What is Wholesale?

Wholesale Defined:

The idea of wholesaling is almost as old as the idea of trade, itself.  When a company or an individual purchases a product in bulk with the intention of selling it to the end user for a profit, they are engaging in a wholesale purchase.  This includes all  everything from Wal-Mart or Amazon buying multiple shipping containers of a single product for their warehouses, to the college student who buys a a couple bags of Mardi Gras beads to take to spring break and sell to his/her friends for a couple bucks of profit.  All industries, most companies, and almost all products have some sort of wholesale stage in the purchasing cycle. The topics covered in the following sections will get you started if you're new to the world of wholesale purchasing.

Things to Consider Before You Start

Do you have space to store inventory?

This is a major factor to consider.  When you are working with a company who sells wholesale, they are trying to sell you the largest bundle of products possible.  They often offer incentives to purchase larger quantities, such as discounts, free merchandise or other perks to incentivise you to take more product at a time.  Each transaction costs money, so if a manufacturer or distributor is offering wholesale prices, they'll be expecting you to take some sort of bulk delivery.  The idea here is to reduce their cost per piece sold by increasing the size of transactions.  The more they save, the more likely they are to pass along deeper discounts.  When purchasing wholesale home decor it's essential to consider space requirements.  You don't want to end up with more product than you can store in your warehouse (It doesn't matter if you've got a 100,000 Sq ft warehouse or if you're using the corner of your friend's garage... You must consider space availability BEFORE you place any orders!

 

Can you afford bulk buys?

Once you know how much space you have available to store your wholesale lots of home decor, you'll need to consider your budget.  Ideally, your budget will be closely tied to your available space.  

 

Do you have a liquidation plan?

This is a major factor to consider.  When you are working with a company who sells wholesale, they are trying to sell you the largest bundle of products possible.  They often offer incentives to purchase larger quantities, such as discounts, free merchandise or other perks to incentivise you to take more product at a time.  Each transaction costs money, so if a manufacturer or distributor is offering wholesale prices, they'll be expecting you to take some sort of bulk delivery.  The idea here is to reduce their cost per piece sold by increasing the size of transactions.  The more they save, the more likely they are to pass along deeper discounts.  When purchasing wholesale home decor it's essential to consider space requirements.  You don't want to end up with more product than you can store in your warehouse (It doesn't matter if you've got a 100,000 Sq ft warehouse or if you're using the corner of your friend's garage... You must consider space availability BEFORE you place any orders!

 

Do you have space to store inventory?

This is a major factor to consider.  When you are working with a company who sells wholesale, they are trying to sell you the largest bundle of products possible.  They often offer incentives to purchase larger quantities, such as discounts, free merchandise or other perks to incentivise you to take more product at a time.  Each transaction costs money, so if a manufacturer or distributor is offering wholesale prices, they'll be expecting you to take some sort of bulk delivery.  The idea here is to reduce their cost per piece sold by increasing the size of transactions.  The more they save, the more likely they are to pass along deeper discounts.  When purchasing wholesale home decor it's essential to consider space requirements.  You don't want to end up with more product than you can store in your warehouse (It doesn't matter if you've got a 100,000 Sq ft warehouse or if you're using the corner of your friend's garage... You must consider space availability BEFORE you place any orders!

What about drop-shipping?

What is it?

Drop-shipping is a viable alternative for wholesale buyers who may not have the space or budget available for large bulk purchases in the beginning.  A lot of large companies actually use drop-shippers behind the scenes to minimize their inventory investments.  Companies such as Wayfair, Amazon, Jet, Sears, and many others never touch the products that are being shipped to your home.  Those products are often being drop-shipped blind (using the retailer's brand on labels and packaging, rather than the wholesaler's) from the wholesaler's warehouse.   Many , but not all, distributors and manufacturers offer this service.

Why drop-ship?

As the business world changes, retailers are often looking for ways to maximize their return on a minimal investment.  Drop-shipping is a great way to do this.  You may find, as you curate your offerings, that you only want to stock a few core items, but you'd like to offer dozens, hundreds, or even thousands of related products.  This is where drop-shipping as a component of your business can be extremely helpful.  You can offer a wide selection without investing much space or money into a massive warehouse full of inventory that may or may not sell.  

How do I start?

If you're searching for companies who drop-ship, the following sampling of resources can help you locate and contact those companies:

Curate & Customize

Don't try to do it all

Leave that to the retail giants! Chances are, you'll never be as big as Amazon, Target or Wal-Mart, so it's important to find your niche, rather than trying to offer everything to everyone. Even looking at "Home Decor" as a selling category can get deeper than you probably want to start. Consider just one style of home decor.  You might focus on rustic home decor, modern or contemporary home decor, just lamps and lighting, or framed prints.  Find your niche and master it.  In a world of retail giants, this is the only thing that can set you apart from them. Chances are, Amazon already carries everything you want to sell.  Most people don't want to go through the hundreds of pages of products that won't interest them, though, so they'd rather pay a couple dollars more by finding a store or web site that caters to exactly what they are looking to purchase.  If you own a store that only sells wall art, people will learn to look at you first when shopping for something to go on the bedroom wall.  If you specialize in rustic accents and log furniture, you won't get the industrial loft dwellers, but you'll have a steady stream of customers who decorate in a rustic lodge style.  

Curate

Curated collections drive repeat traffic.  This is true for both foot traffic and web traffic.  There are simply too many choices for the average person today.  Part of the value in curated collections is that you've already done the work of finding things for your niche market and pushing aside everything else.  This takes time.  It takes a deep understanding of your target market.  It takes market research and it takes persistence.  But, at the end of the day, a well curated collection will have a greater value for your customer.  This means you can charge a little more, build a little stronger relationship, and lock that customer in for life.

Customize

There are so many ways to offer customization for your customers.  "Private Label" is one of the favorite buzz words used by amazon retailers.  They find a company with a product they believe they can sell, and they pay a slight premium to slap their own brand name on it. Wayfair has mastered this game, and might be one of the best placed to look at how to private label home decor and home accent products.  Very few products on wayfair.com are listed under the brand that actually sells them.  Wayfair has very carefully curated their entire product offering into their own brand sections.  When you receive a product is is often marked with tags from the original brand, but on-site it's listed as something such as "Manufactured for Orren Ellis by 7055, Inc." In this case, the original brand is 7055, Inc, but when on the Wayfair site, you'll see it listed as part of the "Orren Ellis" brand.

Another customization option is to literally customize the product and/or packaging.  Most wholesalers in the home decor industry will use custom packaging or can make slight design changes for companies who buy in large quantities.  Keep in mind that when requesting customization, that you'll need to plan for a large enough bulk purchase to make it worth disrupting the wholesaler's normal production schedule.  Custom products and custom packaging take more time than standard production, so you should always expect an up-charge to cover any added expense to the wholesale supplier.

Hit the road RUNNING!

Styles Change Quickly

If you're still serious about getting involved in the home decor industry and buying wholesale, keep in mind that trends change fast in this industry.  Think of it as "fashion for your home." Just as you wouldn't want to get stuck with 700 Cases of men's shoes that have just gone out of style, you won't want to get stuck with 75 framed oil paintings in colors that went out 2 years ago.  Plan wisely.  Know the trends.  Have a marketing plan in place (as well as an early liquidation plan) so you don't end up tied up with a pile of inventory that gets so dated it looks second-hand.  

Try us out...

At 7055, Inc we love working with retailers!  Fill out the form on the right to let us know how we can use our wholesale knowledge to help your retail business!