Pratikkumar P. Gaikwad | 15 min read | Aug 11, 2020
1. Quickread
A wholesale market is a perfect place to launch your own Shopify store or extend it. You may have been contacted by businesses who want to buy wholesale of your goods. Or perhaps you want to grow your markets. A Wholesale Shopify Store is a successful starting point. If you’re a seller on Shopify Plus, your wholesale store should have a channel waiting. Even without Plus, it is not difficult to deliver wholesale rates to Shopify customers.
That’s not to suggest that you’re not going to face obstacles. Adding a B2B division of a consumer-facing eCommerce retail sector needs a different strategy. Wholesale consumers have different pressure points and desires than end-users. To help you get started, we’ve come up with a rundown of some of the issues you should be talking about as you begin your wholesale offering.
2. Different ways to sell wholesale on Shopify
On Shopify, there are four different ways to sell wholesale. Start from the easiest approach (discount codes) and work your way up to more complicated wholesale solutions in Shopify. It’s convenient to evaluate to see if wholesale is going to work well for your goods before you waste a lot of time and energy. However, if you are already selling wholesale, you might consider a wholesale channel or a second storefront.
Discount Codes
The easiest and most simplistic way to deliver trade pricing to wholesale customers is to use Shopify’s discount code tools. You basically set up coupon codes that can be used by your company customers against their orders. This can be achieved even with the Simplest Shopify subscription without the need for any Applications to be installed.
Why do you need to use this alternative
- It’s quick and easy to set up.
- It should work with your regular customer in front of the Shopify site.
- You can restrict discounts to different items or collections.
- No other apps are required.
Why this alternative shouldn’t be used
- There is no direct leverage over the price structure and individual product discounts.
- Lack of versatility as only one discount code can be used for each order.
- Discount codes may be shared or stolen anonymously with colleagues.
For whom is this a reasonable option?
A seller is just beginning to market to trade or a few commercial customers. If your wholesale requirements are very simple, this could be a good option for you.
Using a Shopify App
There is a range of Shopify Apps available that add wholesale functionality to your regular Shopify store. They differ in the collection of features and the versatility offered, but a few good choices are the Wholesale Club and Bold Custom Pricing. To decide which one is better suited to your needs, it is a good idea to compile an outline of how you would like your wholesale website to function, and then see which application better fits your requirements.
This choice allows you to sell to both trade and the general public from a single outlet, but wholesale buyers would need to sign in to your website to see the choices for trade pricing.
Why do you need to use this alternative
- It will let you sell from one site to both trade and retail, so you only have one site to keep up-to-date and maintain.
- Offer your wholesale customers their own personalized price list or offer them a ‘group’ discount.
- Both apps offer you a broad variety of wholesale choices to help you customize your platform.
Why this alternative shouldn’t be used
- It can be difficult to customize the apps properly.
- This approach does not give you absolute versatility concerning shipping costs, setup of VAT charges, etc. And some of that’s shared with retail customers.
For whom is this a reasonable option?
A merchant who wants the opportunity to sell from a single site to the trade and the public but who does not want to have to handle more than one site.
A separate storefront
The best option for ultimate control of your wholesale channel is to set up a separate Shopify store just for your business customers. This allows you to completely tailor the store to the trade, from the messaging and images that are used throughout the site to the way you set up delivery and tax options.
Your wholesale store can sit on your own domain or your retail store’s sub-domain, and you can use a wholesale app to enhance your options (as mentioned above). A good Shopify developer can also help you update the site so that pricing remains hidden until you log in without having to password-protect the entire site.
Why do you need to use this alternative
- If you want to give your wholesale customers a different user experience as compared to your retailers.
- You want a fine level of tax control, shipping options, etc …
- You want only content to incorporate trade within the site.
Why this alternative shouldn’t be used
- You don’t want 2 sites to be maintained.
- You are on a tight budget and want your ongoing costs to be kept low.
For whom is this a reasonable option?
A company that does (or seeks to do) a lot of wholesale trading and needs the best possible service for its commercial customers.
Wholesale Channel
If you are on Shopify Plus, you can then use the Wholesale Channel to expand your business into the B2B market. This will enable you to synchronize your business orders with your existing store, offer wholesale-specific pricing, set a minimum number of orders, and more
The Wholesale Channel creates a new password-protected website that can be accessed by your business customers to access a customized product catalog and its price list. It uses your existing store as a basis for this website, but then you can customize it for your business clients.
Why do you need to use this alternative
- You are on Shopify Plus or considering using it.
- It syncs your existing retail storefront with orders, inventory, and customers.
- It gives you a lot of control over what is accessible to your trade customers and the pricing they qualify for.
- It has good tools to get your trade customers invited and managed.
- This will work with the same integrations if your main site is integrated with your back end systems such as CRM or OMS.
Why this alternative shouldn’t be used
- Wholesale Channel websites are not indexed by search engines and they don’t feature in Google’s search results.
- You are not on Shopify Plus and are currently making sufficient revenue through your site to justify the costs.
For whom is this a reasonable option?
Retailers who use Shopify Plus and want to open an integrated B2B site with their existing Shopify site.
3. Figure out the following issues
Type of Payment
Payment conditions are simple for most public-facing stores: payment is due at purchase, either via PayPal or a credit card.
Although this might be perfectly acceptable for your wholesale offering, other retailers may request for Net 15 or Net 30 terms of payment. This means they pay 15 to 30 days later, rather than paying at checkout — often by direct deposit, wire transfer, or other “offline” form.
