Selling both wholesale (B2B) and direct-to-consumer (D2C) is a balancing act. On one hand, you want to make your B2B customers happy with favorable pricing, but you don’t want to B2C customers to feel like they’re getting the short end of the stick especially when they’ve supported you in the early stages of your business.
But that doesn’t mean that wholesale isn’t attainable for brick-and-mortar brands.
There are ways you can make your D2C customers feel valued while also helping your wholesale customers turn a profit. Let’s look at why you should consider it and how you can navigate this balancing act.
Opportunities for retailers that sell wholesale
If you run the risk of isolating the sales channel your brand was built on, why would it be worth it to expand into wholesale?
Instead of painstakingly increasing the number of customers you sell individual products to, retailers can sell a large number of items to a handful of wholesale buyers. The concept is simple enough, and depending on which type of business you operate, you may already be familiar with wholesale from the buyer's perspective; but it’s a great option to consider as a seller, too.
“While B2C ecommerce is expected to hit $2.4 trillion worldwide by the close of 2017, it’s less than a third of B2B’s $7.6 trillion,” says Aaron Orendorff, editor of the Shopify Plus blog.
Simply put: Selling wholesale exposes traditionally D2C brands to new growth opportunities, including:
- Increased order volume and average order value
- Access to new audiences and more visibility
- Increased credibility
- Benefiting from another brand’s success and expertise
- More support from a retail partner
Sarah Mitchell commented on this Shopify article about her work with Lux Fragrances, and how they’ve used wholesale to increase sales.
FURTHER READING: Want to learn more about wholesale? Read up on how to scale your retail business through bulk selling.
How to not lose D2C customers
1. Sell different items or offer product exclusives
You’ll want to make sure that your loyal D2C customers don’t feel isolated and like they’re getting a better overall experience from you than from your wholesale customers. One way to accomplish this is to offer select products to your wholesale clients while providing more options to your regular customers. For example, if you have several color variants available for a specific product, sell just a few to your wholesale customers and offer the entire range on your own channels.
Brick-and-mortar retailers can also sell exclusive products to their local market. Maybe it’s a T-shirt featuring a nearby landmark or an item made with locally sourced materials.
You can also give your D2C customers early access to products, giving them an incentive to purchase from you instead of your competitors.
FURTHER READING: Learn how one paper designer made the jump from wholesale to multi-channel retail.
2. Create a great customer loyalty program
One thing you can offer that your wholesale customers may not is a great customer loyalty program. According to a 2016 Bond Loyalty Report, 34% of shoppers feel that loyalty programs are trustworthy, and nearly three-quarters are more likely to recommend brands with good loyalty programs.
In Boulder, Colorado, Helping Hands sells both B2B and B2C. The retailer has a customer loyalty program that rewards retail shoppers with store credit. It’s not difficult for repeat customers to rack up credit and use it for discounts or even free products — giving them an incentive to buy direct.
Get some inspiration for your own customer loyalty program:
- Tap Into These Key Customer Triggers to Optimize Your Retail Loyalty Program
- 8 Ways to Use Gift Cards to Build Customer Loyalty
Reward loyalty everywhere customers shop
Only Shopify’s integrated loyalty apps let customers collect and redeem loyalty rewards when shopping with you both online and in store–no complicated workarounds or required.
3. Set a smart pricing strategy
When it comes to balancing B2B and B2C sales, you’ll want to approach pricing on both ends strategically. Of course, wholesale clients will expect to pay lower prices. But you can provide B2C customers with exclusive promotions that wholesale customers don’t get. This includes coupon codes, free gifts with purchase, and even product bundles like this one from REI:
Here are some additional resources to help you offer attractive pricing to your D2C customers:
- 14 Essential Giveaway and Contest Ideas for Retailers to Boost Traffic and Engagement
- 9 Strategies for Profitably Pricing Your Retail Products
You’ll also want to make sure that your B2C customers aren’t exposed to wholesale prices. Toronto-based Soul Chocolate, for example, created a wholesale registration and login to keep the B2B pricing separate.
4. Dropship your products on behalf of wholesale clients
Dropshipping can be a great way for retailers to grow their B2B ecommerce sales. Essentially, dropshipping in a B2B context is when a customer purchases your products from another website (your wholesale client’s) and you handle the shipping.
This a great way for local retailers to reach global audiences that would otherwise be inaccessible.
We’ve put together a few resources to help you determine if dropshipping is the way to go:
- The Ultimate Guide to Dropshipping
- Dropshipping: The Easiest Way to Sell Online
- Make, Manufacture, Wholesale or Dropship: The Pros and Cons of Each Model
5. Grow slowly to maintain consistent customer service
One thing to always remember: Don’t sacrifice the service you provide for your D2C sales. If customers notice a downturn in the level of service, you’ll start to lose their trust. Eventually, you could lose their sales too.
- 7 Retailers Who Are Embracing Modern Customer Service
- 8 Customer Service Quotes That Will Transform the Way You Run Your Business
- High-Touch Customer Service: 5 Examples of Retailers Offering Elevated Experiences
- The Apple Store Guide to Insanely Great Customer Service
Grow your wholesale channels slowly and establish the infrastructure that can help you get to the next stage of growth. While rapid growth may be the immediate goal, sustainable growth is what forward-thinking retailers focus on.
One key area to focus on to support sustainable growth is your team. And this isn’t just your sales associates who are helping customers on the floor. You serve a completely different customer base, so you’ll need employees to support those new customers.
For example, you’ll need sales associates who are dedicated to serving your B2B customers. They aren’t greeting customers who stroll in your shop; they’re selling products to help those wholesale customers make their own sales and profits. Wholesale customers also likely need more customer support, so you’ll want a support team dedicated to providing that as well.
But don’t throw your D2C customers to the wayside. While they spend less per order, they’re the lifeline of your business. And they have different expectations.
“To ensure a high level of customer service for both consumer and wholesale accounts, ensure that you’re staffed to support each adequately,” says Kristina Libby, founder of Lohm and professor at New York University. “At the end of the day, your consumers take precedent. They demand faster customer support than a traditional wholesale account and are far less lenient.”
Consider two key stages when building your team: launching the wholesale side of your business, and then maintaining it after launch. You may need more hands on deck for the first part, and you might also want to look to existing staff on the D2C side of things to chip in and help. Once set up, ensure your team can keep things running smoothly on both sides of the business.
Logistically, you’ll want to also consider expanding into a warehouse space (if you haven’t already or don’t have room at your store) to accommodate wholesale orders. This requires staffing up your retail operations team to be able to organize and fulfill large orders.
And if you haven’t already, invest in inventory management software that can centralize your data and sync it across multiple channels.
Grow both your wholesale and D2C sales
Yes—it's possible to grow both your wholesale and D2C sales without jeopardizing on or the other. Follow the best practices in this article to get started.
Get started with Shopify POS
Only Shopify gives you all the tools you need to manage your business, market to customers, and sell everywhere in one place. Unify in-store and online sales today.