sellers. Just make sure you know what styles are popular so you don’t end up with an entire warehouse full of unpopular items.
5 home decor things to sell wholesale:
- Wall art
- Storage containers
Clothes and accessories
Clothes are the basic items for living, and so this product category works great for selling wholesale. You can sell them both in bulk and in small quantities — the relevant approach depends on the style and audience you’re aiming at.
Also, clothing and accessories let you combine wholesale & retail. If you get your hands on some good quality clothes at wholesale prices, then you can easily double or triple your profits by selling them at retail prices.
5 best wholesale items to sell in the clothes and accessories category:
- Casual (jeans, sweaters, T-shirts)
- Clothes for children
- Bags (totes, clutches, travel items)
Food is another basic item that people will always need. Even if a person isn’t in dire need of food, the chances he/she will buy a lot for friends and family or store are high.
For wholesale business, we recommend getting foods with a long storing period so you will get enough time to use these wholesale items for resale.
5 top foods for the wholesale business model:
- Frozen foods
- Low-carb foods
- Keto products
The best entertainment for people sitting at home is experimenting with cooking, and the kitchen items are the best partners in this crime. If you can get rare supplies in huge quantities at wholesale price, you can make a great wholesale business in this niche.
5 best wholesale products to sell for the kitchen:
- Rare utensils
- Party supplies (linens, disposable tableware, banquet equipments)
- Plates and bowls
- Storage containers
Goods for sports
Statista predicts the wellness market size to grow from $4.37 trillion to almost $7 trillion by 2025. What does it mean for your future wholesale business? It means that the trend toward leading a healthy lifestyle is about to prevail in the near future.
To start selling wholesale to retailers in the health and wellness niche, it’s better to get at least one of these types of products: exercise equipment (e.g., treadmills), supplements (e.g., protein powder), or apparel (e.g., yoga pants). If your customers find you as a reliable wholesale cooperation partner, get ready to expand the range of your products depending on their needs.
5 top health and wellness wholesale items to sell:
- Yoga accessories
- Vitamins and supplements
- Fitness apparel
- Skin care regimens
Did you know pet owners spent an average of $860 on their pets in 2020? That’s a lot, and it leaves room for starting a wholesale business. Just make sure that you choose wholesale products for resale that are of high quality yet affordable.
The pet care category has lots of items online at wholesale prices, so we recommend searching hard and starting by reselling the wholesale items found.
5 top pet care wholesale products for resale:
- Dog and cat food
- Pet toys
- Medical treatment (flea and tick)
- Collars, leashes, and harnesses
- Cleaning supplies
Tips on How to Become a Wholesaler
Say you’re currently making money from selling things wholesale; now, it would be a good time to expand that side of your business. If you’re new to wholesaling, or just want some tips on how it works, here is everything you need to know: how to get started, what wholesale companies look for in sellers, and more. If you’re looking for tips on how to become a small-business wholesaler, we’ve got those in our wholesale guide too.
The Checklist on How to Get Start Selling Wholesale
- Determine what products you want to sell: You can use the list of best wholesale items to resell from the section above.
- Conduct some basic research: Learn the market and your competitors the best your can. For this, check out how to sell items on eBay, for example. Also, it’s a good idea to walk with other business owners, watch trade shows, and look at what retailers offer in your area.
- Pick the cost per unit: Once you’ve identified an item that sells well for other business owners, figure out how much it would cost if you purchased it from them. If needed, get an alternative method of purchasing goods and services.
- Choose the places you will sell: Make the necessary arrangements with retailers and suppliers — and adjust your product offering, if needed and possible for you. Some items work better than others: t-shirts are easier to distribute than furniture, so consider where your customer base will be before getting started.
- Start but don’t expect too much: Try selling wholesale items you’ve picked to validate the model and expand it (if successful) or adjust it (if something goes wrong)
Wholesale for Small Businesses
As you’re getting your business off of the ground and at a small size, it can be tempting to discount prices just so you’ll have more customers. Don’t do it! This only attracts bargain shoppers that are looking for deals and aren’t willing to spend more than they absolutely have to. If someone has trouble paying full price on your goods or services, they aren’t going to value what you provide enough to recommend your store or business.
