How To Start a Wholesale Business: 2024's Top Products

Starting a wholesale business can be revolutionary for entrepreneurs who prefer focusing on operations or product development rather than direct sales and marketing.

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Utilizing a wholesale business model allows you to delegate customer acquisition to other retail enterprises.

This extensive guide explains how an online wholesale business operates and outlines steps to establish one. It also highlights some of the top products to consider for wholesale sales.

What is a wholesale business?

A wholesale business revolves around selling products in bulk to retailers at a discounted price. Retailers then sell these products to end consumers at a markup.

Understanding the new wholesale business model

The wholesale business model has been transformed recently, partly due to B2B wholesale marketplaces like Faire. These platforms have redefined opportunities for small wholesale businesses by offering access to a global buyer audience.

Whether using a marketplace or your ecommerce site, it’s now simpler than ever for wholesale businesses to sell to both individuals and other retailers. You can create tailored shopping experiences for all your customers, whether they are businesses, resellers, or end consumers.

Sell wholesale and direct to consumers with Shopify

Shopify includes built-in features that help you sell B2B and DTC from one store or platform. Customize the shopping experience for each customer with tailored product and pricing publishing, quantity rules, payment terms, and more—no third-party apps or coding necessary.

Explore B2B on Shopify

How to start a wholesale business online

Contrary to popular belief, starting a wholesale ecommerce business doesn’t require significant cash flow. Today, numerous growth strategies exist, from supplier negotiations to reorganizing your physical and online spaces to accommodate B2B sales.

If you’re considering starting a wholesale business, follow these steps:

1. Decide what wholesale items to sell

Choosing a product niche can seem overwhelming, but establishing selection criteria can help build a profitable wholesale catalog.

Consider these product features when choosing wholesale items:

• Seasonality. For instance, swimsuits sell better in summer, while coats are popular in winter.
• Profit margin. If you source coffee mugs for $2 and sell them for $8, your profit margin is $6.
• Size and weight. Selling small items like jewelry can be cost-effective due to cheaper shipping.
• Purchase frequency. Items like printer ink or pet food are bought regularly, ensuring steady income.
• Competition. Selling handmade soaps with unique scents like lavender can be a strong selling point.

2. Pick a supplier

If you're not producing your own products, building relationships with wholesale suppliers is crucial. A stable wholesale business relies on reliable and consistent inventory.

Consider these factors when choosing suppliers:

• Diversify your supplier base. Don’t depend on a single supplier; multiple suppliers act as backups if one fails to deliver.
• Choose reliable options. Opt for suppliers with a history of timely deliveries.
• Focus on quality. Ensure your suppliers offer high-quality products to maintain your reputation.

Establishing fair rules with your suppliers, such as delivery times and quality checks, is essential for professionalism.

3. Obtain wholesale licenses and permits

Acquiring necessary licenses and permits before starting a wholesale business is vital to remain legal and avoid penalties.

Some required licenses and permits might include:

• Business license. A basic requirement granting the legal right to operate.
• Sales tax permit. Also known as a resale license, it allows tax-free wholesale purchases and tax collection on sales.
• Employer Identification Number (EIN). Necessary for hiring employees, from the IRS.
• Specialized permits. Specific permits for certain products like food items might be required.

4. Set a wholesale pricing strategy

Pricing strategies are crucial for successful wholesaling. You’ll need to price products differently whether selling directly to consumers, small retailers, or large businesses.

Most successful wholesale businesses aim for at least a 50% profit margin on bulk orders and higher margins for smaller quantities.

Healthy pricing strategies allow wholesale businesses and retailers to maintain profit margins.

There are ways to price wholesale products to mitigate risk, such as offering volume-based discounts.

MOQs

Setting Minimum Order Quantities (MOQs) encourages retailers to place larger orders for better resale margins.

MSRPs

Another strategy is using Manufacturer’s Suggested Retail Prices (MSRPs) to maintain stable prices and margins.

MSRPs typically form part of a contract between wholesalers and retailers, ensuring adherence to the suggested price.

While setting these rules, ensure that retailers can also profit from selling your products.

Setting payment terms

Determining payment terms is another key pricing decision. For example, net payment terms allow retailers to pay as they make sales.

Consider setting individual payment terms for different companies, depending on order size and your relationship. Popular terms include:

• None: Immediate payment at checkout.
• Net (period): Payment by an agreed due date, like 15, 30, or 90 days.
• Upon fulfillment: Payment only when the order is fulfilled or received.

Shopify Plus offers various net payment term options, including custom payment due dates.

5. Create a B2B ecommerce website with Shopify

Shopify simplifies selling to businesses online. Its B2B features enable customized shopping experiences for different customers.

Here are some features for creating an online wholesale store with Shopify:

Company profiles

Shopify’s B2B customer profiles are designed for wholesale, representing multiple buyers and locations with all necessary information in one place.

Profiles can manage payment terms, catalogs, tax exemptions, and user permissions.

Catalogs

The catalog allows easy customization with features like:

1. Price lists. Set wholesale pricing using fixed amounts or percentage off retail price.
2. Customer-specific product publishing. Show different products to different customers.
3. Volume pricing. Offer discounts based on cart quantity.

Customer accounts

Customer accounts let B2B customers view wholesale products and pricing while maintaining existing product pages for end consumers.

Retailers can manage orders, view past orders, and save account information after logging into your store.

Utilize these features to serve retailers, resellers, and end consumers from your Shopify store.

? Watch the case study: Brooklinen Scales Their Wholesale Business to New Heights with Shopify

See how Brooklinen leveraged Shopify’s B2B features to streamline processes, enhance customer experience, and achieve significant growth.

