What is B2B Wholesale eCommerce & How to start it?
Updated on November 3, 2022 in Ecommerce by Nishant Shrimali
B2B wholesale eCommerce is all about the product, pricing, and branding. There are multiple formulas on the internet sharing “the right way” to scale a wholesale eCommerce, but most of them lack a simple understanding of the customer.
What is the customer looking for in a wholesale eCommerce?
Most importantly the variety of products. Second, products at the best price. And finally, a trustworthy platform that is able to help the retailer with quality, shipping, and safe transactions.
While you might already have some idea about the product that you wish to sell wholesale, it is very important the right way to do it. So, here is a guide that you can rely on. We are starting from the basics and sharing:
- What is Wholesale eCommerce?
- Benefits of being an eCommerce wholesaler
- How to start wholesale eCommerce of your own
- Challenges of starting a B2B wholesale eCommerce
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Let’s get started.
What is Wholesale eCommerce?
Wholesale eCommerce is a business-to-business model where rather than selling one product at a time, you sell your products in bulk to retailers, suppliers, and even other eCommerce.
You sell goods to retailers who further sell their products to the end customers. Here you are in direct contact with the manufacturer of the product and hence it is easy for you to be the intermediator between the retailers and source.
This automatically increases your average cart value hence resulting in a bigger profit than retail eCommerce at a time. What are the other benefits of being an eCommerce wholesaler? Well, we got you covered.
Benefits of being an eCommerce wholesalers
There is no doubt that being an eCommerce wholesaler, you enjoy a different set of privileges that retailers don’t. Here are a few that you might be interested in learning about:
Low Budget – High Profit
When it comes to the benefits of running a wholesale eCommerce, gaining profit from selling products in bulk is obvious. But it is also important to note that wholesalers are in direct contact with the manufacturer.
That means you won’t have to pay any additional cost and you will be able to source products in bulk at a much more efficient cost. This increases the profit margin as well as the average cart value of your eCommerce.
Handling fewer orders at a time
Running an eCommerce means handling each customer and their order very carefully. In the case of retail, the number of customers is often more than the wholesalers.
While this doesn’t ensure more gross profit, but it ensures the load of handling all the orders very precisely.
As an eCommerce wholesaler, you will enjoy the privilege to handle fewer numbers of bulk orders ensuring a good profit while comparatively facing fewer customers.
Less Competition more customers
In any and mostly every niche of products the number of retailers is exceptionally more than the retailers. This creates a scarcity of wholesalers in the industry giving you an advantage to easily stand out.
This also reduces the acquisition cost of your customer, as you will be spending less on marketing in acquiring new clients.
With less competition and more customers, it becomes fairly easy for you to grow your brand.
How to Start Wholesale eCommerce?
And we are finally at the most important section of this guide. Running a B2B wholesale eCommerce is fairly not that competitive, but it surely takes a lot of preparation to start. Here is an overview of steps that you are going to follow:
1. Choose the niche that you understand
The most important step in the whole process of starting wholesale eCommerce is choosing the perfect niche. It is easy to get attracted toward big profit margins, demand competition, etc but if you have no understanding of the industry, you are likely to fail.
To be honest the more practical experience you have in the industry, the better it is for you to make your way to the top. Not only do you understand the working, but also the pain points of your customers.
Most importantly you have a deep understanding of your product. You are easily able to differentiate between products that are really valuable and the products which aren’t going to make a major difference between sales.
These little insights play a huge role when you are interacting with B2B clients and can help you land your first few clients even when you are just getting started.
2. Find a reliable supplier
Now that you know what industry you are working in and what kinds of products are you going to wholesale, it’s time to find a supplier.
It is very important that you find a reliable supplier when starting a B2B wholesale eCommerce. Unlike retailers with fair amounts of options to choose from, you will face a scarcity of manufacturers for the products.
You will need a supplier that has a lot of options to choose from and is able to supply you at the price.
Moreover, if possible have at least have more than 2 suppliers in your contact and stay in touch with them regularly. This will ensure a backup in case of scarcity of a product.
As a wholesale eCommerce, you need to ensure that your products are available in bulk.
Having reliable suppliers and manufacturers can surely ensure that by fulfilling your requirement of the products.
3. Sort out inventory and shipping
The next step in the process of starting wholesale eCommerce is preparing an inventory and shipping your products. As you are handling bulk products, you need to ensure that the inventory is able to hold the products carefully and possibly for a long period of time.
