Do you want to expand the scale of your electronics business to earn more profits? Or do you want to level up your operations and leave behind the problem of unreliable suppliers and demanding customers?
A transition that will make you more profits is switching your enterprise from a business-to-consumer (B2C) to a business-to-business (B2B) model.
If you’ve been considering making the shift from retailer to wholesaler, we’re here to help you take the plunge. We’ve created this simple guide to ensure you’re all set for success.
Here is all you need to know for a smooth transition from an electronics retailer to a wholesaler.
Research the Industry, Market, and Product Specifics
The first step in transitioning from electronics retailer to wholesaler can be summed up in one word: research.
This involves doing your due diligence on many new terms and market elements that set retail apart from wholesale.
At this stage, you must answer questions and brainstorm things such as:
- What are you going to sell?
- Is there a market for the products you’re selling?
- Do you want to sell consumer electronics or work with more niche products?
- Who are the competitors in the wholesale space offering the same range of products?
- What are your competitors’ key selling points?
- What is the competitor charging? What discounts are they offering?
- Is the local market or global market better for your business? What enterprise scale can your operations manage?
- Are you going to offer samples or discounts to first-time buyers?
- Will you be offering bulk order discounts? What percentage will ensure healthy profits?
- Why should a retailer choose your products over others? What will set your wholesale enterprise apart?
- What are the total costs of starting and running your business long-term?
These questions should get you started on your brainstorming journey. While there are many more elements to consider, you can tackle them as you move along the transition process.
Once you’ve decided on these details, it’s best to look over them with a local legal expert to ensure that you will not run into any legal issues in the future.
Source Your Inventory
To transition to a wholesaler, you must find new sources for your inventory. Focus on acquiring items with a high market demand at all levels, ones that are sure to fly off the shelves.
To find inventory sources, you can attend local trade shows and conferences. You can also cold-call businesses to start building your client base. Taking notes on what your competitors are doing can also help you navigate the process.
As you transition into wholesaling, you must also select the manufacturers you want to work with. Most manufacturers have strict requirements for the wholesalers they work with, and you must ensure your business operations will meet them.
Choose Where to Sell Your Goods
B2B online trade websites are a great option if you’re looking to sell to a larger client base. These marketplaces are also ideal for a range of clients that might be located anywhere across the globe.
Here are some other options worth considering:
You must also consider territory control if you sell to retailers within a particular area. This is because manufacturers often have clearly defined conditions on sales territory to prevent conflict among wholesalers.
Consider Pricing Strategy
Retailers make most of their profits by acquiring goods in wholesale quantities for a low price and selling the products for a markup.
Wholesalers use an entirely different approach. Their focus lies in selling a high volume of low-cost pallets to compensate for the low price per product. This is why wholesalers have a fixed minimum order quantity (MOQ) for retailers purchasing their products.
They may also have to offer large volume discounts to clients to gain an edge over competitors. So if you want to transition into wholesaling, you must prepare a robust pricing strategy to ensure consistent revenue and long-term success.
Inventory Management
One of the big differences between retailers and wholesalers is inventory management.
Depending on your inventory size and operation scale, you may have to create a whole new system to keep track of what you’re bringing in and selling off. Robust inventory software with universal product codes (UPCs) and barcodes will help.
As with retailing, it’s important to label and catalog all products in your wholesale inventory arsenal. This will make it easier to keep track of all orders and manage your operations in the long term.
If you want to offer packaging services to your retail partners, an accurate and flexible inventory management system is crucial. You will have to take on the labor and resources to do so, but you will be able to increase your pricing.
Order Fulfillment and Distribution Process
When you transition to wholesale, you will also have to develop a different distribution strategy. Consider your current shipping methods as a retailer. Can you adapt to the new business with your existing resources? Or will you need to scale?
Brainstorming these elements of the distribution process will help you deliver a smooth delivery experience to your retail partners—an essential component of developing a strong and mutually beneficial business relationship.
Furthermore, you must think about new payment methods. Advance payments or pay-on-delivery schemes will require you to structure your distribution process and pricing strategy differently.
B2B Marketing and Sales
Retailers center their marketing efforts on direct consumers, while wholesalers must focus on bringing in retailers as clients. This requires an entirely new B2B marketing and sales strategy.
You can manage this internally or hire a wholesale sales representative to take care of it. Your marketing strategy must cater to potential retailers on the right platforms. New marketing collaterals must be for B2B clients, such as product catalogs, one-page sell sheets, and/or line sheets.
Make sure your catalogs are as descriptive and easy to understand as possible. This will prevent misplaced orders and client losses due to a poor sales experience.
Wrapping Up
Expanding your business’s scope from retail to wholesale can be a tricky process—there are many elements to consider and adjust accordingly. We hope the tips and step-by-step outlined in this guide can help make the shift much easier for you.
Best of luck with your latest wholesale venture!