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From DTC to Wholesale: How to Know When Your Business Is Ready

4 min read
Jun 4, 2024 3:02:22 PM

Expanding from your DTC business into wholesale can be a significant step that can open up new revenue and growth opportunities.

Making sure you nail this expansion, however, means you need to arm yourself with the right information. 

Fortunately, we know a thing or two about the wholesale business, so we’re here to provide that information so you can decide if it’s the right time to add a wholesale component to your DTC business, and the steps you need to take to nail that expansion. 

The Benefits of Adding Wholesale to a DTC Business

Before diving into the timing, here’s a quick look at why adding a wholesale component can be beneficial:

  1. Increased Revenue Streams: Wholesale can provide a steady and predictable source of income, balancing the sometimes unpredictable nature of DTC sales.
  2. Wider Market Reach: Selling wholesale allows your products to reach a broader audience through various retailers.
  3. Economies of Scale: You’ll start seeing higher order volumes, DTC to wholesale means you’re moving from carts from a few items to bulk orders
  4. Brand Exposure: Having your products in multiple retail locations increases brand visibility and recognition.

Theres much more to learn about the process of transitioning from DTC to wholesales which takes time and has many difficulties along the way.

Your 5-Point Checklist to See if It's Time to Add Wholesale

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  1. You’re Seeing Consistent DTC Success
    • If your DTC business is thriving, with steady sales and a loyal customer base, it might be time to consider expanding.
    • Consistent success in DTC often indicates a demand that can be scaled to a wholesale level.
  2. You Have Excess Inventory Capacity
    • If you find that you have excess inventory or production capacity, wholesale can be a way to utilise this efficiently. This is especially true if your production capabilities exceed the demand from your DTC customers alone.
  3. You’re Seeing the Market Demand
    • If retailers or other businesses are expressing interest in carrying your products, it’s a strong indicator that the market is ready for you to expand.
  4. You Have Reliable Manufacturing
    • Your business should have streamlined efficiencies with your supply chain to handle larger volumes. This includes having efficient production processes and consistent product quality.
  5. You’re Financially Stable
    • Expanding to wholesale requires an investment. Ensure your business has the financial stability to support this growth.
    • Analyse your financials to determine if you can handle the initial costs and potential risks associated with scaling up.

How RepSpark Fits Into Your Wholesale Expansion

RepSpark, a leader in B2B wholesale platforms, offers tools that can significantly ease your transition into wholesale.

With features like digital catalogs, custom assortments, virtual showrooms, online order entry, and more, RepSpark provides everything you need to manage and grow your wholesale operations efficiently.

Our platform is designed to help brands hit their numbers, cut costs, and better serve their customers. 

Preparing for the Transition

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  1. Create a Wholesale Strategy
    • Develop a clear strategy outlining your wholesale goals, target market, pricing structure, and marketing plan.
    • This should include a detailed analysis of how wholesale fits into your overall business plan.
  2. Set Competitive Pricing
    • Retailers prefer to have a 40-60% margin on their products so be sure provide an enticing wholesale price that protects your margins while also providing incentive for retailers to make profit.
  3. Streamline Operations
    • Enhance your operational efficiency to manage larger orders and ensure on-time fulfillment.
    • Invest in technology and systems that support inventory management, order processing, and customer relationship management.
  4. Build Relationships
    • Networking is crucial. Build strong relationships with potential wholesale customers, distributors, and industry contacts.
    • Attend trade shows, join industry associations, and leverage online platforms to connect with potential partners.
    • Take a look at the partners we're integrated with here. 
  5. Marketing and Sales
    • Develop a marketing plan specifically targeting wholesale customers.
    • Use a combination of digital marketing, direct sales, and relationship-building strategies to attract and retain wholesale clients.
    • Hire sales reps and someone to manage your wholesale channel, as you want someone who has experience in the nuances of the industry. 

Questions You Might Have About Going from DTC to B2B Wholesale

What are the key differences between DTC and B2B Wholesale?

Some key differences include pricing strategies, sales volume, customer relationships, and marketing channels. B2B wholesale involves selling larger volumes at lower profit margins but offers the benefit of steadier cash flow and broader market reach.

What are some pros and cons of adding a B2B wholesale component? 

Pros include increased revenue, diversified sales channels, higher sales volumes, and enhanced brand exposure. Cons include lower profit margins, increased competition, and potentially higher overhead costs. 

Adding a wholesale component to your DTC business can be a game-changer, offering numerous benefits and growth opportunities. By carefully assessing your business’s readiness and strategically planning the transition, you can successfully expand your reach and increase your revenue streams. 

If your DTC business shows signs of consistent success, excess capacity, market demand, operational efficiency, and financial stability, it might be the perfect time to take that plunge into wholesale.

Creating a successful wholesale strategy involves identifying ideal wholesale customers, setting competitive prices, establishing clear terms and conditions, and building strong relationships with wholesale clients. RepSpark's platform can be your secret weapon in your expansion into wholesale.  

If you're interested in learning even more about the DTC to wholesale addition, then check out our Complete Guide to Going from DTC to B2B for more information. 

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