Many companies looking to expand their business and cover as many markets as possible turn to wholesale platforms. According to analysts, in 2021, the profit of the wholesale market in the US alone was $10 trillion. This confirms that this business model is not only effective but also promising.
Wholesale e-commerce is a type of e-commerce in which products are sold in bulk via the internet. This business model is more focused on providing B2B services without direct cooperation with consumers.
The main functions of wholesalers are
Purchasing products from manufacturers in the required quantity.
Organizing proper storage conditions.
Delivering products to retailers on time.
It may seem that wholesale is an outdated trading channel, but digital technologies and the internet have taken trade to a new level. Modern wholesalers, like retailers, are interested in finding new customers, expanding their business and using effective promotion channels. The only difference is that they are interested in working with retailers, which makes it possible to sell products in large quantities with lower shipping costs.
Dinarys invites you to learn more about what a wholesale platform is, its advantages, and how to create a profitable platform for your business.
Types of Wholesalers
Wholesalers are one of the important components in the chain of products finding their way from manufacturers to end consumers. The role of wholesalers in the supply of products (or services, in some cases) is a little more complex than the usual intermediation between manufacturers and buyers. This, in turn, creates different types of wholesalers.
There exist many types of wholesalers that can be classified according to various criteria. For example, they can be divided into types depending on the specifics of the products or services provided, the region of operation, the format of cooperation with retailers, etc.
The classification used the most often is according to the specifics of the services provided. Based on this, the following types of wholesalers can be distinguished:
Manufacturer wholesalers: This type of wholesaler deals with the production and further promotion of products to consumers retailers. They provide almost a full range of sales services except for direct deliveries to buyers.
Retail wholesalers: Unlike manufacturer wholesalers who only do business with other sellers, they also provide their products or services directly to buyers. In this way, sellers can monitor customer demand, use more sales channels, and generate supply and demand for different types of buyers.
Pure wholesalers: This is perhaps the most traditional type of wholesaler, as they purchase products from manufacturers and then resell them to retailers. They are not involved in the production process and do not have direct contact with end customers.
Brokers and agents: Another common type of wholesaler in the product promotion chain. Like pure wholesalers, they cooperate with manufacturers but are not involved in the production process. Their purpose is to offer products or services on behalf of the manufacturer to interested buyers.
This classification indicates that the wholesale B2B cooperation model is quite diverse and goes beyond the usual intermediary between manufacturers and end consumers. This means that wholesale is not only effective but also has many opportunities for development in the future.
Key Challenges in the Wholesale Industry
The wholesale trade in the modern world faces new challenges that require a timely response. It is not enough just to supply products in large quantities - it must be done using modern technologies. With the advent of e-commerce, wholesale has encountered not only benefits but also challenges that need to be addressed.
The eternal question of wholesale traders is how much product needs to be ordered to satisfy the needs of customers. With the slightest error in the calculation of inventory, you can either lose customers due to shortage or incur losses associated with long-term storage of unsold products. Therefore, wholesale companies need to not only know what exactly customers need at the moment but also accurately calculate the quantity so as not to suffer losses.
E-commerce wholesale vs traditional sales methods
Sellers are switching to e-commerce, and wholesalers are no exception. Vendors offering high-volume products are growing to be worthy competitors for retailers, but not everyone can achieve the desired heights. The reason is simple - there is no reliable working tool for e-commerce. It is not enough to simply create a website or an online store. It should be a professional platform that will take into account all the specifics of wholesale. Unfortunately, not everyone is ready to make the necessary investments.
This is not just about customer satisfaction. Most wholesale companies are intermediaries between manufacturers and end-users, but they are expected to meet the same requirements as retailers: a personalized approach to customers, an efficient delivery system without delays, and the possibility to purchase the necessary product here and now for everyone. On the one hand, this can be achieved with an effective wholesale platform, but on the other hand, no innovation can take root without changing the general approach to doing business.