6. Market and sell your wholesale products

After establishing a profitable business idea, pricing strategy, and setting up a B2B store, the next step is finding potential wholesale customers.

Marketing to retailers is essential to gaining visibility. So, how do you attract retailers and make them aware of your business?

Use your website

If you have an existing direct-to-consumer site, leverage this audience to find wholesale customers. Retailers often reach out to popular online stores for partnerships.

Encourage wholesale relationships by making it easy for retailers to contact you through a prominent inquiry link on your website footer.

? Let your customers submit a form on your online store to request a B2B relationship.

Join a wholesale marketplace

Expand your reach by listing products on wholesale marketplaces. Running an online store alongside multiple marketplaces can increase sales channels and attract new buyers.

Read: 15 Wholesale Marketplaces for Selling Your Products

Attend trade shows

Trade shows are excellent venues to connect with potential customers. Regardless of your niche, specific industry trade shows can be found listed in directories.

Setting up a booth provides a platform to network directly with retailers. However, keep in mind the costs involved, such as travel and booth fees.

Attend a trade show as a visitor first to gauge potential before deciding to exhibit your business.

Read: Trade Show Planning: How Retailers Can Get the Most ROI From These Sales Events

Use incentives to motivate buyers

Wholesale buyers also respond well to incentives. Offering quantity-based discounts, such as a percentage off on the first order, can attract new customers.

Here are additional incentives to consider:

• Low minimum order requirements. Ease new customers into buying small quantities.
• Free shipping. Offer based on order size and delivery location.
• Volume pricing. Encourage bulk purchases with discounts.
• Various payment options. Make transactions convenient.
• Bundle deals. Offer discounts on product bundles.
• Discount codes. Create time-based or personalized discounts using codes.
• Free samples and testers. Allow customers to try before purchasing.

Dropshipping services are another attractive option. As a dropshipping supplier, deliver products directly to end customers when a retailer places an order.

Reach out to complementary brands with Shopify Collective

Unlike direct-to-consumer channels, wholesale doesn’t always require a large customer volume. High-quality retailers who successfully sell your products can continue to place larger orders.

Find these partners by contacting businesses with complementary products through contact forms, social media, or Shopify Collective.

Dropshipping with Shopify Collective

Connect with US-based Shopify brands to easily sell their products. With Shopify Collective, curate items from like-minded stores and ship directly to your customers.

Explore Shopify Collective

7. Expand your team

Starting a wholesale business can begin as a solo venture. However, business growth necessitates a diverse team. Each role brings unique skills, enhancing customer satisfaction, inventory management, and financial analysis.

Potential job postings for an expanding wholesale business include:

• Customer success managers: Drive sales and ensure customer satisfaction.
• Quality assurance supervisors: Oversee product quality with suppliers and manufacturers.
• Logistics coordinators: Manage order volumes and timely goods delivery.
• Inventory analysts: Monitor and predict complex inventory needs.
• Office administrators: Handle daily administrative tasks.
• Growth marketers: Seek out new retail customers and business opportunities.

Wholesale items to sell

The possibilities for selling wholesale items online as a B2B business are vast. Whether you’re a seasoned pro or a newcomer, you can broaden your product range with the following ideas:

Want more wholesale products? Read: 20 Trending Wholesale Business Ideas

Educational materials

The education supplies market is significant with more than 55.4 million K-12 students and over three million teachers in the United States alone.

Consider wholesaling these education products:

• Arts and crafts supplies
• Educational software
• Writing utensils
• Notebooks/folders/binders
• Computers
• Calculators
• Backpacks
• Textbooks
• Lunchboxes
• Toys/games/puzzles

Home décor

With home improvement sales projected to exceed $1 trillion globally by 2027, home décor is a lucrative market for wholesale businesses.

Some home décor products to consider wholesaling are:

• Wall art
• Candles
• Pots/vases/plants
• Wallpaper/paint
• Flooring
• Rugs/runners
• Throw pillows and blankets
• Furniture
• Storage and organization
• Lamps/lighting
• Bedding

Clothing and accessories

The fashion market, from workwear to formal attire, is extensive and growing, expected to reach nearly $2 trillion by 2027.

Consider these popular product types:

• Baby
• Children
• Women
• Men
• Formal
• Casual
• Activewear
• Business
• Scarves
• Textiles
• Hats
• Jewelry
• Shoes

Food

Food, a constant necessity and a luxury item, provides a reliable market for wholesale businesses.

Here are some food product ideas for your next wholesale business:

• Beverages
• Dairy
• Ice cream
• Oils
• Beef
• Pork
• Poultry
• Seafood
• Frozen
• Fresh produce
• Snacks
• Desserts
• Organic
• Low-carb
• Keto products

Purses and handbags

The global purse market is projected to reach $67 billion by 2032. Consider selling these types of purses and handbags wholesale:

• Totes
• Clutches
• Men’s bags
• Kids’ bags
• Wristlets
• Casual bags
• Travel bags

Kitchen materials

The kitchenware segment generates over $17 billion globally and is expected to grow annually by 3.83% until 2028.

Some kitchen products to kickstart your wholesaling business include:

• Utensils
• Pots and pans
• Bowls/plates
• Platters
• Storage/organization
• Cabinets/shelving
• Knives
• Table linens
• Tables
• Chairs
• Appliances
• Glassware

Health and wellness

The health and wellness industry is expected to make nearly $7 trillion a year by 2025. The COVID-19 pandemic has led to a sustained interest in personal health and wellbeing.

Consider