Are you looking for a way to take your online business to the next level?
Selling wholesale could be the answer. It’s a great business model that many entrepreneurs overlook.
Most online stores sell their products directly to retail customers.
But that’s not always the best option.
There are a bunch of benefits to wholesaling online.
Instead of handling thousands of orders each month, you can make just as much money with only a handful of large orders. Selling wholesale also makes customer support and marketing much more manageable.
So you get more time to enjoy the money you make.
If you want to learn how to sell wholesale online, this guide is for you. You’ll learn everything you need to build a thriving online wholesale store in 11 simple steps.
As a bonus, we’ll also reveal 5 suppliers from the SaleHoo Directory you can use to source your first wholesale products.
Let’s get started.
4 Types of eCommerce
Before we get to the step-by-step guide on how to sell wholesale products, let’s quickly recap the basics.
There are four main eCommerce business models.
They all share the same principle of selling online, but there are also a bunch of differences.
Dropshipping is how lots of people make their first dollar online.
With this business model, you don’t have to maintain inventory or handle the shipping of the products you sell. Instead, dropshipping stores use a third-party supplier to manage the fulfillment process.
When a customer makes a purchase, you place an order with the supplier, and they pack and ship the product.
Wholesaling is further back in the eCommerce supply chain.
A wholesaler will purchase products In large quantities directly from a manufacturer or another wholesaler. They then sell these products in bulk to retailers.
The wholesale market is huge. In the US alone, the wholesale trade industry is worth $11.4tr in 2022.
Think about all the products sold daily online and in brick-and-mortar retail stores. Most of those products were sourced from a wholesale business rather than directly from a manufacturer.
Manufacturing is at the start of the eCommerce supply chain.
A manufacturer buys raw materials and smaller components and turns them into products. Then, the manufacturer sells the products in large quantities to wholesalers, retailers, and sometimes in smaller amounts to dropshippers.
Private label sits somewhere in the middle.
A retailer will get a third-party manufacturer to produce products under the retailer’s brand name. The retailer has much more control over the product specs and design.
Once the products are manufactured, they are shipped to the retailer and sold to consumers.
Pros and cons of wholesaling
So we’ve covered the basics.
You might be thinking, “is selling wholesale products online really a good idea?”
There are disadvantages to every business model. But there are also some compelling advantages to wholesaling.
Let’s quickly look at the pros and cons so you can get a better idea of whether this business model is right for you.
- ✅ Wholesalers can negotiate significant discounts with manufacturers by ordering in bulk.
- ✅ Competition generally isn’t as fierce as selling directly to consumers.
- ✅ You don’t have to handle as many customer service inquiries.
- ✅ Marketing costs are typically cheaper than retailing.
- ❌ Need more capital to invest in inventory.
- ❌ Wholesalers typically don’t earn as much profit per unit as retailers.
- ❌ The financial risks can be greater with wholesaling - that’s why product research and finding reliable manufacturers are super-important.
- ❌ Wholesalers don’t interact directly with end customers - getting product feedback can be more challenging.
How to sell wholesale online in 11 steps
If you’re still here, you’re ready to take the next step and learn how to sell wholesale online.
This section of the guide will show the steps you need to take to create an online wholesaling business, from negotiating with suppliers to marketing your products.
Let’s dive in.
Step 1: Source your products
The first step is to find wholesale products to sell.
In most cases, you’ll be dealing directly with manufacturers. That means there are a couple of different ways to source products.
You can buy products that the manufacturer already produces for other clients.
You can design a custom product and get the manufacturer to produce it.
The second option is always more expensive and time-consuming.
First, you’ll have to work on a design and then reach out to manufacturers to see if they can produce it. Then, the manufacturer will send out a prototype so you can make any adjustments before it goes into production.
The main advantage is that you get a product that meets your exact requirements. But design and production can take a few months, and the cost is much higher.
The alternative is much faster.
You can contact a manufacturer and buy a product that they already produce.
This is how most new wholesalers get started.
It’s easier to judge the demand for existing products and minimize the risk. Some manufacturers also offer custom branding services so you can make the product your own.
So, where can you find manufacturers and distributors?
One option is to search Google. When you know the type of product you want to sell, search for manufacturers locally and worldwide.
For example, if you wanted to sell private label cosmetics, you could search for “skincare manufacturer Texas.”
This method can help you find some suppliers.
But it’s also really time-consuming.
The best place to find suppliers and manufacturers is to use the SaleHoo Directory. You’ll find over 2.5 million products sold by over 8,000 vetted suppliers.
So you’ll be able to trust the suppliers you work with and not worry about some scammy manufacturer delivering low-quality goods or running off with your deposit.
Access to SaleHoo also includes SaleHoo Labs and SaleHoo Dropship. These tools can be very useful for finding winning wholesale products.
