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Whether you’re a product manufacturer or business retailer, selling wholesale goods can be a great way to grow your business. The sales model itself has become increasingly popular in the past decade, with wholesale sites like Amazon, Shopify, Handshake and others helping boost the market and streamline distribution.
As a result, the UK wholesale industry is estimated to be worth £191.3 billion (9% of the UK economy) and is experiencing strong growth – take the retail trade sector, in particular groceries, where industry revenue has grown at a CAGR of 2.0% over the past five years, reaching an estimated £44.2bn in 2024
In this guide, we’ll break down exactly what selling wholesale means, the best items to sell wholesale and how you and your business might get involved in this expansive sales market.
What is wholesale?
Wholesale is the process of selling goods in large quantities to businesses rather than directly to customers. This is done directly (from wholesaler to retailer) or through a middleman (wholesaler to distributor to retailer) and represents a crucial part of ensuring products move efficiently through the supply chain. The best items to sell wholesale tend to be popular, in demand and produced with the confidence that they are likely to sell quickly and easily.
In general, wholesalers purchase items in bulk at lower prices and resell them to retailers, who then sell them to end customers at a markup. However, there are different types of wholesale business models, each with its advantages and approach to distribution:
1. Merchant wholesalers
These wholesalers buy products in bulk from manufacturers and store them in warehouses before reselling them to retailers. They take ownership of the goods, managing storage and distribution.
2. Distributors
Distributors work closely with manufacturers to supply retailers and businesses. They often have exclusive rights to sell certain products within a specific region and may also provide marketing and sales support.
3. Dropshipping wholesalers
A dropshipping wholesaler supplies products directly to customers on behalf of a retailer, without the retailer needing to hold inventory. This model is popular for e-commerce businesses looking to sell without incurring warehousing costs.
4. Manufacturers as wholesalers
Some manufacturers sell their products in bulk directly to retailers, bypassing traditional wholesalers. This allows businesses to buy straight from the source, often enabling them to take advantage of lower prices.
5. Agents and brokers
These intermediaries help connect manufacturers with buyers but don’t own or store the products. Instead, they facilitate deals and earn commissions on sales made.
6. Cash and carry wholesalers
These wholesalers sell products in bulk at discounted prices, often requiring businesses to purchase and transport the goods themselves. They operate on a no-credit, upfront-payment basis.
7. Specialty wholesalers
Focused on niche markets, specialty wholesalers deal with specific products such as organic foods, high-end fashion or eco-friendly goods. As a result, they typically cater to retailers that serve a targeted customer base.
Remember: each type of wholesaler plays a vital role in their supply chain, helping businesses access the products they need while ensuring manufacturers reach a wider market efficiently.
How does wholesale work?
Selling wholesale goods relies on having access to efficient supply chains and streamlined product distribution. Below, we break down the key steps involved in the wholesale process:
- Research: Wholesale manufacturers research and identify market trends to discover the best items to sell wholesale.
- Manufacture: These companies create these items and price them to be sold in bulk.
- Market: Wholesalers will then market their items to the relevant businesses. This is mostly done on online platforms, such as Amazon and Shopify, which act as the ‘middleman’.
- Distribute and sell to retailers: Having identified the best items to sell wholesale, other business owners will search for and purchase goods in bulk from these supplier sites or directly from the wholesaler.
- Re-sell to customers: Retailers then re-price these items to make a profit and sell them to their customers.
Is wholesale a good opportunity for my business?
Wholesale can be a good opportunity for your business, depending on whether you have the resources and flexibility to accommodate the sales model. For example, as a retailer, buying and selling wholesale goods might be the perfect way to get your business off the ground and start making a profit. In addition, online wholesale retailers have made the process much more accessible. As a result, selling wholesale can be good for entrepreneurs looking to begin or expand their retail empire.
However, if you’re a new product manufacturing company or are at a comparatively early stage of business, diving straight into selling wholesale might be overwhelming if you’re not used to high production demands. Here are a few things to consider:
The advantages of wholesale
1. Save time and money
As a wholesale producer or seller, you can reduce the time and money spent on customer marketing. Since B2B (business-to-business) operations focus on selling to retailers rather than individual customers, budgets are typically lower than those of B2C (business-to-customer) businesses.
2. Build strong retailer relationships
As your business grows, you will establish long-term relationships with retailers who prefer to source stock from a limited number of reliable suppliers. These partnerships lead to repeat orders, reducing the need for continuous marketing efforts and providing stability in your sales pipeline.
3. Predictable revenue and growth planning
With steady orders from retailers, you can more accurately forecast revenue, profit margins and EBITDA. This predictability allows for better budgeting and stock management – enabling you to confidently plan for long-term business expansion.
Considerations of wholesale
1. Meeting production demands
Scaling up to meet large wholesale orders requires sufficient production capacity, both in terms of resources and financial investment. New businesses may struggle with the logistics of managing and maintaining high stock levels.
2. Lower profit margins
Wholesale pricing is significantly lower than retail pricing, meaning each unit sold generates less profit than if sold directly to customers. While bulk sales provide revenue stability, the lower margins require careful financial planning to ensure profitability.
