Complete Guide to Wholesale eCommerce: Everything You Need to know

In recent years, wholesale eCommerce has gained significant popularity as numerous traditional B2B businesses are moving their operations to digital selling channels. This rising trend towards B2B eCommerce wholesale has made the industry exceed $18 trillion valuation in 2023, with projections to reach $21 trillion in 2024.

Wholesale eCommerce is a business model where you can sell products in bulk to other businesses at discounted rates (through digital selling channels). You will basically act as an intermediary between the manufacturer and retailer/distributor.

If you also want to be a part of this growing market, you are at the right place. Whether you already have an online wholesale business or are looking for B2B eCommerce development services to build a platform, we have covered you. Here, we will talk about how wholesale eCommerce works, wholesaler types, the benefits of eCommerce for wholesalers, and how you can get started.

What is Wholesale eCommerce & How Does it Work?

Wholesale eCommerce is selling large quantities of goods online at lower prices per unit than in regular retail stores. Businesses buy these products in bulk at discounted rates, usually to resell them. This industry is booming, with companies of all sizes selling products to customers worldwide.

Several factors have driven the growth of wholesale eCommerce:

• Online Marketplaces: Marketplaces have made it easier for businesses to reach a global audience. These platforms allow wholesalers to list their products and connect with potential customers around the world without spending a lot on marketing.
• Social Media: Social media platforms allow businesses to connect with customers and build a community around their brand. By using social media, wholesalers can showcase their products, engage with customers, and boost sales through ads and posts.
• Mobile Commerce: Shopping via smartphones and tablets has become very popular. This trend makes it easier for businesses to reach people who prefer shopping on mobile devices. It simplifies the buying process and improves customer experiences.

How Does it Work?

Wholesale transactions usually happen between manufacturers and retailers, but wholesalers can also sell directly to consumers.

The biggest benefit of wholesale eCommerce is that it reduces business costs. Selling in bulk means larger orders and less spending on marketing, which increases profits per unit sold. Plus, it adds another sales channel to a business’s strategy.

Wholesale was an old-fashioned way of selling with a clunky buying process. However, technology and changing user behavior have transformed wholesale eCommerce.

With the right B2B eCommerce platform, businesses can automate tasks like customer sign-ups and checkouts, offer special pricing for bulk orders, and more. These platforms make operations smoother, improve customer interactions, and provide a better buying experience, helping wholesalers grow in a competitive market.

Wholesale vs. Retail eCommerce: Comparison Table

Comparison Criteria	Wholesalers	Retailers
Business Model	Business-to-Business (B2B)	Business-to-Consumer (B2C)
Target Audience	Retailers, businesses	Individual consumers
Selling Quantity	Sell in bulk quantities	Sell in small quantities
Purchasing Quantity	Purchase directly from manufacturers or producers in bulk	Purchase from wholesalers or manufacturers based on customer demand
Role in Supply Chain	Intermediaries between manufacturers and retailers	End point of sale
Pricing	Offer products at lower prices to retailers	Decide retail prices for profit

What’s the Difference Between Wholesale and Retail eCommmerce?

Now that you know how wholesale eCommerce works, you might wonder how it differs from retail eCommerce.

Here are some main differences between these two eCommerce business types:

Pricing Strategy

Wholesalers and retailers set their prices differently because of how they sell their products. Wholesalers sell goods in large quantities at lower prices per unit. This is possible because selling many items to one buyer is cheaper than selling single items to many buyers.

For example, a wholesaler might sell 100 T-shirts to a clothing store for $5 each. Selling in bulk helps wholesalers keep their costs low and offer better prices.

Retailers, on the other hand, sell directly to consumers at higher prices per unit. They must cover costs like storage, marketing, and selling individual items.

So, an online clothing store might sell a T-shirt for $10. The extra costs of running a retail business mean they must charge more per item.

Order Volume

The amount of goods sold at one time is another major difference between wholesale and retail businesses. Wholesale businesses focus on bulk orders and often give discounts for large purchases.

The idea is simple: buying more means paying less per unit. For example, a book wholesaler might sell large sets of books to a bookstore at a discounted rate.

Retailers sell products in smaller quantities, often just one item at a time, to meet the needs of individual customers.