If you are looking to import inventory in bulk from another country, make sure you check out our Guide to Importing Wholesale. It’s full of insider info and tips you can use to make your first import run smoothly.
Before you dive into wholesaling, you need to validate your product idea. That’s where dropshipping can be really useful for wholesalers.
You can test out product ideas without investing in inventory. This minimizes the risk and helps you validate products before transitioning to wholesaling.
It’s a critical step that helps you avoid sinking your money into products with little to no demand.
Discover more about how to find winning wholesale products in the resources below:
You can also use our free tool to see if there are suppliers that can provide your product idea on the SaleHoo Directory. Simply enter your product idea, and you’ll see the potential suppliers waiting to take your order.
Step 2: Negotiate with suppliers
As a wholesaler, inventory is your highest cost. So negotiating with suppliers is vital for profits.
Long-term customers are the most profitable for manufacturers. You can use that to your advantage during negotiations by highlighting that you will be ordering in bulk and making repeat purchases.
You can usually bring the cost per unit down by speaking to several suppliers and using the quotes you receive as leverage during negotiations.
Remember that everything is negotiable.
It’s also essential to order product samples before you sign any agreement. Most manufacturers and wholesalers provide samples so customers can see the product in person before they commit to a large purchase.
If the manufacturer already produces the product, samples are usually provided for free. However, if it’s a custom-designed product, you can expect to pay at least the cost price for the sample.
Check out our guide to learn more about ordering from suppliers and how to avoid the common mistakes.
Step 3: Create a wholesale store
The easiest way to create a wholesale store is to use a platform like Shopify. It makes the process of building a store from scratch fast and straightforward.
If you need help creating a Shopify store, check out our detailed step-by-step guide. It shows you everything you need to build a storefront on the Shopify platform.
Now, for those that already have a Shopify store and want to transition into wholesaling, you can use Shopify’s password protection feature to create a wholesale channel.
You can do this through Online Store > Preferences in the Shopify Admin dashboard.
Once you’ve set up a password-protected area in your store, you can list the wholesale price of your products.
You can also create a wholesale version of your store using Shopify Plus, the enterprise version of Shopify.
This will cost you more per month, but it does provide some useful additional features. For example, you get separate order tracking and performance data to see how your retail and wholesale pages compare.
Step 4: Add wholesale features using shopify apps
You can add many wholesale features and functionality to your store using Shopify apps.
A the time of writing, there are over 300 apps listed on the Shopify app store to help you start selling wholesale:
You’ll find everything from wholesale pricing and inventory management to marketing apps that help you increase consumer and wholesale sales.
Step 5: Create high-quality product pages
Wholesale buyers are influenced by product descriptions and images just as much as consumers.
Most buyers will want to see a product sample before committing to a large order, but your product pages convince them to take that initial step and order a sample.
First, you’ll want to take professional photos highlighting your product’s best features. Some manufacturers will provide images, but hiring a professional photographer ensures your product makes the best possible first impression on buyers.
Next, you’ll need to create engaging product descriptions.
Like retail product descriptions, you should highlight your product’s benefits and use cases rather than list the features. Try to focus on the ways your product will improve the lives of the end customer and how it is different from competing products.
Need some inspiration?
Here’s a great example of an engaging product description by Weber:
Most of your wholesale customers will use your product description for their retail stores, so focus on the end consumer rather than the retailer.
Step 6: Setup wholesale payment processing
Wholesalers deal with a wider variety of customers compared to retail stores.
Depending on the types of businesses you want to sell to, you’ll need to provide a range of payment terms and payment processing options.
For example, you might want to sell to dropshipping businesses. In that case, you’ll want an easy-to-use payment gateway that allows immediate payment when a customer places an order.
With larger clients, you may have to offer 30-day net payment terms to encourage sales. Many of these larger clients also prefer to pay via check or wire transfer.
It’s important to offer a range of payment options to keep your customer satisfied and encourage new buyers.
Step 7: Organize shipping
Shipping can be more complicated when you sell wholesale products online.
If you’re dealing with a big retailer, they may have an existing contract with a courier. That means you just have to provide the pickup date and location.
But this isn’t always an option.
If your products are fragile, you may want more control over the delivery process, including insurance to cover any damage during transportation.
When you start to make more regular sales, you can negotiate an exclusive contract with a vendor. This can help you to cut delivery costs and speed up the order fulfillment process.
Step 8: Set minimum order quantities
Wholesale businesses need to turn over a lot of products to make a decent profit.
If you spend time selling products in retail quantities at wholesale prices, you’ll struggle to make any money.
To make sure an order is worth it, you can set minimum order quantities. That means a buyer must order a certain amount to be eligible to purchase.
