Highlights of our IGTV about wholesale selling with Therese from Small Business Collective.
Pedddle Founder Nicki recently to spoke to Therese, a Queen of Wholesale, who works with small businesses to begin and then grow their wholesale offering. They chatted about how to begin and scale wholesale as a small business and gain more confidence with selling in general.
You can watch the full IGTV below (via the PedddleUK Instagram IGTV) or read these highlights:
Main take-aways from the IGTV Live chat:
Has Covid effected Wholesale?
At the peak of lockdown it did effect things, but outside of that it hasn’t changed much. Having just returned from a trade show, it’s clear that things are returning to normal. Prices may have risen slightly, but it’s clear that people want to see products in person and are happy to spend money. Retail isn’t dead!
Before the pandemic, many people were talking about wholesale marketplaces vs trade shows, but people are now recognising that they’re very different things and have different offerings.
More independent shops were looking into wholesale products from small businesses, and this is still on the rise.
What is the best route to wholesale – should you consider it from the beginning when setting up your business?
There is no set point as such. Some businesses always intend to do wholesale from the outset, and sell some B2C (business to customer), with their sales mainly in wholesale, or some take a more ’traditional’ route, and branch out into wholesale selling slowly. There is no ’better’ way; either way is possible and both can be beneficial to your business.
Click here for the beginner’s guide to selling wholesale if you want to know more.
Do you need a lot of experience to sell wholesale?
Not at all – but your products do need to be ’retail ready’. You need to be able to make your products of a consistent quantity and quality.
Click here for some top wholesale selling tips from small business owners.
How many products do you need to start selling them wholesale?
Be clear about what you can offer. It’s not common to offer a cap or a maximum number of products, but it’s good to be clear about your capacity and realistic with yourself about what you can make.
If a retailer places a big order with you, you need to be ready to provide that amount. If you’re unsure, dip your toes in the water and target a couple of independent shops locally before you approach larger retailers.
As always, confidence is key! If you’re just starting out, be confident – there is no set business size that you need to be before you can start selling wholesale. Just go for it!
What do you need to have before you can approach a retailer to sell?
There are 6 common mistakes when preparing products for Wholesale – click here to see what they are and how to avoid them.
Pricing clarity is key. Be clear on your pricing. Offer the retailer something they can work with and make money on, whilst you’re still making money too. Consider your margins and what percentage discount you can offer.
It’s easy to tell yourself at first that it’s ’paid for marketing’ or it will ’just get you seen in a different place’ – but you need to be making money from it, it’s a financial decision as much as giving you more marketing exposure.
Click here to read more about pricing your products for wholesale, a blog which Therese has written.
What can businesses expect to charge / what should retailers gain percentage wise?
It is difficult to generalise, but generally you’d give a 50% discount on whatever you’re selling, e.g. if you’re selling a product at £10 RRP (recommended retail price), a retailer would expect to be paying £4-5 for it ideally. This is because you need to take their VAT into account, as your retailers are likely to be VAT registered – so your business would take that VAT hit and the retailer could then expect to make roughly a 20%+ profit. Take into account that they’d need to account for that VAT margin so then you’d sell the product as slightly lower – but as a small business you’re unlikely to be paying any VAT yourself. However, they will want to be making a profit from your products too.
What are the differences between Sale or Return and Commission?
Sale or Return (known as SOR) and Commission are the main types of selling wholesale. Click here to explore what SOR involves. Commission selling is different, and puts the onus more on the retailer to sell.
Firstly, have an open discussion to see what the retailer wants from you.
Compile a sales pack of your prices, a catalogue or line sheet, an order form and an email pitch to tailor to retailers, so that you don’t have to compile it each time. You can then trial this sales pack and send it to a couple of local businesses, before you start targeting larger retailers.
Pricing to profit
Click here to find out more about Nicki’s chat with Catherine from Resilient Retail Club, which discussed pricing confidently in more depth. Catherine has previously teamed up with Therese to offer courses on subjects such as this.
Watch the full IGTV Live here:
Work with Therese:
Click here to find out more about Therese and her work.
Therese offers a great course on selling wholesale so that you can learn in more depth – click here to find out more.
We hope this helps you to branch out into wholesale! Check out our other blogs for further small business tips.