The best way to wholesale with your web-site
Once you've established an online presence for your business, you may wonder about how to sell your work to retailers. So here are some tips which help you work with this market.
- Pricing - one of the most important things. Let’s get down to the basic rules.
It’s standard to sell wholesale items at 2.5X your production costs. This wholesale price is usually about half of what the end customer pays, as it’s generally a safe assumption that the retailer will mark up their cost 2X when pricing your product for customers. It’s also common to offer a “suggested retail price,” so you can be sure you’re offering a price that makes sense for you, the retailer and the customer.
For example, if your product costs about $2 to produce, you might sell to retailers at the wholesale price of $6, which would make your suggested retail price $12. Make sure that when calculating those production expenses, you’re also including the cost of freight, marketing, and other overhead costs.
You may also want to enforce a minimum order rule to achieve selling goals. Meaning, wholesale buyers must buy a minimum amount of your product (or dollar amount) when placing an order. To create incentive and minimize the risk to the retailer, you can offer no minimum order on their first order. After that, however, it is important to stick to a minimum order regime.
As part of that, come up with an overall wholesale pricing strategy. Create a formula for orders: if your wholesaler buys 100 units, they pay $8/unit and if they order 500 units they pay $6/unit and so on. The idea behind this kind of volume pricing is to incentivize large orders that increase revenue. Start simple and see how this system works for your business.
Again, make sure you are taking into account all of the expenses associated with producing your product so you can be sure to account for them when you are calculating price. Go ahead and make a good old-fashioned list to be sure you are pricing your products fairly––to both yourself and your customer. And don't forget offer discounts to customers who buy multiple product types.
- Choose your target customer. Do your research. Who is your target customer? Where do they shop? What stores are stocking competitive products? What region are you looking to sell in first?
- Find out how retailers buy. Remember that different stores often have different buying strategies. Some buyers may make purchases on a seasonal schedule, or prefer to place orders at large industry-wide trade shows. Perhaps they want to place a batch of orders before the high season, all set to ship on different dates. Be prepared to accommodate these kinds of schedules. You can use a lot of plugins for your store if you are using WooCommerce store, which will help you set up dynamic pricing rules for each your customer.
- Taxes. When selling wholesale, you do not charge sales tax on the order, because the retailer will tax the customer upon purchase. But it is important to obtain tax id documentation from your retail buyers.
Well there you have it. Wholesaling can be a profitable business venture if it is paired with effective strategy, so why not try these tips? These little incentives could be just what you need to boost your business.
Affiliates wholesale, memberships - Prices by User Role for WooCommerce plugin can handle it.