Navigating Wholesale B2B in 2024: Strategies for Success

Wholesale B2B, the sale of products to businesses in bulk at discounted rates, has reached $698 billion in the US in July 2022, marking a notable 16.1% growth from the previous year. The sector's 15.2% year-over-year growth surpasses overall US manufacturing and distribution sales. Brands like Your Super, Public Goods, and Bark are shifting to a DTC and wholesale hybrid, driven by factors like escalating advertising costs.

Navigating Wholesale B2B in 2024: Strategies for Success

The benefits of this transition are evident: increased order volume, reduced manual tasks, and lower customer acquisition costs. This article guides you through wholesale e-commerce complexities, aids in selecting optimal sales channels, and offers insights for managing a successful B2B business.

Exploring B2B Wholesale Ecommerce:

B2B wholesale is the practice of businesses selling goods or services in large quantities to other businesses, providing products at discounted rates for resale or internal use. Transactions typically involve larger quantities, negotiated pricing, and collaborative partnerships.

Dynamics of Wholesale B2B Ecommerce:

Technological advancements and changing B2B buyer behavior have revolutionized wholesale ecommerce. Modern retail ecommerce businesses leverage wholesale to drive growth without significant capital investments. A suitable B2B ecommerce platform allows businesses to automate processes, offer tailored pricing, and more.

Benefits of Online Wholesale Selling:

Recent McKinsey research indicates a shift in the B2B buyer landscape, with digital channels empowering buyers to gather information independently. This reduces the need for in-person influence from wholesalers.

Platforms like Shopify have facilitated online wholesale selling, unlocking several benefits:

  • Improved Buyer Experience: Ecommerce enables wholesalers to anticipate buyer needs, support research processes, and ensure easy access to content, enhancing the overall customer experience.
  • Automated Processes: Wholesale processes, from signup to checkout, can be streamlined, reducing time spent on manual order management and administrative tasks.
  • Cost Efficiency: Selling in bulk allows businesses to capitalize on larger orders and decrease marketing expenditures, increasing profits per unit. Bulk shipping to fewer customers also reduces fulfillment and operational costs.
  • Entry into New Markets: Partnering with established retailers provides access to new audiences, leveraging their supply chains to mitigate risk and lower setup costs. Wholesalers save on marketing by tapping into the retailer's existing customer base.

Strategies for Selling Wholesale to B2B Customers:

Selecting a Wholesale Sales Channel:

Choosing the right sales channel is the initial step in establishing a wholesale operation. Three common channels include:

a. Password-Protected Online Storefront: Overcoming concerns about the complexity of the B2B buying process, a suitable wholesale e-commerce platform can create a private B2B website with comprehensive information catering to clients' needs.

b. B2B Wholesale Marketplaces: Platforms like Faire, Abound, and Amazon Business provide access to a vast pool of potential buyers. However, careful consideration is needed, as marketplaces often take a percentage of sales and may not offer the desired DTC-style experiences.

c. Trade Shows: Despite the challenges posed by the COVID-19 pandemic, trade shows remain relevant. Attendees can collect customer details and utilize DTC-style marketing tactics to follow up post-event.

Crafting a Wholesale Pricing Strategy:

While offering products at a lower wholesale price, avoiding compromising profit margins is crucial. Calculate manufacturing costs, including operational expenses, and set wholesale prices to retain a reasonable profit margin.

Setting a suggested retail price (SRP) creates distinct limits, preventing retailers from undercutting prices and preserving brand equity. When deciding on the SRP, consider the pricing strategy employed in Business-to-Consumer (B2C) scenarios.

Setting Minimum Order Quantities and Volumes:

Ensuring wholesale customers meet specific thresholds involves setting minimum order quantities (MOQ) and minimum order volumes (MOV). These parameters depend on profit margins, considering the cost of goods, bulk shipping costs, and other fees associated with wholesale ecommerce.

Consider offering lower MOQ and MOV for initial orders to reduce barriers for smaller businesses entering the wholesale market.

Implementing Flexible Wholesale Payment Terms:

Acknowledging that B2B customers may face cash-flow constraints, leverage B2B ecommerce platforms such as Shopify to institute flexible payment terms. Permit post-delivery payments and automate reminders for invoiced amounts that are due.

Distinguish between B2B and B2C ecommerce experiences, ensuring that only corporate buyers can access wholesale prices and payment terms.

Streamlining Wholesale Logistics:

Navigating the challenges of shipping large quantities to wholesale customers requires strategic planning. Consider using real-time multichannel inventory management systems to prevent stockouts.

Leveraging a third-party logistics partner (3PL) for order fulfillment outsourcing can optimize global shipping and distribution processes, thereby improving overall operational efficiency.

Running a B2B Marketing Campaign:

Constructing a resilient B2B sales pipeline entails incorporating Direct-to-Consumer (DTC) marketing practices across platforms, including social media. Gartner reports that many B2B buyers use social media to learn, compare solutions, and gather pre-purchase information.

Diversify marketing efforts beyond traditional channels like trade shows, tapping into social media to connect with potential B2B customers.

Prioritizing B2B Customer Retention:

Delivering an exceptional customer experience is pivotal for retaining wholesale buyers. Establish a dedicated team of B2B sales representatives to prioritize customer support and retention efforts.

Key initiatives include:

  • Providing information on effective product marketing.
  • Sharing industry insights.
  • Offering exclusive previews of upcoming inventory.

In supply chain disruptions, address issues promptly and consider goodwill gestures, such as better discounts or extended payment terms.

Expanding from Wholesale to Full Scale with Shopify:

Incorporating a wholesale channel into your business requires careful consideration. Ecommerce solutions like Shopify can streamline the process, offering a top-notch user experience for both end consumers and B2B buyers.

Leveraging Shopify's B2B ecommerce platform allows businesses to:

  • Design separate online stores for DTC and wholesale within a unified ecommerce backend.
  • Manage inventory seamlessly with a single inventory management system.
  • Update product information across all sales channels through PIM, CRM, POS, and ERP systems integrations.
  • Create custom price lists and percentage discounts for specific customer groups.
  • Automate customer signups and streamline order management.

For assistance in integrating Shopify's B2B capabilities, consider contacting VT Labs, a reputable Shopify development company offering expertise and innovative solutions to enhance your ecommerce platform.