For example, an online bookstore might sell a single book. Retailers cater to the specific needs of individual buyers who usually need only a few items.

Target Audience

Wholesalers and retailers have different types of customers. Wholesale businesses operate on a B2B (business-to-business) model. They sell their products to other businesses like manufacturers, distributors, retailers, or other wholesalers. These customers buy large quantities to resell to end consumers.

Retail businesses operate on a B2C (business-to-consumer) model. They sell directly to the end consumer, offering a wide range of products in smaller quantities.

Fulfillment

eCommerce fulfillment is how products are stored, shipped, and delivered. Fulfillment also differs between wholesalers and retailers.

For wholesalers, warehousing, shipping, and fulfillment are key parts of their business. Success often depends on how well they can manage these processes. Efficient systems help wholesalers handle large orders smoothly and keep their customers happy.

Retailers see fulfillment as just one part of their business. They focus more on marketing and branding to attract and retain customers.

While fulfillment is still important, it’s not their main concern. Retailers invest their money in creating engaging eCommerce experiences and building strong brand identities to boost sales.

Types of Wholesalers

Before entering the wholesale market, you must know the types of wholesalers. Below are the major types of wholesalers:

Manufacturers

Manufacturers are the original makers of products who also sell their items in large amounts to retailers.

For example, a company that makes T-shirts sells them in bulk to stores or businesses. By doing this, manufacturers can get their products to market more quickly.

Distributors

Distributors buy products from manufacturers and sell them in large quantities to retailers. They are not the original makers of the products. Distributors take care of shipping and customer service so manufacturers can focus on making their products.

For instance, a distributor might buy drinks from a manufacturer and then sell them to restaurants and grocery stores.

Dropshippers

Dropshippers are online wholesalers who don’t keep any inventory. They display products from manufacturers on their websites.

When someone makes a purchase, the manufacturer sends the product directly to the customer. This way, dropshippers can offer many products without needing to store them.

Import/Export Wholesalers

These wholesalers deal with products that are traded internationally. They either bring products from other countries or send local products abroad.

For example, an import/export wholesaler might bring electronic components, smartphones, laptops, or other gadgets from manufacturing hubs to meet the domestic demand.

Benefits of eCommerce for Wholesalers

Traditionally, wholesalers didn’t prefer entering digital commerce because it seemed a complex process for both buyers and sellers.

However, digital advancements and online selling channels have made running a B2B business virtually easy. With eCommerce, you can track customer behavior, analyze data, and make data-driven decisions that ensure business success. Following are the top advantages eCommerce offers to wholesalers:

Simplifies the Buying Process

Many wholesalers think eCommerce isn’t for them because the buying process seems too complicated. They worry about things like special pricing, exclusive products, and customers with unique terms. These are real concerns, but the right eCommerce platform can solve these problems and help your business grow.

Creating a custom B2B eCommerce website can provide all the information your clients need. This way, they don’t have to contact you for basic details, making their experience smoother.

eCommerce also makes it easier for wholesale customers to find you online. If you optimize your website for search engines, potential buyers can locate your business faster, helping you reach more customers.

Automates Wholesale Processes

eCommerce automation is one of the best advantages for wholesalers. From signup to checkout, eCommerce can save you a lot of time. Instead of managing orders through phone calls or emails, you can focus on other important aspects of your business.

eCommerce platforms can help you:

• Set custom prices and discounts for different customers or groups.
• Automate the customer signup process.
• Let customers buy, track, and reorder products easily.
• Review orders before sending invoices.
• Manage inventory and orders efficiently.

These features make your business run smoother and keep your customers happy with a seamless experience.

Improves the User Experience

Today’s B2B buyers expect the same convenience as B2C shoppers. They come prepared with information and prefer to make purchases without talking to a representative. Many popular eCommerce platforms offer features like 24/7 customer account portals, where customers can access their accounts anytime.

This self-service option makes onboarding and ordering simple, meeting the needs of modern buyers. It ensures customers can get the information they need whenever they want, enhancing their overall experience.

