Protecting Your Wholesale Relationships If You Start Retailing

We have covered the transition from retail to B2B, but as yet we haven't considered starting to sell directly to the consumer after an initial period of pure B2B sales.

As usual, what follows comes from my experience with suppliers, some of whom made the leap to direct retail after several years of B2B trading. This is also heavily skewed towards e-commerce rather than bricks and mortar sales, and is less of a 'how to' and more of a 'things to think about' kind of a post.

So why might you decide to start retailing your products? Here are a few of the possible benefits:

• Retail offers higher margins than wholesale
• Increased revenues and faster turnover of stock
• Greater opportunity to connect with your customers
• Create or build upon brand personality

It is a fact that, if the consumer can buy direct from the brand they usually will. Whether by choice or by the fact search engine algorithms naturally favour the brands' websites. So if you are going up against your online stockists, you will inevitably take a share of their customers.

So, with this in mind, if you intend to run wholesale and retail operations alongside each other you need to protect your relationships with stockists. There are steps you can take to make the change easier on your wholesale customers. You may decide to apply some of the ideas below to a few key wholesale customers or all of them. It really depends how important your wholesale operation is to you going forward.

• Let them know about your plans as soon as you can.
• Give them timescales so they can look at their current retail offering and perhaps 'spread their risk' by sourcing more suppliers.
• Be honest about your intentions and answer any questions they might have.
• Be clear on your pricing strategies. Common fears are that the supplier will discount to a level that the retailer will never be able to compete with, that they will offer exclusives that the retailer can't access. Obviously you don't want to make any promises that you later can't keep, but if you can give reassurances that's always good.
• If you do have some very strong relationships that you need to protect, think about whether you can offer them any exclusive products or promotions they can pass on to their customers only.
• See if you can plan your advertising so that you aren't fighting with your key stockists for customers. Similarly, take care if you are in an industry that sells at events.
• Keep talking to them, especially in the early days.

You have every right to market your products directly to the consumer, and it will almost certainly bring benefits to your business. Just remember that this will impact your stockists and they may not be quite as excited about your new direction! You may like to have a look at my post which suggests ways to keep your online retailers happy for more ways to look after your retail partners.

Further Reading:
Getting The Best From Your Wholesale Customers