When you launch a beauty business, you’ll have to decide if you want to sell your products wholesale, directly to customers, or both.
Wholesale (selling at a lower price to a third party or retailer who sells to their own customers) can sound intimidating at first.
How do you find a retailer? How do you price your products? How do you work with retailers?
As you establish your product business, you might opt to sell your products wholesale.
But it’s worth learning the ins and outs! Selling wholesale can help you expand your brand and sell at a higher volume.
Here are our tips for how to successfully sale your beauty brands wholesale:
When you sell wholesale, you’ll have to stock enough products to have them available when retailers want them. That’s going to require a higher startup capital.
You also have to find ways to make your beauty brand stand out–after all, your wholesaler likely won’t care as much about selling your products as you do.
Well-designed packaging with eye-catching colors and simple, but professional labels will help your products pop on the shelves.
Finally, you will need to set up a system to keep your sales to retailers organized. Make sure your products have barcodes, and create a line sheet or catalog for retailers to shop from. You’ll also want to create a simple order form and a set of terms and conditions.
While wholesale gives you the chance to sell high volumes of product and expand your customer base, you will be making smaller profit margins.
In the beauty industry, the wholesale price is usually 2-2.5 times the manufacturing cost. (So if you manufactured a product for $4, you would sell it for $8-10 to a wholesale buyer.)
If you sold that same item directly to a customer, you would probably want to mark it up to $20-25.
Working with retailers takes follow-up, persistence, and commitment. Your goal when you approach retailers is to form long-term relationships!
You should spend some time researching retailers before you approach them to make sure that they will be a good fit. Find out if they have similar branding to your company. Is their target market the same? Do they sell products that will complement your own?
For example, if your beauty brand focuses on natural products and recyclable packaging, you would want to find a retailer who also cares about the environment.
Keep in mind that large retailers usually pay on a net 60. That means they won’t pay you until 60 days after receiving your products. You’ll need to make sure you have enough inventory and capital to continue running your business while waiting on payments.
If you work with smaller retailers, on the other hand, you might be able to negotiate different pay terms. You could request upfront deposits, or a net 30.
You can find retailers in many places. Visiting business in-person is a great way to network and find retailers.
Other ways to find retailers include attending trade shows, reaching out to sales reps, and contacting boutique catalogs.
Never underestimate the power of social media! You can network online to find retailers who align with your brand.
You can also use Range Me, a platform used by Ulta and many other retailers. You can upload your brand and product information to attract retailers who are interested in your products. If you upgrade to a premium membership, you can submit your products directly to retailers who are actively looking.
Always research retailers before you approach them. Find out what types of products they sell, what their brand stands for, who they sell to, and what their prices are like. Make sure to also find out if they have a preferred process for product submission.
You want to know as much about the retailer as possible so you can individualize your approach. Be ready to show why your products would be a good fit for their business.
Consider offering incentives, such as free shipping or gifts. Another great way to stand out if you approach small boutiques or shops is to come with an appealing display that won’t take up too much room in their shop.
This makes it easier for them to sell your products, and makes you look professional and established.
You always want to stand out from the crowd and make it an easy yes for them.
Trade shows are a great way to meet retailers who are already looking for new companies to buy from.
But you should be selective about which trade shows you attend. They’re expensive–upward of $2,000, and you’ll have to travel to them. They also take a lot of prep time and work. It’s always a good idea to attend a show first. If it feels like a good fit, then you can come back as an exhibitor.
Before the trade show, prepare your materials so you can make an appealing booth. Think about what incentives you can offer buyers when you’re there. Create a sample pricing sheet to share with retailers.
You need to also have a system for collecting information to follow up. Make sure you set aside time to follow up later with the people that you meet!
Working with sales reps and distributors is a great way to get started with wholesale. They have connections and know how to get in front of retailers. Plus, they can save you the time and effort of working with retailers directly. You can also display your products in showrooms to get in front of retailers.
You can search online for sales reps and distributors. Trade shows are another great way to meet them. Don’t hesitate to call stores directly to ask who they work with.
Keep in mind that showrooms, sales reps, and distributors will all take a cut of your profits–usually operating on a 5% to 20% commission.
Cold calling can be intimidating, but it’s one of the best ways to find new business. Make a list of stores you would like to work with, then call, email, or visit them in person. If you reach someone, give them a catalog or a sales sheet and an easy way to contact you.
Don’t forget to follow up! Research shows that only 2% of sales are made during your first contact with someone. You’re much more likely to make a sale in the follow-up.
If you don’t hear back at first after emailing or leaving a message, If you don’t hear back after sending an email or leaving a message, follow up with another email or phone call.
A lack of response doesn’t necessarily mean they aren’t interested in your products. They might have just been busy or overlooked your message. Be persistent!
You don’t have to try every approach at once, but you do want to find what works for you. Not every beauty brand finds wholesalers the same way. Some swear by trade shows, and others rely only on cold-calling. You’ll have to experiment with different methods and figure out what works.
The more that you pitch your products to potential retailers, the more comfortable and successful you’ll become!
Are you launching a new beauty brand? If you’re just getting started with a beauty business and need more tips, Learn How to Launch a Beauty Product can help. It covers every aspect of starting a beauty business, from creating a solid foundation and getting funding to manufacturing, branding, sales, and marketing. Learn more about the course here.
As you establish your product business, you might think about selling your products wholesale and wonder how to sell wholesale as a small business.
When you sell wholesale, you sell your products at a lower price to a retailer or a third party, who then sells them directly to their customers.
Many product businesses sell directly to their customers, but depending on your circumstances, it might make sense for you to sell some, or all, of your products wholesale. This can allow you to sell more products and grow your brand quickly.