As a B2B eCommerce, you must take the inventory cost into account very carefully and ensure it doesn’t drag you under loss.
You must also ensure that if the inventory is closer to most of your target customer locations or the mode of transportation as it will drastically reduce the cost of shipping.
When you are starting, you can also try contacting your supplier to directly ship the product to the customer, rather you holding it first. This might need some talk but if done, you will save a lot when it comes to inventory costs.
4. Focus on pricing
Quick question. What are the two factors to consider when finalizing the pricing?
- Is your retailer/customer making a profit selling your product?
- Will you be able to make a profit selling products to retailers?
Sure there are multiple factors and costs that must be taken under consideration. They are a must and should be done very carefully. Saying that one must also ensure that the pricing of your products is such that it benefits the retailers as well.
This will play a key role in attracting customers as well as keeping them for a long time. Be clear with the pricing as well shipping cost.
Do not add hidden fees and always ensure to add a contact button/form so that your customer can request a special quote based on the quantity.
The more transparent your pricing is the easier it is to grab the attention of your customers.
5. Work on your branding
We are finally working towards building an eCommerce. In one of our recent articles, we have shared some of the best B2b eCommerce software solutions that will help you will all the tools you need to start a wholesale eCommerce.
In eCommerce, your online presence will be everything. The name of your store, the logo of your eCommerce, the product images that you use, that color palette that you choose, and every little detail that makes an impact.
When running an eCommerce store branding is all about presenting your store the way you want your customers to remember you. So make sure you spend time creating a brand kit for your b2b wholesale eCommerce and follow it across all the online presence.
6. Create online and offline assets
The supplier is done, the pricing is set and now the website is ready. What’s next? The assets that help in converting your potential customer into loyal customers.
These assets are catalogs, line sheets, wholesale portals, etc that can help you stand out.
These are also the tools that you can use to attract new customers, generate leads and stand out as a brand. All are created to help your customers manage their orders, and learn more about your products.
As a B2b wholesale eCommerce, you need to stand out as authoritative and informative. The more content you produce the easier it is for you to attract and convert your client.
7. Reach Out
Last but not the least, it is time for you to reach out to your potential customers. One must not fall into the trap of opening the store and waiting for clients to come running to you.
You will have to make an effort to reach your target audience and attract clients based on your target audience.
PixelPhant has always shared some great insights on how to attract customers and scale your eCommerce with the right practices.
The more targeted it is, the better results will you get.
Challenges of starting a wholesale eCommerce
If you have been keeping up with the article, you will know that when it comes to starting a wholesale eCommerce, small details can make a huge impact. Just like adding great product images can help you improve your conversion, there are a few things that you find challenging when running a b2b wholesale eCommerce. These are:
Unmanaged Inventory
It is obvious that you will be sourcing and selling products in bulk. Moreover, it has already been established that you need multiple products (rather than niching down to products).
This essentially means managing inventory will surely be one of the most challenging parts of your running a wholesale eCommerce.
To stay ahead of it, do invest in inventory management technologies as this will reduce a lot of unnecessary and repetitive work that consumes a lot of time.
Irregular Cashflow
Many B2B wholesalers have stated inconsistent cash flow as the most challenging part of starting a wholesale eCommerce. Sure, the products sold in bulk can have a great profit margin, but it’s not always true.
The profit margins in b2b wholesale eCommerce are often blurry and negotiable. This added with the inconsistency of cash flow increases the cost of running a wholesale business.
Keeping up with customer demand
The next common challenge is keeping the products, and inventory updated with the products that are catching trends and are in demand among the retailers. If your customers can find all the products in one place, they will always prefer your store over the competitors.
This becomes really challenging in fast industries like fashion to keep the inventory updated. Uncertainty of trends makes it hard to learn about the products to source and you will always need to keep an eye for the right manufacturer.
And to Wrap Up
Challenges are meant to be conquered. If you have a good understanding of an industry with reliable suppliers in your contact, most of your challenges will be resolved.
Your B2B wholesale eCommerce will grow and connect with the right people when you are all set to connect with your customer.
To do so the following guide will surely help you. You can learn more about eCommerce marketing, product image editing, and sales through PixelPhant blogs. For now, we highly recommend you read How to create a brand story of your eCommerce? This will help you with your branding and how should you present your brand authentically.
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