Marketing April 12, 2013 Last updated September 18th, 2018 8,930 Reads share

6 Awesome Benefits Of Wholesale Marketing

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Wholesaling has truly hit it big. In the contemporary Information Age, nearly anyone can find the best price for any product with the use of mediums available at their fingertips. Online resources (particularly search engines) let consumers compare and contrast between various suppliers and directories, thereby creating a balance between services and affordability.

Once, this sort of inside information was only available for business owners. The Internet has changed all that, as regular consumers can now shop using various websites.

Wholesale marketing and how it benefits you

Wholesale marketing is when a producer or manufacturer of a product or good sells its supply to a company (the wholesaler), who will, in turn, sell it to the end consumer, possibly even under the brand name of the company.

This system has a variety of advantages for you, especially if you are thinking of investing in it. Let’s take a look at some of them below.

# 1. You’ll save money and make more money.

Wholesale marketing involves buying in bulk, direct from the manufacturer, as opposed to going through a middle person. The latter will result in you eating the markup fees by the third party, whereas the former will have the items priced at the manufacturer’s own rates.

To cover for this, the producers will often require that you buy the goods in the tens of thousands. But if you average the cost of each item, you will see savings for up to 50 percent than if you had bought from a third party.

You can recoup the costs by providing your own markup. You may have heard of wholesalers who have marked increase in profits practically immediately after they start. That is possible if you do a considerable amount of research, so you can base and adjust your prices on the influx of the industry.

# 2. You’ll create and propagate your own brand.

As mentioned above, wholesaling will usually entail the goods being rebranded under the wholesaler’s own umbrella. Real-world examples include grocery or department store items running under the store’s own brand, like Kroger Soda or Target Table Napkins.

But of course, these big chain stores don’t create their own foodstuffs or party supplies—they purchase them wholesale and then put their own name on it. That way, their brand gets reinforced, creating advertising in the very products that they sell.

As a prospective wholesaler, you’ll have the opportunity to do that as well. Deals between manufacturers and buyers often include this clause. In the consumer’s eyes, the manufacturer’s role will be all but invisible, and that of the wholesaler will be the most prominent.

No matter what you’ll be buying—USB flash drives, ballpoint pens, LED televisions—you can stamp your name on it and ignore the manufacturer entirely. With a few select and quality items, you’ll be able to establish a strong brand.

# 3. You’ll familiarize yourself with industry knowledge.

As you eliminate the degrees of separation between yourself and the actual source of your goods, you will be that much closer to understanding the workings in the industry of that particular item.

  • Details–such as the flow in the supply chain, who has the lowest prices, and the external operations of the various companies—are just some of the things you’ll be privy to, with a little observation and savvy.
  • If you source your products from multiple suppliers, or have discarded an ineffectual supplier for a better one, you’ll be able to see just what the differences are between the two of them.

This knowledge could be useful in the future. Who knows? As your business finds greater success, perhaps you’ll be able to become a manufacturer yourself.

# 4. You’ll build a network of suppliers.

Wholesaling naturally leads to contacting various manufacturers to see whether or not you will purchase from them. You can correspond with the manufacturers directly. But in this early stage, it is advisable that you join a network of affiliates who already have an established wholesale directory.

To get in good with certain suppliers, this network will be able to provide you with the clout that you probably don’t possess yet. This will provide you a leg up with discounts and exclusive access to products, as well as an effective learning environment, so that you’ll learn more about the practice of wholesaling and the products you’re selling.

# 5. You’ll be able to diversify.

This benefit is an extension of several of the previous benefits. While it’s always a good idea to start small, with a choice few items that are always in demand (for this instance, let’s say these are school supplies), it’s never too early to think about expanding.

After your legal pads, pencils, and scissors have gained a foothold in the market, it will be time to expand to bigger but still-related things, such as desks and office chairs. This will lead you to coordinate with manufacturers you previously had no contact with.

As your brand grows stronger, you can try dipping your toes in other products by following the demand accordingly. When you arrive at this stage, you can feel more secure in the knowledge that people are highly likely to purchase your new products.

# 6. You’ll save and make even more money.

If done well, businesses become cyclical. When you reach this point in your company’s life, you have most likely developed a brand popular in your area and have a sizable network of manufacturers to choose from. This would, therefore, give you considerable authority and credibility.

You can negotiate for lower bulk buying rates and charge a premium for your goods—within reason, of course. A good wholesale retailer engenders loyalty between all parties involved. Maintaining that line is tricky but manageable.

We’ve discussed some of the most tangible benefits of switching to a wholesale model—a system that, with hard work and the right people supporting you, will improve your business considerably. Do you have any wholesaling experience? Thought of other benefits that we may have missed? Share your stories in the comments!

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Kyle Kam

Kyle Kam

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