Many soap & bath product businesses find that the fastest way to scale their business is through wholesale distribution. This means that another business (typically a retail store) buys a large quantity of products from you, and resells them to their customers.
Are you interested in learning more about selling your products wholesale? This post outlines 10 steps to take to become successful in this sales channel.
- Your Viewpoint on Selling Wholesale is Critical.
When you meet with a business about potentially reselling your products, your tone & body language will speak volumes before you have a chance to talk about anything.
Are you you looking to establish a partnership? One where you and another business split the work? (You produce the products, and they sell them one at a time to customers)
OR, do you think that the business is doing you a favor by carrying your products?
OR, worse still, are you getting ripped off by selling your products half price?
The two latter perceptions will set you up to struggle in wholesale sales. The essence of the relationship is a partnership, and that understanding will allow you to approach the meeting from the correct viewpoint.
2. Your Prices Must be Profitable at Wholesale
Many soapers (or other product producers) begin their businesses by selling directly to consumers (aka retail sales), and set product prices to be profitable at retail. However, when selling wholesale, your new partner also needs to have their expenses covered within the retail price. Your wholesale price has to allow for that (typically wholesale price is 1/2 retail price).
In order to set profitable prices at wholesale, your pricing must allow for all expenses that your business has, now and in the future. This pricing course will show you how to establish prices that will sustain you as your business grows.
3. Create a Linesheet
A linesheet is a fancy word for a price list. Some businesses create elaborate, gorgeous linesheets with professional photographs and graphic design elements. You may want something like that when you pitch large retailers, however, in the beginning, you don’t need that. A list of your products and the wholesale price are sufficient.
I also recommend including information about how to purchase products from you. Is there a minimum order amount? Do people have to order in certain product quantities? How do you ship or deliver? When do you you get paid?
4. Should You Send Product Samples?
It is tempting to put together a collection of products and drop them off at a store that you would like to carry your products. I understand the temptation – I have done it. However, it rarely works. People are going to purchase your products wholesale because they like you and want to work with you. Your products are important, obviously, however, they are actually not as important as YOU.
I suggest scheduling a meeting with the buyer, and bring samples with you to the meeting. Don’t simply drop them off with a note and expect a call (it is more effective to focus your attention on getting the meeting before you share product samples).
5. Confidence
People want to work with people who believe in themselves. If you walk into a meeting terrified, looking down at the ground with a shaky voice, do you think that someone will want to work with you?
Your confidence in yourself, and in your products, is KEY. You must believe that you are an amazing business owner who is on her way to reaching her goals.
Now, confidence is not the same as cockiness or arrogance. Be sure that you project the genuine sentiment that will make a retailer eager to work with you.
For some of you, this is tough. The idea of meeting with an account makes you anxious and nervous, but there are ways to work through this. In my coaching program, I role play with my clients. This means we act out what a sales meeting would be like, which takes some of the anxiety and fear out of the experience. Once the experience feels familiar, some of the fear of the unknown is removed.
6. Leadership
If you approach the meeting with the intent of determining what is best for the prospective account and NOT focused on what is best for YOUR business, you are in a place of leadership. Don’t encourage a store to carry products that you do not truly believe will sell.
Leaders also understand the nature of business relationships. The buyer at a wholesale account is not your friend. Don’t bring up the fight you had with your spouse, or complain about traffic or whatever other stress you experienced that day. Ask the prospect about themselves, but leave your personal drama at the door.
7. Ask for the Sale
Experienced sales people know how to ask for the sale. This means that during the meeting, they ask the buyer to purchase their products (provided they are a good fit for the account – see #6). If you are not comfortable doing this, learn how.
8. How to Find The Right Wholesale Accounts
Without a doubt, the best way to do this is to define & understand your target audience. Your SPECIFIC, narrow target (not women 25-54 or people who like natural products). Read this if your target does not EXCLUDE the vast majority of people.
Once you define your specific target, find other businesses or retailers that sell to the SAME target. If you start there, you will be very likely to find accounts where YOUR target will buy your products.
9. You Need to Get Paid
As a business, I find it tough to work with consignment arrangements. There are going to be exceptions, and I know of a few soapers who have have thriving businesses using this model.
BUT, when you are a small, growing business, cashflow is KEY. When you make products and deliver / ship them to an account, you need to get paid so that you can funnel that money through your business. With consignment, when you deliver the products, you no longer have inventory, and you don’t have the money. Hopefully the products will sell quickly, but that is out of your hands. You typically will have NO role in when the product sell, which means you wait until you get a check.
Focus your attention on wholesale accounts where you get paid when the products are out of your hands (shipped or delivered). Consignment may be necessary for $6,000 art sculptures, but not for $8 soaps.
10. How Do You Approach a Business about Wholesale?
You just do it. This is called prospecting and there are many ways to get in touch with a business, which means there is not ONE perfect way. With the clients that I coach, we go over contacting business through email, social media, phone and even visiting in person.
When you are a small product business (1-2) people, looking to scale to the point where you can earn a legit salary, your time is your most valuable asset. This is why wholesale is such a lucrative option. You make the products, and then pay another business to sell the products for you.
If I made 500 soaps and had to sell them ONE-AT-A-TIME, do you know how much longer that would take vs. selling all 500 at once? If your products are profitable at wholesale and you have a good system for finding great accounts, this is your pathway to building a financially lucrative business.
If you want to find out if my system would work for your business, and if I am the right person to help you reach your goals, let’s talk. Here is the link to set up a free strategy session.
Do you have any tips to add about selling wholesale? I would love to hear them! Please let me know in the comments.
