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How to Establish Wholesale Relationships

DATE: 16/12/21


You’re starting out on your business journey and you realise you need to establish relationships with wholesalers of the products or supplies you need. Where do you start? Especially when wholesalers are often more inclined to work with established companies who have history of prompt payment and reliable resale. It’s a bit of a Catch 22. How can you become more established without the relationships in the first place?

We’d suggest following a few simple steps to set up and grow positive and long term relationships with the wholesalers you want and need in your business journey.

Do your research

Take some time to look into the market and get a clear idea of which wholesalers are relevant. Understand their offerings, the different conditions they require and what products they supply under which time frames. Really understanding what is out there gives you a solid foundation for choosing the wholesaler that would suit you best and showing them why the relationship could work for you both.

Be open and honest

There is no point in sugar coating your position. Explain openly and honestly that you’re a new business, starting off a wholesale relationship on anything other than the truth is a mistake. Yes, it might mean that some wholesalers are less inclined to work with you but it shows that you’re clear and direct and that holds a lot of value. Wholesalers may offer you more stringent conditions for first and second orders as a new business (higher minimum orders, shorter payment windows etc.) but it’s worth making those work if you can in order to carve out a relationship that you can grow with.

Respect the conditions

Every wholesaler will offer specific conditions of sale and of resale. Conditions of sale includes the minimum order value – perhaps minimum of each SKU, or perhaps only minimum overall value – conditions of delivery and most importantly the payment window. Conditions of resale cover how you go on to sell the products you’ve purchased from your wholesaler – the resale price, the marketing of the product, and the branding and communications. Make sure you’re very clear on all the rules surrounding your purchase and resale, nothing erodes a relationship more than not adhering to these.

Show why it works for everyone

A relationship should work both ways and a wholesale relationship is no different. Your wholesaler will be giving you access to products that you need for your business to succeed and in return, you will be offering them access to your customer base, a way to showcase their brand and product and the potential to grow their sales going forward. Have your business plan ready when you negotiate with your wholesaler, explain to them your financial planning and growth prospects, discuss your customer base and how it dovetails with theirs and underline any similarities in brand ethos in order to showcase why the relationship can work for everyone.

Pay, pay, pay

This one might be the most important of all – pay. And pay on time. Or earlier. If payment is required on delivery, or within 30 days, whatever the conditions attached, make sure you stay within them and ideally, pay earlier and definitely without any need of a reminder. A wholesale relationship is based on trust and reliability and just like you are, your wholesalers are trying to build their own businesses, so making sure you pay on time is essential. If under certain circumstances you have problems with this, make sure you are in touch with your wholesaler immediately to explain. Honesty is once again the best policy here.

Set up a trial

If you’re finding your wholesaler is less inclined to start a relationship with you, suggest that you could work under a trial scenario. One order or three months, something short enough to remove the risk they might be worried about, but long enough that you can showcase how positive the relationship will be. If they agree, make sure you deliver immaculately on your end of the relationship during this trial and hope that from this experience you’ll prove yourself more than worthy of a longer term relationship.

Don’t give up

It can take time with some wholesalers so don’t be put off by your first ‘no’. Perhaps there is one wholesaler or supplier you are really keen to work with but haven’t been able to secure the relationship yet? So, go ahead with other wholesalers, get started building the business a little and when you have a few months of orders and payment under your belt, go back to your dream wholesaler with this as evidence and see if you can negotiate an option with them. Once wholesalers can see that you are serious about the relationship and the conditions that surround that, you’ll hopefully be able to set up an agreement that will work for everyone.

Everything new is difficult and starting a new business can seem like a never-ending list of ‘new’ and ‘difficult’ but taking the first step, setting up that first relationship, learning those first few lessons can be all it takes to grow in confidence and move ahead on your path to business success.

Whatever your business idea, whether it’s just something you’ve been mulling over or whether you’ve taken some steps on the entrepreneurial path already, we’d love to help. Read some of our Go For It Success Stories [] and get in touch [link}. Our business experts will be delighted to hear from you and to talk you through everything you might need to know to move forward with your business concept.