Wondering how to start an eCommerce business? In this article, we will discuss the ins and outs of what a wholesale eCommerce business really is and how to set it up for success. Read on to find out more!
What is an eCommerce business?
What exactly is an eCommerce business? Also known as electronic commerce, eCommerce is the practice of buying and selling goods or services via the internet. Put simply, it is a way of doing business online without ever going to a brick-and-mortar. If you have ever shopped for anything online, then you have already participated in the eCommerce scene.
What is wholesale eCommerce?
Not to be confused with other types of eCommerce businesses, wholesale eCommerce is a kind of B2B (business-to-business) eCommerce model that refers to businesses selling their products to other businesses in bulk and at discounted prices. The most significant advantage of starting a wholesale eCommerce business is that it simplifies the buying experience by ensuring optimum accessibility while also offering the best prices.
In this day and age, more and more businesses are relying on the internet to simplify most of their processes. The rise of wholesale eCommerce has made it easier for businesses to find the best possible prices online without the need for tedious negotiation processes.
Factors to Consider Before Starting Your Wholesale Ecommerce Business
Starting a wholesale eCommerce business is like starting any other business. You would have to put in ample time and effort to make sure that your business will be profitable. After all, no one wants to go into business expecting to fail, right? Before starting your wholesale eCommerce business, check out some of the most important factors to consider:
What do you want to sell?
Starting an eCommerce business begins with finding the right product to sell. And, contrary to popular belief, finding a set of products or a single item to sell is a remarkably tedious process. Choosing a competitive item usually involves in-depth market research to be able to determine if a product is profitable. Another key consideration when choosing a product to sell is the type of sourcing method to use. Make sure to choose an item that’s easy to source to lower instances of stockouts.
Which eCommerce platform will you use?
Familiarizing yourself with the most popular eCommerce platforms is usually one of the first steps when starting an eCommerce business. However, you also have the option to develop your own eCommerce website. It all boils down to what you, as a business, need. In general, your eCommerce platform should allow you to manage your content, optimize your online store to be compatible with multiple devices, accept payments, and enable you to gain valuable insight into your customer’s buying habits.
Is there demand for your product?
Before opening your wholesale eCommerce business, you should first determine if there is enough demand for your product. Demand forecasting determines how much a customer is willing to pay for your product and enables you to have an idea about the amount of inventory you should hold at any given time.
How and where will you source your products?
Are you planning to source your products domestically or overseas? Are there logistical constraints that you need to be aware of? Do you have a place to store your products? As a wholesale eCommerce business, it is important to note that you have to source your products early and upfront before you could cater to the needs of your customers. The truth is that the market can be volatile. Make sure to pay attention to various factors that may affect how you source your products and your eCommerce business as a whole.
Who are your competitors?
If you need a better understanding of the market, conduct a thorough analysis of your competitors. The purpose of competitor analysis is to acknowledge your competitor’s strengths and identify their weaknesses in comparison to your own. In doing so, you will be able to find gaps in the marketplace and pounce when an opportunity presents itself.
Is a wholesale business profitable?
Like other businesses, a wholesale business depends on several different factors to ensure success. As a business owner, you should be able to have a product that is in demand, identify opportunities in the market, negotiate for lower prices, and provide exceptional customer service. Another important thing to keep in mind is keeping your profit margins healthy. As a product-based business, a great pricing strategy is a must to ensure long-term profitability.
What are the benefits of being an eCommerce wholesaler?
If you’re seriously considering becoming an eCommerce wholesaler, it’s important to weigh its potential advantages. Check some of the most common benefits of being an eCommerce wholesaler below:
- Lower operating costs – Since wholesalers are able to buy products in bulk and at a much lower price point, they are likely to save a lot of money based on the reduced price per good. In addition, most eCommerce wholesalers also save on overhead costs since most of its key processes are conducted via the internet.
- Reach a wider audience – Businesses actively participating in the eCommerce space have the potential to reach a lot of people without the need for expensive advertising and marketing campaigns. Whether it be retailers interested in reselling your product or manufacturers that want to partner with you, eCommerce wholesalers can manage business relationships all online.
- Collect customer data – A key benefit of being an eCommerce wholesaler is the ability to collect important customer data. This would enable you to provide a personalized customer experience to improve your conversion rate.
Can I buy wholesale and sell online?
Yes! Most online eCommerce businesses use this sourcing method to save money on the cost of goods. By buying from wholesale suppliers, you are effectively lowering your sourcing costs and increasing your profit margin on resale.
Ecommerce for Wholesalers: Tips to Better Manage Your Wholesale Business
What makes an eCommerce wholesale business successful? Regardless of the type of business you have or the kind of products you sell, much of what it takes to run a successful wholesale business lies in your preparedness in certain aspects of your operation. Fortunately for you, we’ve compiled some tips to better manage your wholesale business. Check them out below!
Create a Business Plan for Your Wholesale Business
Whether you’re just starting out or exploring new ways to expand your wholesale eCommerce business, having a strong business plan will help guide you when making critical business decisions going forward.
Find a Reliable Supplier
Finding a reputable and reliable supplier for your wholesale eCommerce business is essential to your success. From sourcing raw materials to the production of goods, your supplier plays an important role in your business. Having a great relationship with your supplier means you can negotiate lower prices and better payment terms – therefore increasing your profit margins.
Focus on Providing the Best Customer Service
Are you building and nurturing a good relationship with your customers? Keeping your customers engaged and satisfied throughout their buying experience lets you collect valuable customer information that ultimately enables you to provide better customer service.
Measure Your Sales Performance
Do you have a system in place to accurately monitor your sales performance? Monitoring your sales performance, if done properly, helps you prepare for busy shopping seasons and ensure that you have enough stock on hand to meet customer demand. Measuring your sales performance also allows you to have an understanding of the aspects of your business that need improvement.
Ensure That You Have Enough Funding
For your wholesale eCommerce business to grow, you first need to raise enough capital to hit the ground running. Fortunately, there are a variety of options that you can choose from as a wholesaler. Some of the most common funding options you can consider are microloans, term loans, credit cards, and lines of credit. But if you’re looking for an innovative way to raise capital for your wholesale eCommerce business, you should check out Kickfurther.
Kickfurther is the world’s first online inventory financing platform that enables companies to access funds that they are unable to acquire through traditional sources. We connect brands to a community of eager buyers who help fund the inventory on consignment and give brands the flexibility to pay that back as they receive cash from their sales. This alleviates the cash-flow pinch that lenders can cause without customized repayment schedules allowing your brand to scale quickly without impeding your ability to maintain inventory.
Wrapping Up: How Can You Plan for Wholesale eCommerce Success?
At the end of the day, the tips in this article are just that: tips. Ecommerce for wholesalers depends on a lot of different factors that would test how well-prepared you are and how quickly you can adapt to changes in the market.
