MYGROUNDUPSTARTUP Week 9 – “Wholesale vs Retail”

February 11, 2022

I still have no idea what I’m going to do about numbering the clocks. No clue. I’m just going to have to do what I can and hope that eventually, I can come up with something. There are still some different numbering styles I can do. I just feel so overwhelmed by this. I don’t know how I’m going to do this now. 

At some point, I will need to build a website. I don’t know anything about that, but it doesn’t worry me because you can learn anything on the internet. Everything you could ever want to know or do is just a YouTube tutorial away. That is an upcoming task on my to-do list. Build a website. I really need to buy a laptop too. I don’t have one currently, I just mooch off my family. Just what I need, another big expense. 

I’ve been debating who I’m going to sell to recently, meaning what market group. I could sell wholesale B2B (business to business) or retail B2C (business to consumer). There are pros and cons to both. 

My boss exclusively sells wholesale. He has many different stores that buy his birdhouses, and he ships them to the various stores. I asked him why he doesn’t sell any retail and he told me that he didn’t want to package a single birdhouse for some lady in Utah. He wants to sell larger quantities to stores. 

That’s understandable and I can get behind that, but I just don’t know if I could afford to say no to any business. I need as much business of any kind as I can get. If I sold retail, I would be able to charge significantly more than if I sold wholesale. 

Here is a pros and cons list I made in deciding:

Wholesale: 

Pros  

• I could sell larger quantities. 
• Takes pressure off me to actually sell them to consumers since the stores I sell to would be doing that. 
• I would have repeat customers. If a store buys from me and the clocks sell, they’ll come back and buy more. I don’t have to spend as much time and money getting new business because they’ll come back to me. 

Cons 

• My profit margins will be smaller than if I sold retail. 
• What happens if a store places an order for 50? I’m not set up for that. 

Retail: 

Pros 

• My profit margins will be much much higher.
• Shipping would be much easier and probably cheaper than wholesale starting out because I need smaller and fewer boxes. 
• Word of mouth marketing would be greater if I sold retail. If someone buys a clock from a store I sell to, they’re going to talk about what store they bought it from. Not me or my website. 

Cons 

• So what if I make bigger profit margins if I don’t have any orders coming in? 
• I don’t have the money to market to consumers.

There’s an argument to be made for both. My girlfriend had a really good idea though which was to do both. Create a website that has a retail tab and a wholesale tab. If an individual customer wants to buy a clock why stop them? Direct them to the Retail tab. 

For businesses, direct them to the wholesale tab with different prices and a minimum of 5 clocks that you must purchase. I think that is the best of both worlds. I’m very excited to begin building this sometime in the future.