How to Know If Your Business Is Ready for Wholesale
By Andrea Zoellner, Co-Founder of Keiko Furoshiki
If you run a business that makes physical products, it’s likely you sell your wares online—on your own website or a marketplace like Etsy. Perhaps you also sell at pop-ups, fairs, and consign your items in retail stores in your community.
But how do you take the next big leap into selling your items wholesale? How do you know this is the right step for you? Here are five key things to consider before exploring a wholesale revenue stream.
1. Is Your Product Line Ready for Wholesale?
If you have a curated line of products that sell well, you may be excited to get them into stores across the country. However, scaling up for wholesale means more than just wanting to expand—it requires the ability to fulfill larger orders reliably.
Many business owners dream of wholesaling but have not yet outsourced their manufacturing. If you are still hand-making every item by yourself, you may struggle to meet the demands of a wholesale program. Wholesale orders can be large and frequent, and if fulfilling them is so time-consuming that it eats into your profit margins or leads to delays, it may be a sign that you need to scale up production first.
Ideally, you should be at the stage in your business where you are manufacturing your items at scale, either locally or abroad. Your production process should be streamlined, and your manufacturer should be able to deliver consistent quality and quantity on time.
2. Can Your Margins Handle Wholesale Pricing?
Pricing your products correctly for wholesale is one of the biggest challenges for small businesses. You need to consider market rates, your customer profile, and most importantly, your COGS (Cost of Goods Sold). The formula to calculate this is:
Total Material Cost + Total Labor Cost + Additional Costs and Overhead = Cost of Goods Manufactured
The difference between your selling price and your COGS is your profit margin. While direct-to-consumer sales allow you to keep all the profit, wholesale typically requires you to sell your products to retailers at 50% (or less) of the retail price. This means your COGS must be low enough that you still make a viable profit at wholesale pricing.
Additionally, consider volume: while margins are lower in wholesale, larger order quantities can make up for it. If your pricing is structured to ensure profitability even with wholesale discounts, you’re in a strong position to take this next step.
3. Is Your Packaging Retail-Ready?
Selling your products online or at pop-up events allows you to explain your product’s features and benefits directly to customers. However, in a retail setting, your packaging must do all the talking.
When your product is sitting on a shelf with limited interaction from a store employee, clear and compelling packaging is crucial. It should:
– Communicate what the product is and why it’s special
– Include branding that aligns with your target customer
– Be durable enough to withstand transport and handling in stores
– Comply with any required labeling laws (e.g., barcode, ingredients list, warnings, etc.)
Many small businesses enter wholesale but struggle with sell-through rates because their packaging doesn’t grab attention or communicate enough information at a glance. Testing different packaging styles, getting feedback from potential stockists, and investing in professional design can make a huge difference.
4. Is Your Business Legally and Financially Protected?
Wholesale comes with new legal and financial responsibilities that go beyond direct-to-consumer sales. Before you start, ensure that your business is properly registered and protected. This includes:
– Business Registration & Tax ID: You may need to collect and remit sales tax on wholesale orders, depending on your state or country’s laws.
– Wholesale Terms & Policies: Create a clear wholesale agreement that outlines payment terms, return policies, minimum order quantities (MOQs), lead times, and shipping details.
– Copyright & Trademark Protection: If you have unique designs or branding, make sure they are legally protected to prevent imitation by competitors.
– Insurance: Consider product liability insurance, especially if you sell food, cosmetics, or any item that could pose a risk to consumers.
Taking these steps ensures that you can work with retailers confidently and without unexpected legal or financial setbacks.
5. Do You Have a Plan to Meet Retailers?
Getting your products in front of retailers requires a strategy. Unlike online sales, where customers find you, wholesale requires a more proactive approach. Here are some common ways to connect with stockists:
– Faire, Abound, or Bulletin: These online wholesale marketplaces connect brands with retailers, making it easier to reach buyers without cold-calling.
– Trade Shows: Attending or exhibiting at industry trade shows can put you in front of serious wholesale buyers looking for new products.
– Local Distributors & Sales Reps: Partnering with a distributor or sales rep can help get your products into stores without direct outreach.
– Direct Outreach: Visiting boutiques, specialty shops, and larger retail stores in person (or through email) with a professional line sheet and pricing guide can be effective.
You should also have a wholesale portal on your website or a streamlined ordering process in place, whether through an online marketplace or a direct contact form. Making it easy for retailers to place orders increases your chances of getting stocked.
In summary
Taking the leap into wholesale can be a game-changer for your business. By preparing thoroughly, you’ll increase your chances of success and create a sustainable revenue stream for your brand. To get there, be sure to:
- Scale your manufacturing to meet wholesale demand.
- Ensure your pricing allows for profitable wholesale margins.
- Design packaging that sells itself on retail shelves.
- Get your business administration and legalities in order.
- Set up a system for connecting with retailers and receiving wholesale orders.
About The Author
Andrea Zoellner | Keiko Furoshiki
Andrea Zoellner is the co-founder of Keiko Furoshiki, where she leads sales and marketing, growing the brand’s online presence, partnerships, and sales. With a background in communications, digital marketing, and e-commerce, she has held leadership roles at SiteGround, Automattic, and Kinsta, focusing on brand strategy and customer growth. Combining her experience in brand development, e-commerce, and product-based businesses, she is passionate about helping entrepreneurs navigate manufacturing, branding, and company growth.
