We’ve developed a simple wholesale framework for the situation facing many producers and retailers of everyday essentials like groceries, health & beauty, baby, laundry, cleaning products, etc.
Our aim with the wholesale framework for everyday essentials is to clarify and simplify things so that we can provide better solutions to producers, brands and retailers.
The two main assumptions:
- Retailers generally operate a model which requires low prices, low costs, high volume and great products.
- Producers must often fit into this retail model in order to sell their products in the retailer’s outlets.
Below is the breakdown of the four factors in the wholesale framework for every essentials
Low prices relative to the competition:
People generally want to buy everyday goods at the best price. We’re all open to a better deal on the things we buy, especially on the items we buy every week. Retail is a competitive market. Retailers must offer a low price or a great deal to consumers. If not, we go to the next store. Good value at a lower price keeps consumers interested.
When retailers offer low prices on everyday essentials to get the sale, their profit-per-item is low. As a result, retailers need to sell more to grow their profits. Ditto for producers.
With low profits-per-item, retailers and producers have to keep their operating costs low. Things like supply chain, transaction and administrative costs must be as low as possible.
Great products and great brands:
Finally, and importantly, in order for retailers and producers to sell higher volumes, they must have great products with brands that attract consumers. Regardless of the name on the packaging and avoiding semantics, let us assume every product you can buy is a brand. (With own-label goods, there may be multiple brands for a single product.) In order for a producer’s brands to stay on the retailer’s shelves, it must attract enough sales.
As long as the above four criteria is met, retailers and producers have a mutually dependant relationship.
The end result can be a healthy long-lasting wholesale relationship based on successfully producing, stocking and selling consistently good products, at high volumes volumes and low cost overheads.
We have a number of market-leading innovative solutions to help producers and retailers collaborate, specifically on our wholesale eCommerce platform, iStockist.
Any questions? Feel free to contact us.