We’re talking all things wholesale for small businesses! Wholesale is a great revenue stream that can really progress small businesses. It might be something you were thinking of branching out into this year but are unsure how to start, or perhaps you’re not sure on the best form of wholesale for your business.
Therese is a business mentor from the Small Business Collaborative, and an expert on all things wholesale. You can contact her for 1-2-1 mentorship and group training, or to get guidance on where to take your business next.
Wholesale is a massive area and a hugely beneficial revenue stream, so Pedddle founder Nicki recently had a chat with Therese to learn more:
There are currently no shops open due to the Coronavirus outbreak – what does this mean for wholesale?
Selling wholesale basically means selling your goods at larger quantities for discounted prices, which are then sold on by larger retailers. Usually selling wholesale means selling to shops and boutiques. Whether they are closed or not in the current climate depends entirely on what kind of products they sell. Some shops are still trading, such as anyone who sells any sort of food, and online shops are very much thriving right now, so could still be worth approaching them regarding wholesale products.
Now is a great time to do the prep work regardless. Work on your email pitch, your pricing strategy and your sales materials (such as whether you need a brochure or catalogue), to get a head-start on wholesale for when the shops all re-open.
Although for many of us this is an incredibly busy time, some people may have more time on their hands right now, for instance if they have been furloughed in another job or don’t have kids to look after, and have less orders coming in as a result of the pandemic. Use this time wisely, and research people you want to contact in future to get a headstart for when business does get back into full swing.
What can people be doing now to prep? Is it a good time to contact places despite the Coronavirus crisis?
Some shops have always only sold online, so are still doing well right now. Other shops have diversified and gone online due to the pandemic. Some older, more well-established and traditional brick-and-mortar shops may not be selling online, so it’s a real mix.
Despite the current uncertainty, in a few weeks it might steady out and even more people will be looking online, and retailers may be looking for products. Now is a good time to put yourself out there. Work on your email pitch, your pricing strategy and your sales materials.
Start by interacting with people you’d like to sell to on social media, and get your name, face and brand out there. Many people are inundated with emails and very busy in these uncertain times, so a direct sales pitch may not go down too well. If you want to hold off from a direct sales pitch, it’s a good idea to make yourself known via their social media channels, so that you’re familiar to them by the time you want to sell.
Is there a list or catalogue of boutiques and businesses so you can find people to sell wholesale to easily?
There are people that will sell you contact lists, but it’s usually just best putting the research time in yourself! Look for people that your brand fits well with, that you can compliment.
TROUVA.com is a fabulous website which lists other people’s products, and is a good place to look for people to sell to (see below). Look for a range of products or brand and see what stockists they use. Contact the stockists and see if they’ll take your stuff on, or at least familiarise yourself with their social media channels.
Lots of brands have stockist lists on their website. Check them out. Make sure they’re not in direct competition with you, but ensure that your style will compliment theirs.
Ask your followers what their fave indie shops are, both online and offline. This could help you find smaller boutiques and suchlike. Your followers are also likely to like things with a similar style to yours – so this is a great way to find people you might not have heard of.
How do I contact people?
Interact with people on social media. Make sure you’re commenting, liking, sharing and re-gramming their stuff. Depending on the retailer and how well you know them, you could DM them. However, some stores and businesses will be overwhelmed right now, so be careful who you contact. Be supportive – don’t bombard them or go in with a sales pitch if people could be overwhelmed at this time.
If it’s an online-only business, approach them asking for contact details saying that you’d like to approach them regarding wholesale. It’s a good idea to do your initial pitch by email rather than DM (keep it professional).
Remember, YOUR INSTA IS YOUR CV! Your Instagram should reflect your brand, style and personality. When people notice you interacting with their social media they’ll look you up and flick through your grid to see what you’re about.
Check out our recent blog with Elizabeth Stiles on tips for moving forward with your Instagram during the Coronavirus pandemic: https://pedddle.com/instagram-small-business-marketing-tips-for-coping-during-coronavirus/
If you’re not sure whether your Instagram is worthy, check out our blog for tips: https://pedddle.com/are-you-instagram-ready/
Do you need to have a brochure? And should it be in print or will a PDF outlining your products & prices suffice?