Moving away from the intermediary role of wholesalers
The world of business is in constant flux. More and more wholesale companies are moving away from their traditional intermediary role and into direct sales. This wholesale B2B dropshipping model has many advantages, among which are mutual economic benefits for sellers and buyers and reduced delivery times. To achieve this, they need to use modern technologies wisely. For example, applying automated processes for product distribution and delivery.
Retailers, like their customers, want more than just the product they need delivered as quickly as possible. They also want an individual approach, prompt answers to their questions or solutions to problems that arise. Again, an e-commerce platform can help with this, as well as various communication channels: chat bots, social networks, instant messengers, and others. This requirement also applies to marketing campaigns. It is not enough to just leave your business card or call - you need to declare your presence using all available promotion channels
The challenges wholesalers face cannot be resolved without changing the traditional way of doing business. The transformation of wholesale trade in the digital era is where the efforts of wholesalers should be focused first and foremost.
How Wholesalers Benefit from E-commerce
Despite the seeming complexity of the challenges, they can be resolved. It is enough to slightly change the approach to doing business and employ useful e-commerce tools. In particular, a platform designed specifically for the needs of wholesalers can solve many problems, including
Automation of work processes: The introduction of automation tools makes it possible not only to reduce the time spent on completing work tasks. With their help, you can also monitor the quantity of products on the website, deal with orders online, and track the entire supply cycle (including returns).
Service improvement: E-commerce not only simplifies doing business, it also helps to collect and analyze data on customer experience. Based on analytical data, you can create a system of personalized offers, as well as maintain effective communication with customers 24/7.
New opportunities for promotion: Online wholesales also help in marketing. Social networks, email distribution, mobile applications - the choice of methods is quite wide. Moreover, they can be used not only as promotion channels, but also as trading platforms. With their help, you can attract new customers and even enter new markets.
Sales optimization: Reducing the time it takes to complete the required processes opens up opportunities for company growth. Wholesales can be increased with e-commerce tools by analyzing the shopping experience, improving the service, tracking purchases and sales, and much more. Wholesale B2B e-commerce offers the opportunity to increase production volumes while decreasing their price, which ultimately helps to increase profits and reduce costs.
Attracting a new target audience: Traditional wholesaling methods are unlikely to help expand your business, especially when it comes to entering new markets. This comes with great risks and costs. But e-commerce is capable of solving this problem. With the help of its tools, you can find new buyers in other regions without spending unnecessary effort and time. And entering new markets and attracting new customers is the most significant factor in the development of the wholesale business.
Many wholesalers may be hesitant to use e-commerce opportunities for their needs. But this fear is completely unfounded. Many wholesale giants, such as Alibaba, have already proven their effectiveness in wholesale. In addition, you can always use the help of professionals who will help with developing a reliable platform for online wholesale and suggest the most effective promotion methods.
Like any other online selling space, e-commerce wholesale has some iconic trends that determine its further development. The most important e-commerce wholesale trends, according to Dinarys, are the following:
Sustainability: Mindful consumption is becoming a steady trend not only in the retail sector but also in wholesale. Many consumers, most of whom are millennials, are already opting for environmentally friendly products. It also helps to shorten the supply chain and create a sustainable workflow without wasting time. Thus, you can not only sell products in large volumes but also form a positive image of the company with its value system.
New business model: The traditional B2B wholesale trade approach has already exhausted its possibilities. New trends offer a new, more effective model - B2B2C. Its essence is the elimination of all possible intermediaries in the sales process with maximum convenience for each participant. Most transactions take place online, where manufacturers or wholesalers can sell their products directly to end customers. This makes it possible to reduce costs and expand the target audience.
Cloud technologies: With the help of a cloud warehouse management system (WMS), it is possible to achieve a comprehensive wholesale integration of all systems used in online wholesale. Today, this is not even a trend but almost a necessity. Cloud technology not only ensures the smooth operation of all systems, but it is also essential for establishing automation processes, ensuring operational flexibility, and optimizing key supply chains. In this way, you can facilitate the transition to new business models and implement Platform-as-a-Service solutions.
