Starting a wholesale business from home

In the past, running a wholesale business might have been limited to print catalogs, cold-calling or door-to-door sales, and data entry into spreadsheets. Now there are alternatives to managing your business and getting your products out there, such as starting a wholesale B2B e-commerce business.

As the world becomes more reliant on the convenience of the internet, more companies are expanding their business online. The same goes for the U.S. B2B e-commerce industry, which is projected to reach a worth of $1.8 trillion by 2023. Now is an excellent time to take advantage of this business opportunity. However, starting a wholesale business can be daunting—unless you have the right plan and tools to help you.

This guide for small businesses can help you figure out how to start a wholesale business from home and break into the B2B e-commerce market successfully. Need help with one specific aspect of starting a wholesale business? Use the links below to navigate to the sections that are most relevant to you.

• What is a wholesale business?
• How to start your own wholesale business onlineEstablish a business plan
• Develop a pricing strategy
• Make sure you have a high-quality website
• Choose the right platforms to sell on
• Optimize product images and descriptions
• Ensure you know how to handle inventory and supply chain management
• Put the right systems in place
• Manage your B2B wholesale business with QuickBooks Commerce

What is a wholesale business?

Before we get into the details of how to start your own wholesale business, it’s important that you understand what you’re getting into. There are several key aspects of this business model that differentiate it from others:

• Who do wholesalers sell to? Generally, wholesale businesses sell to other retailers. This means they’re typically run as B2B, or business-to-business, companies. However, wholesalers can sell directly to consumers as well. This is less common because selling in bulk usually requires a much larger financial investment from the buyer. And most individuals don’t have use for such large quantities of a single product. Costco is a good example of a B2C, or business-to-consumer, wholesaler.
• How do wholesalers sell products? Instead of selling products individually, they are sold in bulk. Bulk simply means selling in large quantities.
• Where do wholesalers sell products?  Traditionally, wholesalers have operated by cultivating a reputation and building relationships in their industry. They would often use mail-in-ordering and sales calls to close deals. However, today, more and more wholesalers are moving to e-commerce and selling on online marketplaces like Amazon.
• How are wholesalers profitable? Wholesale businesses buy goods directly from the manufacturer or distributor at a low cost. They then turn around and sell those products for more to their customer base. These retailers save by buying in bulk and make a profit when they mark up these products and sell them individually to consumers.

These guiding principles should help you put a strategy in place to make your wholesale business successful.

How to start your own wholesale business online

It’s one thing to have your end goal in mind and another to take the right steps to make it happen. If you’re venturing into wholesale B2B e-commerce, there are some essential steps you’ll need to take to make the process as smooth as possible.

Whether you’re new to the industry or an experienced wholesaler looking to start selling online, here are a few essential tips that can help.

1. Establish a business plan

Having a business idea is one thing, but executing it takes strategy and hard work. If you’re starting an entirely new business venture—meaning you’re not adding e-commerce wholesaling to your current operations—you’ll need a business plan. Beyond your business name, you’ll need to define your product offering and all the ins and outs of how you’ll run your business. Some key aspects of a business plan for wholesalers include:

• What will your product line include?
• Where will you get your new products?
• Where will you store inventory?
• Where will you sell your products?
• How much will your products cost?
• What’s your plan for wholesale inventory management?
• How will you market your wholesale business?
• What’s your target market?
• How much can you afford to spend on warehouse space?
• How will you manage your supply chain?
• Who will oversee the financial management of your business?
• Will you need startup capital?

Having clear answers for these questions will help you get your wholesale B2B business up and running. You should be able to find free business plan templates online to help you get your plan outlined.

2. Develop a pricing strategy

Pricing is an essential component of making sales, especially online, since it’s easier than ever for buyers to compare pricing between competitors. Not only do you need to consider how your competitors are pricing their products, but also how much you need to make to maintain profit margins. Being able to turn a profit on the products you’re selling to retailers at a wholesale price is imperative to make this business model work.

Note that strategies traditionally used for setting retail prices will be different from those you should apply to your wholesale products.

3. Make sure you have a high-quality website

One of the most important things you can do as an e-commerce business of any kind is to ensure you have a high-quality website. This is one of the main places that current and new customers will interact with your brand, and often where they get their first impression. Here are just a few things you should prioritize when creating your e-commerce site:

• Clear, easy-to-use navigation
• Clean, mobile-friendly design
• Attractive branding
• Convenient payment processing
• Quick ways to contact your business
• Well-written copy and imagery

Making your website user-friendly is an essential first step.

4. Choose the right platforms to sell on

There are many options nowadays when it comes to where and how you want to sell online. Of course, there’s your own B2B e-commerce site. But there are also a variety of other e-commerce platforms out there that you can leverage to make more sales. For example, there are marketplaces like Amazon Business, eBay, and Alibaba, just to name a few.

