Are You Ready to Wholesale?

10 Questions to Ask Before You Begin Wholesaling. 

Are you a maker of premium handcrafted products and considering expanding your business by starting to wholesale? Wholesaling can be a profitable way to grow your revenue and better utilise your production capacity, but it requires careful planning and consideration to ensure a smooth and successful transition. We'll explore 10 key questions to ask yourself before embarking on your wholesale journey to make sure you're well-prepared for the demands of the wholesale market. 

Wholesaling: 10 Key Questions for Makers

1. Do you understand your target buyer?
2. Do you know the competitive landscape you're working in?
3. Do you have a Standard Operating Procedure for your production?
4. Have you calculated all your production inputs? Do you have a clear financial plan?
5. Do you have reliable suppliers for raw materials and packaging?
6. Have you developed your pricing strategy?
7. Have you established your banking and financial arrangements?
8. Do you understand the legal and regulatory environment in your space?
9. What's your story?
10. Quality

1. Do you understand your target buyer?

It's crucial to invest time and energy in learning about the characteristics and needs of the wholesale buyers who will be buying your products and selling them to your end consumers. This includes understanding design trends and aesthetics, pricing, ethics, and the types of products that they stock. Anticipating your buyers' needs will help you proactively create products that suit their needs and reduce friction points when they are deciding what to stock their inventory with.

2. Do you know the competitive landscape you're working in?

Before entering the wholesale market, research your competitors to understand what makes your products stand out in comparison. Make sure you know what pricing they offer, any complementary products and services and how those compare to yours. How many competitors are there and is there enough healthy demand among buyers for your type of product? Why should buyers choose to partner with you instead of them? Understanding and highlighting your unique selling points will help you attract more buyers and grow your business.

3. Do you have a Standard Operating Procedure for your production?

If you were to receive a wholesale order for 50, 100, or even 1,000 units of your product, do you have a clear system in place to deliver quality, consistent products on time and without breaking your bank balance? A standard operating procedure (SOP) is a clearly defined, step-by-step manual that shows anyone who joins your production line how to make your product. Make sure you have one in place, so that, whether you're supervising the process or not, your business can perform, meet order requirements and grow.

4. Have you calculated all your production inputs? Do you have a clear financial plan?

One very important production input is working capital. Being clear on how much money you need to fulfil your wholesale orders is important. Building in some extra contingency for emergencies and considering funding your production with a deposit from buyers on orders placed or getting funding from banks.  Another production input is time and labour. Be sure to bite off only what you can chew when it comes to estimating how much and in what time you can fulfill an order. Build your capability by starting small and gradually increasing your production muscle, and always allow for some extra time for delivery timelines. 

5. Do you have reliable suppliers for your raw materials and packaging?

Being a professional supplier means having all the inputs organized beforehand. Ensure that you have reliable suppliers for your raw materials and packaging to avoid scrambling for materials when the order comes in. Remember: build up your capability, start small and grow your production muscle, and always allow some extra time when it comes to delivery timescales.

6. Have you developed your pricing strategy?

When pricing your products for wholesale, you need to consider several factors, such as the type of product you're selling, how much it costs to make it, and how much competition there is out there. You also need to consider your buyer's expenses, such as shipping, customs, and duties, and come up with a wholesale discount that allows them to make a profit after adding their expenses to come up with a retail price. Keep your pricing structure consistent! 

If you need help with pricing, find our wholesale pricing template here. 

7. Have you established your banking and financial arrangements?

Ensure that you have established banking and financial arrangements to enable you to transact with your buyers. Most buyers will use credit cards or PayPal to transact for their financial security. Meekono offers buyers and sellers a payment mechanism where payments are received from buyers and transferred to sellers wherever they are.

Do you have systems in place to set your budgets, manage expenses, and manage working capital? Do you record and report on your business’ financial activities? This is such an important part of your process, which can either help your business grow or hinder it from doing so.  These days, there are many resources online to help you manage your finances. Or you can engage a professional. Whatever you do, do not leave until it’s too late—start now!

8. Do you understand the legal and regulatory environment in your space?

It is important to understand the tax regime in your country and whether you need to charge VAT for your products, both locally and when exporting. Do your research to ensure you’re in compliance and avoid any legal or financial issues down the line.

9. What’s your story?

You've got great products, strong images showing them, but one key piece of information when selling handmade, artisanal or creative products in your product and brand story. Your buyers and end-customers want to know more about you and your business. They want to know what led to the creation of your products, who makes them, and why. Share your story, what inspires you, and what makes your business and products unique. This will help build a connection with your customers and increase their loyalty to you. 

10. Quality

One of the most common issues that buyers told us prevented them from sourcing from specific wholesalers was quality. Buyers don’t like risk, and if they think an order might have issues with quality control, they will go and spend their money elsewhere. Quality is crucial, especially in the premium space where buyers pay a higher amount for your products. Make quality control a central focus of your production process, put systems in place to ensure every product or service you offer is of the highest possible quality. This will help build trust with your buyers and increase repeat business.