3. Breaking into a competitive market
Gaining initial traction as a wholesaler can be challenging, as many retailers have established relationships with existing suppliers. To compete, you could offer lower prices or added incentives, which might impact profitability in the early stages.
Determining your pricing strategy
When pricing products for wholesale, remember that these bulk prices need to be, per unit, lower than the general retail price. While your profits may appear smaller, you should price goods with unit costs and number of units per sale in mind to make a healthy profit. You aim to sell products at a higher price than the production cost, whereas retailers price their products for the customer.
Like retailers, you should still research your client and competitor market to learn what others are buying and selling similar goods for. You also need to identify where, among these competitors, you fit into the market. You don’t want to push wholesale goods that are already well accounted for, as this could result in low sales.
Once you’ve found your place in the market, it’s time to identify your USPs. Do you sell products at lower prices than your competitors? Or perhaps you’re on the pulse with the latest retail trends? All of this determines the value of what you’re producing and selling.
Best items to sell wholesale
Choosing the best items to sell wholesale is key to running a profitable business. To maximise success, wholesalers should focus on products with steady demand, reasonable profit margins and repeat purchase potential. Popular wholesale categories include:
- Clothing and accessories: High-demand, fast-moving items like everyday apparel, seasonal fashion and accessories (for example, bags or sunglasses).
- Beauty and personal care: Skincare, cosmetics and grooming products are strong sellers due to consistent customer demand.
- Food and beverages: Non-perishable snacks, specialty foods and beverages (for example, coffee or tea) tend to attract steady bulk orders.
- Home and kitchen supplies: Cookware, storage solutions and eco-friendly household items are often highly sought after.
- Electronics and accessories: Phone accessories, small gadgets and smart home products can be lucrative options due to strong price margins.
- Office and stationery supplies: Notebooks, planners and office essentials cater to businesses and schools and are often ordered on repeat.
How to sell wholesale products
How and where to sell
First, you need to decide how and where you’re going to sell your wholesale products. Once you’ve determined the perfect price, decide whether you’ll sell goods online, via distribution sites (such as Amazon) or directly to customers.
Both have advantages – online wholesale sites allow for accessible, quick and easy sales, which are often more suited to larger companies that are equipped to deal with regular large orders. Selling directly to retailers helps to build reliable B2B relationships, meaning you can more easily create a substantial customer base and thus garner more predictable profits.
How to market your products
When you first start as a wholesaler, you must identify who exactly you want and need to sell to. Wholesale sites provide a great avenue to identify these client bases and help to attract traffic across markets you may not have been able to reach.
However, once you start building strong business relationships, cross-network marketing may not be as necessary as you’ll have a reliable client base who come to you for the majority of their stock.
Accepting payments
Manage large numbers of units and general sales with a payment system you can trust. The ability to deal with bulk wholesale orders, keep track of invoices and ensure all payments are accounted for is essential when maintaining client relationships.
With Square invoices, you can manage everything on one platform – from sending digital invoices to accepting customer payments and even tracking unpaid orders.
If you don’t want to be a wholesale distributor, it’s essential to have an online platform where you can confidently manage and sell stock directly to businesses without any issues. Square Online is a versatile solution that adapts to any business type, combining marketing and sales into one seamless platform. Additionally, your store should be easy to navigate and visually appealing – both of which can be achieved by building your site in minutes.
If you’re thinking about stepping into the world of wholesale, you should consider whether your business can deal with orders in bulk. If you’re confident in how, where and what you’re selling, then selling wholesale has the potential to be an exciting expansion of your business.
Make sure you have everything you need to get started with Square, whether that’s the appropriate marketing tools to get your name out there or a reliable platform from which to build your wholesale brand.
FAQs
Can wholesalers sell to the public?
Yes, but it depends on the business model. Some wholesalers sell directly to customers through warehouse sales, online stores or bulk discount agreements. However, many operate strictly B2B, selling only to retailers. When wholesalers sell to the public, they may need a separate pricing structure to differentiate between wholesale and retail customers.
How can a small business start selling wholesale?
To sell wholesale, start by identifying a target market and setting competitive pricing that allows both you and retailers to realise a profit. Create a wholesale catalogue with clear order minimums and terms. In addition, ensuring consistent production, packaging and supply chain management is crucial for long-term success.
Can you sell wholesale items as your brand?
Yes, this is known as private labelling. Many manufacturers offer white-label products that businesses can rebrand with their logo and packaging. This allows you to create a unique brand without manufacturing from scratch. However, some wholesalers require minimum order quantities for private labelling, so researching supplier terms is essential.
Where can I buy wholesale goods to sell on Amazon?
Buy wholesale products from suppliers (for example, Alibaba) or directly from manufacturers and distributors. Trade shows, liquidation sales and B2B marketplaces also offer wholesale opportunities. When sourcing wholesale goods to sell, ensure products comply with Amazon’s policies and check supplier reliability to avoid counterfeit or restricted items.