Online wholesale trends are largely determined by the general requirements of the modern market. At the same time, they take into account the specifics of wholesale and are focused on it.
Building a Wholesale Platform with Magento
Developing a reliable wholesale platform is a task that requires a thoughtful approach. Two types of platforms are especially popular with wholesalers: Magento and Shopware. Each of them has its design specifics. Dinarys invites you to learn more about each of them.
Magento Open Source out-of-the-box B2B functionality
Magento is widely regarded as one of the best wholesale B2B software on the market today. Out-of-the-box functionality includes Minimum Order Amount feature that controls the minimum buying volume per user after all taxes and discounts. It allows managing the quantity setting, products that are included or excluded from the minimum amount policy, shipping addresses from the same user, and more.
With the Minimum Order Amount feature, businesses are able to offer free or discounted shipping and ensure more deals with the reserve function. As a result, a company increases its average revenue per user and estimates minimum revenue per certain period.
To adapt better exactly to B2B market conditions, however, you will need to go to the Magento Marketplace and pick a bunch of extensions based on your particular business needs.
Dinarys specialists will always help you assess the business needs. We will not only help with the creation of a reliable platform focused on the specifics of wholesales but also suggest a personalized approach to further promotion.
Magento extensions for B2B
The extensions, listed below, are perfect for B2B sales. If you already have a working website on the Magento Open Source platform, it can be enough to add a few plugins to optimize its work. If not, you should consider Magento/Adobe Commerce or developing a platform for online wholesales from scratch.
The B2B Company Credit plugin is one of the payment methods for verified customers when the purchase conditions are followed (for example, making a minimum or maximum purchase without exceeding the credit limit).
Implementation of company accounts into the platform, which will save time and also help to create a flexible system of subaccounts.
The Magento Wholesale Private Shop option, which restricts access to the store for unregistered users or enables you to create closed groups of buyers who will have access to special pricing or delivery conditions.
The B2B Registration extension, which gives the administrator time to verify the seller or buyer account before activating it.
B2B Category View for a quick view of the products of interest, which will be especially useful when re-ordering the same product directly from the list.
The choice of a specific type of Magento extension depends on the needs and scale of the business. Our company can help you decide and answer your questions about the development of a wholesale B2B trade portal.
Magento Commerce/Adobe Commerce: built-in B2B feature list
Magento Commerce offers built-in B2B sales tools, including
Catalog of companies: Multiple companies can create shared accounts with clear roles. This makes it easier for customers to make corporate purchases and simplifies the management process for merchants. It is also possible to create hidden catalogs with individual prices for clients.
B2B Quote option: In the wholesale trade, it is almost always personalized. To avoid the influx of calls and emails about the price of a product, you can add a client quotation system. This option will allow regular customers to search for the best price offers. You can also add an option to send a request using an online form.
Quick order: Another useful option for regular wholesale buyers. You can add a repeat order button to the personal account if the client knows the item's SKU and the required quantity. Frequently repeated purchases can also be formed into a list of applications, which saves time on checkout.
Purchase orders (PO): It allows commercial customers to pay for authorized purchases by referencing the PO number. The purchase order is authorized and issued in advance by the company. During checkout, the customer chooses the Purchase Order as the method of payment. Upon receipt of the invoice, the company processes the payment in their accounts payable system and pays for the purchase. This option helps to secure the buying process and avoid unpleasant cooperation with insolvent customers.
Custom Feature Development for Your Wholesale Platform
To get a solution that fully fits business needs, companies often opt for custom feature development. It allows targeting requests of the audience while taking into account specific business workflows. Our team of specialists offers unique business solutions:
Flexible integration with the delivery and payment system chosen by the customer.
Integration with cloud technologies for multichannel sales at all levels.
A shipping calculator that will help you calculate the purchase price for each customer based on the total cost of their order or shipment in parts.
Order management through the user account, so that the client can edit it before transferring it to the administrator.
Why Wholesalers Choose Shopware?
