Anyone who has been reading my blog for a while knows I’m big on the idea of building relationships to build sales, which includes knowing your customer inside and out. While not necessarily on a person-to-person level, simply understanding the difference between selling to a retail store compared to selling to wholesale customers is vital, especially if you work with both types of clients.
I’ve found many differences between retail and non-retail wholesale clients but it’s easiest to sum it up like this: Retailers sell goods directly to an end user. Wholesalers generally sell goods to other store owners and others in the retail industry who then turn around and sell those goods to the end user.
When selling to a retailer, your short-term profit margin is more likely to be higher. For one, retailers are usually able to charge more for products, thus increasing your earning potential. Wholesale customers, on the other hand, are usually easier to get to come back for more and larger orders.
When planning your sales strategies to either type of customer, your methods and offerings will vary between the two types of customers. Wholesale customers are going to be less swayed by product discounts but more interested in bulk purchase discounts and easy contract terms. They will also be more swayed by what they think they can sell to their customers.
In the same vein, retailers can drive more sales by offering discounts in store, which means selling to them can be swayed by marketing and sales tactics more than your wholesale customers. However, to protect your bottom line, it’s vital that you establish guidelines in your retail contracts for how much your products can be discounted and when.
Like any sales situation, having the right product and packaging is going to be key for any sale. When selling to a retailer (i.e. to their customer), you need to make sure your product stands out to the customer compared to everything else on the shelf. This is less important in a wholesale situation, especially if your wholesale client will be re-labeling the product to fit a different brand.
Method of sell may also come into play. Is your customer going to be selling online versus in a store? It stands to reason that wholesale customers may offer more e-commerce options, allowing them to sell in a variety of retail environments or to offer fulfillment themselves from order on their website.
In these ever-changing times of retail, it’s vital for your company to be able to alter its sales strategy to meet the client’s needs as part of achieving Over The Top Performance. You need to not only understand your customer, but your customer’s customer.