Leverage Wholesale as a Marketing Tool, Not Your End Game

From the dawn of retailing time, brands have striven to achieve one mammoth goal: to encourage wholesalers to sell their products. Before the internet, the strategy worked wonders. Moving merchandise via Macy's? You were golden. The big-box retailer did all the marketing to loyal patrons, and brands reaped the benefits.

Alas, this wholesale landscape is no longer a feasible reality. As PricewaterhouseCoopers notes, online channels are now outperforming traditional retail by up to 7 percent. Not surprisingly, brick-and-mortar players, like Saks Fifth Avenue, are hurting big time. The retailers’ pain forces them to squeeze profit margins from brands or eschew items that won’t bring foot traffic.

In this changing landscape, wholesalers play the role of landlords, charging for shelf space and tightening margins. Brands that don’t accept this reality will experience a hard landing. However, those that adapt can leverage emerging marketing strategies to scale.

Retail isn’t dead. Rather, its overall importance has shifted, and it’s not the pinnacle of distribution as before. With this evolved climate, a savvy brand must be ready to play the new-age retail game to its advantage.

Balancing Tried-and-True Wholesale With Digital Marketing

The direct-to-consumer route is gaining momentum, quickly usurping the desire to negotiate with retailers for premium space. However, this approach isn't as easy as setting up a website or placing Google ads. Smaller startup brands must build awareness by using the power of viral content. At the same time, they shouldn’t negate all wholesale outlets as impossible.

For instance, every city has a variety of independent retailers selling products to niche customers. Have you mapped out your target personas as part of your business plan? Great, now match up with the independent retailers in your territory. They already appeal to your most likely buyers, and they won’t drain your expenses by forcing you to pay ridiculous fees. Spread your investment dollars throughout specific cities, and allow boutique retailers to introduce your products to consumers.

Does it take legwork to identify, contact and negotiate with multiple independent stores nationally or globally? Absolutely. But the value potential is astronomical compared to spending the bulk of your resources and energy on breaking down the doors of the planet’s largest wholesalers. Smaller retailers open up markets inexpensively and more quickly, placing your brand in an enviable spot if it can convert its exposure into a social following.

Get the Ball Rolling With Independent Retailers

Obviously, your first task is to hunt down the independents selling to people within your particular demographic. Work together to do something special that gives them value while getting your product front and center.

For instance, you might want to develop products that can only be accessed online. Thus, when customers buy something at a niche retailer, they can then go to your website and get additional merchandise. This keeps customers coming back to not only the independent store, but also your web store.

You can also create a special experience by working with a specific retailer to customize a product for the store. When a customer purchases the product from the store, he or she then receives another item for free. The point is to incentivize the retailer to promote your product. While there might not be a ton of money in it for you, you're picking up new customers in markets you can't get to on your own.

By working with more focused wholesale channels, you can control your brand image and spread your marketing dollars across many cities. At the same time, plan to nurture your online appeal as well. That way, you’re not relying solely on retailers or putting all your eggs into the internet basket.

Remember, your brand’s future isn’t going to follow the same path as its ancestors, and that’s OK. Times have changed, and the more energy you spend looking through forward-thinking goggles, the higher your likelihood will be of dominating the market.

Dustin White is the CEO and founder of Made Brand Management and a partner in The Mulholland Group. After spending 20 years building and investing in marketing and advertising businesses, Dustin saw the need for an investment and management company to assist brands in transitioning their strategy to direct-to-consumer.