Start with a PDF version if you’re just emailing people. If you’re doing a trade show, many buyers are traditional so get a brochure in print or a catalogue that they can take away with them, but this is not necessary if you’re just starting out.
If you do have a brochure or catalogue, it’s great to have as part of your stallholder kit to take to markets to advertise your wholesale services too.
When is the right time to go to a trade show and how effective are they?
It’s so individual to your business! For many small businesses, it will be difficult to afford to sell at trade shows – especially in the current climate. When the economy re-stabilises, huge trade shows will spring up once again.
Be firm in your goals. If you only want 10 stockists because your product is handmade and you simply can’t produce more, a trade show might not be worth it. However, if you can scale your production up enough to get bigger orders, the pay off can be huge. It entirely depends on your outlay capabilities.
Are there any smaller trade shows for small businesses?
There are huge wholesale shows because the buyers need good reason for taking the time to visit the trade shows – it’s expensive to attend, so the show must be big enough to attract many visitors and give them a wide variety of options.
What are the different ways to wholesale products?
- Firm sale / wholesale – you need to have big margins for this, but it can pay off as there’s more chance of people buying from a larger trusted brand or shop, or even coming across it in the first place. The shop buys a certain amount of stock for a set price – but you usually earn less commission as a result. However, this is a much steadier way of selling wholesale.
- Rent a shelf – you effectively rent a space in the shop, to sell your products. There will then be no exchanges unless there’s damages, and no refunds – if they sell it, you get the money and if it doesn’t sell they put it on sale at end of season.
- SOR – sale or return – This is not Therese’s favourite way of trading as it can be difficult to keep up with, but it can help you start trading with someone if you’re only just starting to sell wholesale. It traditionally means that a buyer (e.g. shop) will buy your goods on a ‘sale or return’ basis. You will need to set out exact terms of agreement before they begin selling, and then you invoice them according to the amount of items sold. Invoice them on your terms, be it pro forma or on credit, and set terms such as they must sell a product within 3 months or they can return it to you, or exchange it for a different product, as long is it’s in perfect undamaged condition.
With SOR you have to be very specific on terms, it’s not like a commission where they tell you what they sold and you invoice them for the product minus their commission, like an art gallery (as still you own the stock until it’s sold). With commission based selling, the sales the risk is on you, but with SOR it’s better for you as it’s the shop’s responsibility to sell.
- Dropshipping – This is usually an online service. A website or seller will list products from you, and they own the listing. When they get an order, it will be up to you to fulfil it – it’s essentially a fulfilment contract.
Are any of these strategies less risky or more financially beneficial?
Therese’s most preferred version (if you have the margins) is the wholesale / firm sale route. This is the least time consuming way of selling. It also means that you don’t need to keep track of monthly reports and payments as with other methods, but you will need bigger margins, as the retailer will want a decent profit from the products.
Pedddle has a wholesaler ready button; at present we don’t utilise this, but in future we aim to advertise to people that we have curated pages where you can easily see which of our stallholders offer wholesale services. In future, we’d love to contact shop owners and stockists and make it easier for them to find makers who offer wholesale products.
Therese has termed up with Catherine from Future Retail to offer an online course which could be hugely beneficial – if you purchase it before the end of the day on 10th April you can get access to an additional two special webinars, one next week and one in June. The courses are self-paced – perfect to do in your own time during lockdown! They also have a range of courses which you can find here.
1 to 1 support
Therese offers 1:1 support and free discovery calls for anyone interested. She also has lots of informative blogs on her website: https://www.smallbusinesscollaborative.co.uk/
If anyone wants Therese’s free e-book, ‘A beginners guide to wholesale‘, you can sign up to her newsletter and it will be emailed straight out: https://view.flodesk.com/pages/5df908bbf68c9d00263c9c21