Increases Sales While Lowering Costs

Selling wholesale online is a fast way to grow your business. If you’re a manufacturer, selling in bulk increases product volume and reduces the cost per unit, improving your profit margins. Plus, shipping in bulk to fewer customers can lower your fulfillment costs.

eCommerce also helps you reach a wider audience without spending much on marketing. By optimizing your online presence and using digital marketing strategies, you can drive sales more efficiently.

Helps Enter New Markets

Expanding into new countries or regions comes with challenges. However, partnering with an established retailer can reduce these risks. By using their supply chain, you can lower setup costs and enter new markets more smoothly.

Additionally, this partnership gives you access to the retailer’s existing customer base, saving you money on marketing. This strategy helps you expand your reach and tap into new revenue streams with less risk and investment.

How to Get Started With Wholesale eCommerce?

Now, you might be excited to enter the wholesale eCommerce market, right? But the main question is, how do you get started?

Well, you can sell your products in bulk on a marketplace or even develop your own platform by working with a B2B eCommerce development company. Regardless of the path you choose, you should keep the following points in mind:

Do Some Research

Starting a wholesale eCommerce business comes with many benefits, but it’s also highly competitive. You’ll be up against numerous other businesses, many of which already have loyal customers.

Begin by thoroughly researching the market. This will help you spot opportunities and weaknesses you can leverage.

Ask yourself:

• Are there any categories that are under-supplied?
• Are current wholesalers failing to meet the specific needs of B2B customers?

Use your findings to identify the ideal target audience and gain traction from the beginning.

Define a Business Niche

When you’re starting out, focus your efforts on profitable product categories that don’t require a huge investment.

Instead of trying to sell everything to everyone, concentrate on a specific niche. This approach reduces the risk of spending money on items that won’t sell well or have low-profit margins.

Choosing a niche also makes it easier to find reliable manufacturers and build strong relationships with them. It’s simpler to establish credibility and long-term partnerships with B2B buyers within a specific market.

Make a Distribution and Fulfillment Plan

Plan how you will distribute goods and fulfill orders for your B2B customers. Many eCommerce wholesalers use marketplaces like Alibaba, and they might also have a dedicated website for B2C and retail store purchases.

At first, you’ll need to actively seek out your initial customers. Reach out directly to retail stores and eCommerce websites, explaining why your product stands out and the value it offers.

Additionally, plan your wholesale fulfillment strategy:

• Will you store goods in your own warehouse?
• How will you ship products to your B2B customers?
• Would partnering with an omni-fulfillment service be more efficient?

Having these details sorted out beforehand will help you start your wholesale eCommerce business smoothly.

Get Necessary Licenses

Get the appropriate wholesale licenses and permits early on. Usually, you’ll need a reseller’s permit to show manufacturers and buyers that you’re a legitimate wholesale business.

Permit requirements vary by state and country, so check your local tax or revenue website and consult a lawyer or accountant.

A sales license is necessary to legally resell the goods you buy, and don’t forget a sales tax ID to collect and pay taxes properly.

For products with stiff competition or involving intellectual property, a licensing agreement might be necessary. This helps control the amount and type of goods sold, as well as the market in which they are sold.

Find Supply Chain Partners

Partnering with reliable companies is crucial for the profitability and sustainability of your wholesale eCommerce business.

Look for manufacturers with a strong reputation who can offer competitive wholesale pricing, allowing you to make a good profit even at discounted rates.

Consider partners for other aspects of your supply chain, like fulfillment services. If you outsource fulfillment, choose a reputable partner with the capacity and resources to handle it efficiently.

Craft a Pricing Strategy

Your pricing strategy is key to the profitability of your wholesale business. You need to price goods low enough to attract wholesale buyers while ensuring a solid profit margin.

If you’re selling both retail and wholesale, ensure that wholesale pricing doesn’t undercut your retail prices.

Many wholesale businesses sell goods at double the procurement price. Setting a minimum order quantity can help you achieve a higher average order value.

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FAQs on Wholesale eCommerce

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In Closing

By moving your wholesale business to digital channels, you can streamline the operations, improve finances, and expand the customer reach.

As more and more players are entering the market, you must focus on B2B eCommerce personalization to stand out from the competition.

If you are looking for an eCommerce development partner to build your wholesale platform, look no further than BrainSpate. We are experts in developing eCommerce websites, regardless of industry and business type. Contact us today to discuss your needs!