The advantages are obvious: higher order volumes, less time spent on manual input and administrative tasks. As a wholesaler, you can expand into this huge market and open up new sources of income for your business.
So how can you take advantage of this development? This guide will walk you through how wholesale ecommerce works, show you how to find a suitable wholesale ecommerce platform , and give you tips on how to create your online wholesale business.
How Wholesale E-Commerce Works
The most common form of wholesale trade is between producers (you) and retailers. However, there are also wholesalers who sell to other wholesalers, singapore email list as well as wholesalers—such as Costco—who sell directly to consumers.
The biggest benefit of wholesaling is the reduction in business costs. By selling goods in bulk, you benefit from larger orders and lower marketing expenses, which usually leads to higher profits per unit. It also expands your distribution channel.
When you think of wholesale e-commerce, build an email campaign for seasonal marketing you often think of giant platforms like Alibaba. Wholesale is often viewed as a traditional sales channel with a less than ideal shopping experience. But technology and changing B2B buying behavior have revolutionized wholesale e-commerce.
Today, cyprus business directory retail businesses sell wholesale to drive growth without huge capital investments or taking high risks. With the right B2B ecommerce platform , merchants looking to enter wholesale can automate the entire process from sign-up to checkout, offer special wholesale pricing, and more.
B2B wholesale versus retail e-commerce
Now that you know how a wholesale eCommerce website works, let’s look at the main differences between wholesale and retail eCommerce. The main differences are:
- target group
- order volume
- pricing
- relationship management
Target group
Wholesale companies sell their products to other businesses (B2B), including manufacturers, distributors, retailers or other wholesalers. These customers usually buy in large quantities to resell the goods to final consumers.
For example, a clothing manufacturer sells large quantities of T-shirts to a retail chain through its e-commerce platform.
Retail companies sell directly to consumers (B2C). This is usually done in smaller quantities, often with a wide range of products to meet the different needs of each consumer.
A retail example is an online clothing store that sells individual T-shirts directly to consumers through its website or app.
Order volume
A wholesale e-commerce company handles bulk orders. Often, they are willing to offer large quantities at discounted prices based on the principle that the more you buy, the lower the cost per unit. An example is a restaurant supply wholesaler that sells bulk packages of cooking equipment to food service establishments.
Retailers sell products in single items or in smaller quantities, depending on the needs of each customer. For example, an online kitchen supply store that sells a single set of cooking utensils to home cooks.
Pricing
Wholesalers sell their goods at lower prices per unit because they sell in large quantities. Lower prices are possible because the cost of selling a large quantity of goods to one buyer is lower than selling individual units to multiple buyers. An example would be a wholesaler selling 100 LED light bulbs to a hardware store at €5 each.
Retailers who sell directly to consumers have higher prices per unit because they have to cover the costs of storing, marketing and selling the items. An example is an online lighting store that sells a single LED bulb to a customer for €10.
Relationship management
Wholesale eCommerce businesses maintain long-term relationships with their customers. Since they typically require ongoing deliveries, customer retention is crucial. Wholesale eCommerce platforms offer features that foster healthy relationships, such as customized pricing for specific customers, order history tracking, reorder features, and more.
While they value repeat business, retailers often deal with one-time or occasional purchases from customers. Retail e-commerce platforms often focus more on features like personalized product recommendations, customer reviews, and easy return processes.
“Don’t fall into the trap of thinking that B2B is fundamentally different than B2C e-commerce,” says Bryan Eisenberg, co-author of Be Like Amazon: Even a Lemonade Stand Can Do It . “There are nuances that depend on the technical know-how of your customers. But at the end of the day, we’re still selling to people.”
“Expectations in e-commerce are set by others outside your industry, like Amazon.com. Use video, lots of images, reviews, and if possible, live chat.”