Another tip for small wholesale businesses is is always keep an eye out for new opportunities. If you’re selling wholesale goods, you need to make sure that your inventory stays fresh and current. This means regularly checking in with your suppliers and getting rid of items that aren’t moving.
Be attentive to your inventory. In fact, many wholesalers will discount slow-moving items just so they can get them off their shelves. If you’re not willing to do that, rethink your business model timely and refer to another reliable wholesale vendor/supplier if needed.
Tips on Selling Wholesale to Retailers
Trust is at the core of healthy and long-lasting relations with your retailers. To become a reliable partner to them, you have to be able to offer them products that are worth their while, delivered on time in high-quality packaging. It’s also important for you to understand what they need from you as a supplier so that you can deliver it consistently over time.
If you’re just starting out with an idea for your own wholesale store, one of your biggest challenges will be finding products your retailers can trust. Working with suppliers who have experience in retail is always best – they know what works and what doesn’t because they’ve been there before. Don’t be afraid to ask questions about who sells their product and where. Be prepared that some manufacturers won’t have answers because it’s not always worth their time tracking down those leads themselves.
Your relationship with retailers will never be one of equals: they have more buying power than you do, and their decisions about which suppliers they work with will always be based on factors outside your control (like whether or not they like you). That said, you as a business owner should invest the maximum to establish yourself as someone who’s worth doing business with — like preparing a step-by-step presentation plan before meeting them.
How to Find Wholesale Cooperation Partner
There are several resources available for finding wholesale cooperation partners, especially online. Reach out to other businesses in your industry and find out who they purchase from and what they pay attention too. Ask them about their experience and make your conclusions on which wholesalers or distributors are worth working with.
If you’re looking for wholesale products, don’t forget to check out sites like Amazon and eBay as well. These platforms are great places for several purposes: conducting market research, making a competitor analysis, finding suppliers — and even selling your wholesale items online.
For the latter case, Sellbery assists with multichannel selling from different eCommerce platforms. We help businesses sell online with ease, work with several eCommerce channels at once, and get rid of manual product management. Try us now, and become a top-selling wholesaler right away!
Was this news helpful?
Also Popular on Sellbery
Amazon listing optimization can take your Amazon business to the next level. Find out how you can use this tool to your advantage.
Want to know how to get a UPC code and why you need them? Read this article to understand what are UPC codes and learn the difference between UPC and MPN codes.
The secrets behind inventory control: The top-performing techniques, working solutions, and best practices that will let you make the most of your stock
SEO issues Shopify. Why are you not getting sales on Shopify and what to do about it?
Amazon is an online marketplace with the world's largest competition. Today, more than 2 million merchants generate 40% of all Amazon sales. More than 100 thousand of them have a turnover of no less than six-digit sum each year. Impressive and scary to start!
Whenever you are on the verge of taking your eBay business from being just a side job to being a full-time affair, you go searching for ways of increasing the sales rate. eBay has a few tools for boosting your success.
A10 Amazon Algorithm is an update to A9, an algorithm for search engine promotion on the retail platform. Its main purpose is to help consumers find products. Just like Google, the marketplace algorithm ranks companies and products, offering the most relevant to customers.
No doubt, Amazon is one of the top attractive eCommerce destinations for online sellers, where even small handmade businesses can build their Empire and sell products successfully. However, the challenge is to choose a niche and products that fit the market and reach out to big audiences. As an eCommerce marketplace like eBay or Etsy, Amazon can be easy to set up, but not that easy to find profitable products that sell.
Want to stop a buyer from bidding on your items? Here's how you can block a buyer on eBay to stop them from bidding on or purchase your items.
Upselling definition and examples. Upsell vs Cross sell and right strategies