If sending an order until it’s paid off sounds dicey, follow those instincts. You don’t have to provide every customer with net payment terms. A successful wholesale approach helps you to customize the terms of payment for each client. For the best, most trustworthy clients you should sell Net 30 and allow the rest to pay at checkout.
Tariffs
Let’s start with fundamentals. There’s one golden rule when it comes to selling wholesale online: Don’t undercut your retailers.
That means the price for your goods that you charge wholesale consumers will still be less than what you charge retail customers for. For instance, if you sell a t-shirt to a regular customer for $30 then you might sell it to a wholesale buyer for $15 or even $10 to make sure they make a profit.
Just pretty simple, right? Here’s where it gets tricky. Many wholesale stores offer tiered or dynamic pricing, meaning various customers get different discounts. For eg, a gold-level customer could get 50% off the retail price, while a silver-level customer could get just 40% off the retail price.
Plus, you do not even want to provide a flat percentage discount in the store for any rate. At SKU level, you may want to offer some customers discounts (i.e. on a per-product basis) and others deal on one collection but not another.
Small Orders
If you are trying to sell your goods at half the normal cost, you have to know that you are going to sell them in bulk.
Some of the easiest ways to achieve this is by implementation of a minimum order rule. It ensures that by making an order, wholesale customers must purchase a certain amount of the goods — or pay a certain amount of money —. For eg, if you’ve got a minimum order of 20 items or $200, your buyers need to purchase at least 20 items or pay $200 to purchase from you.
Re-ordering
One of the other advantages of discount pricing is that if you have a happy buyer, they are likely to come back for more – and much earlier than a typical user.
Rather than make frequent shoppers leap over and over again through the same hoops (search > filter > commodity > add to cart > cart > checkout), it’s a brilliant idea to build a single inventory page that functions as a sort of order.
Below is an example of using the Wholesale Club Shopify application:
All the goods are listed as you can see, and wholesalers can easily add items (and quantities) to their cart without leaving the tab. Simplicity is definitive. You may presume that these consumers already know what they are looking for, and need just a seamless way to find it.
4. Advantages of Selling Wholesale
Take these important implications of opening a shop wholesale:
- You send huge orders to a limited number of consumers while you market the wholesale. Even though there are few clients you have a good opportunity to develop relationships with them which is not possible with hundreds or thousands of supermarket
clients. - Wholesale consumers with recurring orders will provide you with more stable revenues.
- You can restrict discounts to different items or collections.
- Dealing with fewer clients could save you on customer service. Even the rates of delivery and distribution will be much smaller.
- Volume selling will help you to maximize the volume of your supply and reduce the expense of the products sold. This would make you a higher return for all of your profits.
- If you sell online you do not have to think about collecting sales taxes. That’s the Wholesale Customer’s responsibility.
- Wholesale customers ask fewer questions than those of supermarket companies. Your end users want to learn how the product is going to delight and benefit them. Wholesale customers want to know how good the products can be priced in their supermarkets
and eCommerce stores. Wholesale will work well for you, if you prefer selling to this crowd. - Selling wholesale will extend the reach of your market. If you have a great product, but not a lot of online exposure, wholesaling will expand your scope. Your wholesale customers will do a lot of marketing for you.
Wholesaling does not eliminate all the marketing pressure from you. You ‘re also going to want to advertise your goods via social media and other platforms. The buzz you create to get consumers interested will tell other retailers that your product is on demand. That’s going to help persuade them that this is a good option for their shops.
5. Disadvantages of Selling Wholesale
You should not start a wholesale store with Shopify if:
- Your margins are slender. Your wholesale customers are forced to make a markup of 50 percent or more. If you cut the bone to sell wholesale, there may not be enough profit left to make it worth your time.
- The supply chain is still unpredictable. If a business places a sales order, it’s counting on you to deliver it on time. If you can’t supply the products they ‘re relying on, you could end up with cancelled orders and dissatisfied wholesale
customers.
Another consideration when you use Shopify wholesale is where your products will be sold online. Is the competition going to affect your retail sales in your store?
On the other hand, selling wholesale might be great for your business. You may also conclude that you prefer wholesaling to retailing. You might end up with a company focused on selling your goods to other retailers.
6. Advantages of Selling Wholesale on Shopify
You may already be marketing your goods to wholesale customers. Shopify Wholesale makes it a lot easier for you. It can be difficult to open both wholesale and retail channels online and keep the two apart. Many of the businesses that do so tend to use a completely different system for wholesale sales. Shopify wholesale enables you to reach retail and wholesale customers on the same platform.
When you sell wholesale to Shopify, you can monitor all your inventory in one location. You can be paid by your wholesale customers through Shopify. You don’t have to chase after late invoices again.
In addition, Shopify wholesale enables you to have a wholesale order center that is open 24/7. Customers can place orders even when the office is closed. It is especially useful if you are wholesalers to companies in certain time zones.
You’ll find that selling wholesale makes order fulfillment a lot simpler, too. You can ship whole pallets, containers, or big boxes. It’s cheaper to pick and carry than a lot of small orders.
If you’ve never tried selling wholesale before, Shopify wholesale is a perfect way to get started. If you’re concerned about overall sales, you may want to invest in Shopify Plus. Yet that’s not what you have to do to open a wholesale store on Shopify. There are a few other options to sell wholesale on Shopify.