If you sell on an open online marketplace like eBay, minimum order quantities can stop consumers from purchasing your goods at wholesale prices.
One of the best ways to increase average order value is staggered pricing. For example, when customers’ orders meet a certain quantity threshold, they become eligible for a discount.
So if you sold cotton pillowcases, you could offer 10 to 50 units at $10 per unit. If a buyer ordered over 50 units, they qualify for $9 per unit pricing.
Step 9: Register with wholesale marketplaces and directories
Once you’ve sourced your products and set up your store, the next step is to attract customers.
Like most consumers, many modern retail buyers turn to the internet to find suppliers. And they use online wholesale marketplaces and directories.
These platforms can help you connect with buyers and get your wholesale business found.
You can even sign up as a supplier on the SaleHoo Directory.
It’s a great place to get your business found by eCommerce stores, dropshippers, and retailers.
You can also set your terms so that only businesses that meet your minimum order quantities and other specifications contact you.
Alongside SaleHoo, you can list your store on:
- Worldwide Brands
- Wholesale Central
You can find more options in our list of the 16 Best Wholesale Dropshipping Suppliers Directories in 2023.
Make sure you do your research before listing your business in an online wholesale marketplace or directory. There are some great platforms out there, but there are also some spammy sites that aren’t worth your time.
Step 10: Attend trade shows
Trade shows are a great way to meet industry contacts and potential customers.
There are thousands of virtual and in-person trade shows that take place every year. So whether you sell consumer electronics or baby clothes, you’ll find an industry trade show to help you connect with your target audience.
You will usually have to pay a fee to get a stall for your brand, so make sure the trade show is a good fit before signing up. There are also lots of virtual events that are usually more affordable.
Trade shows can also be an effective way to meet manufacturers and distributors in your niche.
Step 11: Marketing your wholesale business
Marketing a wholesale business requires different tactics than your average eCommerce marketing strategy.
You need to target retailers and focus on growing your client base.
LinkedIn can be a valuable tool for finding buyers. For example, over 52% of B2B buyers list LinkedIn as the most influential channel during their research process.
You can reach out to potential buyers directly with connection requests and promote your business in relevant groups.
Offering referral incentives is an excellent way to keep your customer base growing. When an existing customer recommends you to a new client, you can reward them with a discount on their next order.
If you have fulfillment capabilities, consider targeting dropshipping stores. These businesses typically only buy one product at a time, but the sales can add up over time.
You can also charge a higher price to cover the time and cost of handling lower-order quantities.
You’ve reached the end of our step-by-step guide and should be ready to start selling wholesale products online.
To give you a head start, we’ve added a bonus list of 5 wholesale suppliers from the SaleHoo Directory.
You can use these suppliers to source your first wholesale products.
5 Free wholesale suppliers
1. Homew Inc
Location: 136 Atlantic Street, Pomona, California, United States
Homew Inc is a manufacturer of handcrafted and semi-handblown glassware. You’ll find everything from champagne flutes and tumblers to goblets and glassware home decor.Contact Supplier
2. Ashbury Bloom Inc
Location: 5073 White Church Road East Mount Hope Ontario, Canada
Ashbury Bloom Inc produces natural and sustainable body and skin care products. All of the products they supply are handcrafted using sustainable ingredients.Contact Supplier
3. Ro & Ritzy
Location: 128 City Road London EC1V 2NX, Great Britain
Ro & Ritzy is a clothing manufacturer based in the UK. The company offers a private labeling service for activewear, apparel, menswear, fashion, and other types of clothing.Contact Supplier
4. Tobright Toys
Location: Brunnengasse 65 90402 Nürnberg Germany , Germany
Topbright Animation Corporation is a global toy manufacturer with a base in Germany. You can order everything from steam-powered toys to educational wooden block games and children’s telescopes.Contact Supplier
5. IS3D Pty Ltd
Location: 39 Teemangum Street Tugun Queensland, Australia
Launched in 2012, IS3D Pty Ltd is an Australian manufacturer of catering and kitchen products. You can choose from an extensive range of niche products, including cutlery, napkins, cleaning supplies, mops, brooms, and more.Contact Supplier
Is selling wholesale online right for me?
The boom in dropshipping and other eCommerce business models means wholesaling is often overlooked.
But it’s one of the best online businesses you can build.
As online sales increase, eCommerce stores need wholesalers to provide the products they sell. So there’s a huge growing market you can tap into with wholesaling.
With the right products, you can grow a thriving business by selling wholesale online.
That’s where the SaleHoo Directory can help.
You can find winning wholesale products and connect with vetted manufacturers. It makes it easier and faster to transition from dropshipping to wholesaling.
If you have any questions about SaleHoo or anything eCommerce related, reach out to our friendly 24/7 support team.