Read on to find out everything you need to know about selling your products wholesale, including what you need before you get started and where to find retailers.
To get started selling wholesale, you’ll need enough product in stock to sell to retailers. That means you need the capital to manufacture a large number of products so that you can have them on hand when a retailer needs them.
It’s important to remember that your retailer might not be as passionate about selling your products as you are. You’ll need well-designed packaging to help your products stand out among others on the shelves.
Finally, you will need an organization system in place for retailers to purchase your products. This should include barcodes for your products and a catalog or line sheet that retailers can use to purchase your products, along with an order form and written terms and conditions.
Selling to a retailer gives you the opportunity to sell your products in bulk and to get in front of new buyers. However, you’ll be operating on smaller profit margins than if you sell your products directly to customers.
In most cases, a good rule of thumb for setting your wholesale price is to figure out how much it costs for you to manufacture your product and multiply that by two.
For example, in the beauty industry, the wholesale price is typically 2-2.5 times the cost to manufacture your products. You would normally charge twice that if you sold directly to customers. So if you manufactured a product for $4, you would sell it for $8 or $10 to a wholesale buyer. If you were selling that same product directly to a customer, you would charge $20 or $25.
But it’s important to remember when thinking about how to sell wholesale as a small business that your wholesale pricing will depend on the typical retail price and the average profit margins within your industry.
When looking for retailers and distributors to work with, it’s very important for you to make sure that they’re a good fit before approaching them. It takes a lot of persistence and follow-up to form relationships with retailers, so you don’t want to waste time with someone who isn’t a good fit.
In general, a retailer is a good fit if they have similar branding to yours, attract a similar target audience, and sell products that will complement your own.
Large retailers typically pay on a net 60, meaning they have 60 days to pay you after receiving your products. Make sure you have the capital and inventory to wait that long—you still have to run your business in the meantime!
When working with smaller retailers, you might be able to negotiate better terms. They might be willing to pay you a deposit upfront, or to pay on a net 30 instead.
You can find retailers in many places, including:
You can also use Range Me, a platform used by Target, Ulta, and many other retailers. You can upload your brand and product information, and the participating retailers will choose whether or not they are interested in your products. If you pay to be a premium member, you can see when retailers are looking for new products and submit your products directly to them.
When approaching smaller boutiques or shops in your area, a great way to differentiate yourself is to come with an appealing display plan for your products. This will help them sell your products and will make your products more appealing.
Make a simple display that won’t take up much room in their shop. Your display should match your branding and have a cohesive look.
It’s also a good idea to create a display that can be reused no matter where you need to show off your products, from trade shows to retailers to craft shows.
Before approaching a retailer, do your research. Make sure that you know what types of products they sell, what their brand is like, what price points they generally sell to, and who their customers are, and their process for product submission.
Be ready to sell your products. What makes them a good fit for this retailer? How do they stand out from the competition?
Come prepared with a strong and well thought out sales pitch and incentives, such as free shipping or gifts. Be creative and find a way to stand out from the other businesses they talk to.
When thinking about how to sell wholesale as a small business, attending trade shows is one great way to get in front of distributors and retailers. You’ll get immediate feedback about your products, and be able to meet many retailers in person that you wouldn’t have access to otherwise.
However, trade-shows are a commitment in time and money. Most of them cost $2,000 and up to attend. You will also likely have to travel to them, and it takes a lot of work to prepare.
If you do decide to exhibit at trade shows, make sure that you are selective in choosing which ones to attend. If you can, attend a show first and then come back as an exhibitor once you’ve decided it’s a good fit.
Before you attend, make sure that you know your goals, that you come with the materials to make an appealing booth, and that you think about creating incentives for buying ahead of time. Bring a sample sheet with retail and wholesale prices to present to retailers.
Create a system for collecting information so that you are prepared to follow up afterward. Often, relationships are built in the follow-up even more than at the event, so make sure to set aside some time in the days after the trade show to follow up with the people you meet there.
Another great way to start selling wholesale is to work with sales reps and distributors or to display your products in showrooms. Sales reps and distributors understand how to get in front of retailers and will save you time in working with retailers directly.
Showrooms provide a venue for you to get in front of retailers as well. However, they do take a cut of the profit. Most sales reps, distributors, and showrooms are paid a 5% to 20% commission.
You can find sales reps and distributors by searching online, meeting them at trade shows, or calling stores to ask who they work with.
Another avenue, when thinking about how to sell wholesale as a small business, is home shopping channels, like the Home Shopping Network, QVC, and Evine. Before trying to get your products on these channels, make sure you have enough cash and inventory. You won’t get paid for your products until 30 days after they are sold.
Keep in mind that you have to do well the first time you sell. If you get bad reviews, you won’t get a second chance. Contracts with home shopping channels are typically not negotiable when it comes to the number of items sold, the return policy, and what time they feature your products.
Cold calling can feel daunting, but it’s a great way to find new business. The first step of cold calling is to call, email, or visit the store in person. If you reach someone, give them a sell sheet or catalog and an easy way to contact you.
If you don’t hear back after sending an email or leaving a message, follow up with another email or phone call.
Follow up is extremely important. Research shows that only 2% of sales are made the first time someone is contacted. In other words, you will most likely make sales by following up, and not in your first call.
Don’t assume that a lack of response means they are not interested. People are often busy and may have overlooked your message. Be persistent and only stop following up when it’s clear they’re not interested.
When you are contemplating how to sell wholesale as a small business, try out different methods for getting retailers and figure out what works best for you. The more potential retailers you talk to, the more comfortable and successful you will be.
If you’re starting out with your product business and need more help on how to sell wholesale as a small business, check out our post on Choosing a Distribution Channel for Your Product next!