Shopware is another popular website-building platform for the needs of wholesalers. It is an open-source platform that can be tailored to meet the needs of businesses of all sizes. The key features of this platform are
Ease of use: Thanks to a wide number of ready-made solutions, it is possible to create a wholesale B2B online platform from scratch quite fast. Additionally, it can also be filled with custom solutions developed for your company.
High performance: Even with a large number of buyers, your Shopware platform will run smoothly due to the scalability of the entire architecture. Servers can be added to perform certain tasks so as not to overload the system during conversion. At the same time, you can easily track traffic on the platform in almost real-time.
Availability: Any company can afford the costs of developing an online wholesale platform. For a reasonable cost, you can get a full set of functions.
Apart from this, Shopware has many other benefits that make it popular with users.
Useful Shopware extensions for the B2B sector
Most of Shopware's wholesaling tools are focused on customer convenience. To simplify the process of bulk shopping for customers, the following tools can be added to the platform:
Login to separate sections only for authorized users: You can lock individual sales channels so that a seller's products or some of them will be available for viewing and ordering only after logging in.
A "Price on request" button: Customers can find out the individual cost of an item by simply clicking this button. In this case, the minimum price will be set by the administrator, and the higher price will be displayed automatically when the cursor is positioned in this section.
A B2B VAT plugin: A very useful tool, especially for platforms targeting an international audience. With its help, customers can immediately see the amount of tax that will need to be paid when purchasing and delivering products. The tax is not added to the cost of the purchase - it can be calculated separately based on the established tax laws (they can also be added to the platform's operating rules).
A quick order option: It will be useful for buyers who have previously made wholesale purchases on the platform. You can place the quick order button in the personal account.
Matrix order: With this plugin, you can select the same product in different variations (for example, the same product in different sizes and colors). This option can be made both public and hidden for unregistered customers.
For companies looking to get a decent product at an affordable cost, Shopware might be the perfect option.
Equip your store with Shopware B2B Suite
The end-to-end solution Shopware Enterprise, which also comes with the Shopware B2B Suite extension, is ideal for B2B and B2C businesses. The platform provides both classic and unique wholesale B2B app solutions. The advantages of developing a wholesale platform using the Shopware B2B Suite are
The ability to distribute roles between team members.
Grouping orders for each customer.
The function of quick orders for regular customers.
The ability to create individual offers in a personal account.
Shopware B2B Suite tools make it possible to simplify the ordering process for customers and at the same time optimize the platform itself. These include:
Central B2B panel: With the help of this panel, each client (even if they are using the services of your platform for the first time) can access the functions they need. It also provides convenient navigation on the website and opens access to the buyer's personal account.
A Company section: It is a directory that contains all the information you need about the companies that partner with your wholesale platform. The platform administrator can manage the directory and grant each member a specific role.
Statistics: This section contains and structures information about the work of the online platform. In particular, you can view the number of orders made in a certain period. All information can be accessed in the form of graphical data, and more detailed information opens with a simple click of the mouse.
An Orders section: It not only provides information on the number of orders, but also the stage of their implementation. For the convenience of the administrator, placed orders and pending orders are placed in separate tabs.
Lists of orders: A useful option that helps to plan the work of the platform.
Options for clients: You can place sections in the center panel to help customers control the buying process. The "Quick order", "Offers", "Order number" sections can help with this. With their help, customers can complete a purchase indicating only the quantity of the product and its number in the catalog, receive personalized purchase offers, or save their order number by simply importing a special file.
Shopware B2B Suite provides an opportunity to establish a collaborative process between manufacturers and buyers. At the same time, you can always add unique solutions required for a particular client.
The modern world of wholesales is gradually changing its specifics. Its main features are still its focus on the company as the main consumer of products and bulk purchases. At the same time, the ways we do wholesale are changing, placing priority on customer needs, quality service, and multichannel promotion.
Dinarys offers a comprehensive service to build the best e-commerce platforms from wholesale B2B. With our team of specialists, you not only get a reliable tool for your work. You can also rest assured that it meets all the demands of today's B2B market. Contact us today and test it out!
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