Depending on your business model, you might opt for a specific marketplace. For example, Amazon Business may be a good fit if you’re a wholesale distributor or manufacturer selling to businesses in the United States. On the other hand, Alibaba is best suited for large-scale manufacturers that are unconcerned about strong brand identity and looking for economies of scale. Then there are also niche marketplaces to consider for specific types of goods. If you operate in a highly niche industry, consider doing some market research to find out where your competitors are selling.

If B2B marketplaces aren’t right for you, you can look into setting up a private B2B portal on your site. The benefit of marketplaces is that they have an existing audience, yet you’re competing with many other products. If you use your own site, you’ll need to establish a marketing strategy to promote it. This may include using Google ads, email marketing, social media, and even offline opportunities like trade shows. One of the main advantages of using your own e-commerce site is that you’ll have full control over how products are presented.

Generally speaking, a combination of your own e-commerce site and several other sales channels is ideal so you can capture the most sales. However, when you’re just starting your wholesale business, it’s important to expand carefully so you don’t become overwhelmed. Start with one or two platforms and build from there once you’re sure you can manage it.

5. Optimize product images and descriptions

When you’re selling online, potential buyers are relying on the images and descriptions on your site to help them make an informed purchase. Whether it’s on your own e-commerce site or a product listing on a platform like eBay, high-quality, informative images and descriptions are a must.

For starters, make sure your products look their best in the photos on your site. That means good lighting and a uniform background (ideally white) to ensure your products are in the spotlight without any distractions for the viewer. Additionally, including multiple shots of your product from different angles—front, side, and back—is important. Potential customers appreciate having a clear idea of the product they’re buying, especially when they’re going to buy a lot of them.

You also want to provide accurate descriptions of your products that cover all the necessary specifications, such as materials, measurements, and the country of origin. You may also want to outline any shipping restrictions, your minimum order quantity, and other important points of note in the description.

6. Ensure you know how to handle inventory and supply chain management

Inventory plays a critical role in any wholesale business. If you’re entering the B2B wholesale market, you need to be able to handle large amounts of inventory efficiently. Streamlining supply chain management is critical for moving goods through each phase and into buyers’ hands.

Here are some key things you need to consider when it comes to inventory and supply chain management as a whole:

• Where will you get your products? Sourcing quality products needs to be a top priority. Otherwise, you won’t have customers to sell to.
• Are the wholesale distribution businesses you’re buying from reliable? You need to be able to count on products showing up in a timely fashion when you place purchase orders.
• How will you ensure you always have enough inventory on hand? Establishing reorder points that consider lead time, regularly checking your available-to-promise ( ATP ) inventory, and performing inventory analysis are all essential for good inventory management.
• How will you handle shipping and fulfillment? Consider where fulfillment will take place, expected fulfillment timelines, shipping options, and other factors that affect how your products get to your customers.
• What system will you use for inventory management? Are you going to manually track inventory with spreadsheets, or are you going to use the latest technology to automate these processes?

Figuring out how your business will handle inventory management and order fulfillment should be a top priority because it directly influences customer satisfaction.

7. Put the right systems in place

Today, there are more tools available than ever thanks to new technological developments. From inventory management and enterprise resource planning (ERP) to accounting software, there are so many systems designed to help improve business operations. Having the right systems in place is essential for helping you make your wholesale business run as efficiently as possible. Here are a few things to consider when you’re trying to find the tools you need to support your wholesale business:

• Can it automate the key tasks you need it to? These tools should take care of repetitive, time-consuming tasks for you and streamline workflows; otherwise, they’re not doing their job. For example, if you’re looking for an inventory and order management system, does it automate inventory tracking, reordering, and updating inventory levels across sites? Or, if you’re looking into accounting software, it should track income and expenses for you, generate invoices and financial statements, and other key financial tasks.
• Does this system allow for integrations? Integration allows you to sync up various aspects of your business, saving you time and effort. By linking up different business applications like accounting and fulfillment, you’ll also be able to run your business more smoothly and deliver a better customer experience.
• Is it easy to use? When you implement a new system, you want it to help, not hinder your business tasks. Any tool you start using should be quick to pick up and easy to train your employees on.
• Does it have advanced reporting? Depending on the tool, it should provide insights into business performance. For example, how much time employees are spending on tasks or the current health of your cash flow. Reporting can help you track sales trends and gain key insights into your business activities. Having information like which of your products are popular and which barely sell is critical to making sound business decisions. QuickBooks Commerce is a platform that has been designed for businesses like yours and has the tools you need to succeed, including the functionalities listed above. You can manage your multi-channel wholesale business in a well-organized dashboard that keeps all the information you need up to date and in one place.

With a system like QuickBooks for wholesale businesses, you can save time and money and focus on growth.

Manage your B2B wholesale business with QuickBooks Commerce

Take control of your B2B wholesale business, from inventory management to order fulfillment. Sign up for QuickBooks Commerce today and see how it can help you run your wholesale business. You’ll benefit from an intuitive interface, extensive automation, and streamlined management of your sales channels.