How to Work with Stockists: Advantages and Disadvantages


If you are at the point in your career where your business has hit a steady pace, and you would like to increase your revenue streams, you may consider working with stockists to reach more customers and generate more sales. 

A stockist is a retailer that sells particular goods to their customer base. For example, a spa will likely sell cosmetics such as skincare and makeup products for their clients to purchase after their treatments. Or, a hair salon will offer customers products at the end of their treatment. 

This article will detail how you can work with stockists to generate more profit for your business, paying attention to the advantages and disadvantages you should be mindful of. 

How to Work with Stockists

How to navigate wholesale buyers

Although you may be familiar with the above practices, you may have never put yourself in the thought process of how this comes about. Usually, stockists will reach out to the brands they wish to work with, or vice versa; this is where you come in. 

As the manufacturer and wholesaler, you will need to put various guidelines in place for when potential stockists get in touch with you or if you choose to contact them. This ensures you have a pricing strategy covering your expenditures, further supporting your business's cash flow. Below are a few plans you will need to consider when this interaction occurs; 

Minimum order quantities

An important detail you should include in your initial guidelines is your minimum order quantities. Having this in place ensures that you can make a substantial profit margin and is a huge part of selling wholesale successfully. 

It may sound daunting, but breaking this down for you may make it easier to understand why putting an MOQ in place is so important. First, you will likely already have an existing website or eCommerce business where you are selling your products to customers. More often than not, consumers will only buy one of each product.

When it comes to the wholesale marketplace, this isn't the case. When a stockist sells your products in their workplace, you won't receive the full cut of the retail price. So, this is why a minimum order quantity is essential, as it ensures your stockist will pay enough to cover your overheads, as retail cuts alone may not.

Conducting market research to see what other wholesale businesses have as their MOQs will be helpful for you when deciding what to set yours as. Also, consider the materials and cost of production. For example, suppose you work with expensive materials and have a lengthy production process. In that case, you can aim higher with your minimum order numbers.

How to Work with Stockists

Manufacturer's Suggested Retail Price

As a wholesale business, you will be selling your product in bulk to stockists. Whether you conduct your manufacturing in-house or work with contract manufacturers, you will need to devise a pricing strategy that reflects the quality of your product. 

A retail price refers to your product's cost when it reaches the shelves of your chosen retail stores, which the end customer will pay for. Commonly, this number will be up to three times the amount of the wholesale price, as wholesale prices are usually much lower to strike relationships and deals between stockists and wholesale businesses. 

The retailer should take your suggestion on board, and most stockists do. This will ensure your supply chain is managed efficiently to support a healthy cash flow for your business. 

Advantages and disadvantages 

Now that you have a general idea of the wholesale business and the steps you need to take to reach your retail customers, we will cover the pros and cons of working with stockists. 


First, we will start with the advantages you should be aware of when entering wholesale marketplaces. 

Build brand awareness 

When you think of your favourite brands, chances are that they are stocked in some unique spaces by complementary brands and businesses. These spaces allow new customers to be introduced to the products, which is particularly helpful if you are a small business that relies on word of mouth to grow your business. 

Enter global markets

Selling wholesale with set minimum order quantities allows you to become an established brand on a bigger scale, as many stockists have global markets from other retailers that you can tap into. In addition, when your company sells wholesale, you will be shipping large quantities to different parts of the world. This will result in lower shipping costs than if you were to send multiple individual parcels so that you may have lower overheads. 

Promotion goes hand in hand with stockists

Retailers will have highly trained and knowledgeable employees with excellent communication skills selling your products to ideal customers. They will have revised your unique selling point and know exactly how to get customers in a position where they would like to purchase an item. 

Potential customers can try your products 

Even if it doesn't end in sales, having your products stocked in retailers selling directly to your target market will never be a bad thing. As opposed to your current strategies of relying solely on a social media presence or eCommerce tools, your new customers will be able to try complementary products and samples, ensuring more people are introduced to your brand and what it offers than ever before. 

How to Work with Stockists


The above points may be swaying you towards considering working with stockists. Still, to keep the argument fair and give you a thorough overview, we must share some disadvantages and possible issues you may encounter when making your own business a wholesale channel. 

Increased pressure on product marketing

Although the retailer can promote your product, and it is their responsibility to stay up to date with information on your ingredient list and specifications, the actual marketing assets of your brand and products will still be entirely down to you. And, as your brand will be placed in numerous places, your marketing spending will likely increase. Again, this is because you must ensure your social media, website, and physical products are as up-to-date and professional as possible to guarantee building relationships with clients and retailers. 

Struggles for small businesses regarding warehouse space 

Although stockists buying your stock in bulk has many advantages, it can put a lot of strain on small businesses that don't have the space to house all of this product. As demand increases, you will be pushed into sizing up your facilities to ensure you have a warehouse and inventory system that supports your product demand. 

Less freedom than selling independently 

You will be putting a lot of trust in the stockists you choose to represent and house your brand, and certain freedoms won't be possible with this technique. For example, you may like to do bi-annual sales on your website, but you will need to consult with any retailers and stockists before doing this, as it can affect in-person sales. 

You may make less money by using retailers 

As we mentioned, you won't be taking home the entire sum of the retail sales stockists will make from your product. Of course, you will receive the whole money from bulk orders, but this will be reduced. For example, let's say your minimum order spend is $100, giving the retailer 30 units of a particular product. If a customer was to go to your website, they might spend $100 by only purchasing a few items. 

In turn, this can generate a lot less profit margin. But, different factors will contribute to your end sums, from how successful your stockist is to how many units your stockist purchases from you. 

Final thoughts

To conclude our advantages and disadvantages of working with stockists, it may seem like an even balance between pros and cons. But, we feel that working with a stockist would be an excellent source of income for your business that supports your online website and other income streams by introducing new faces to your brand. 

Frequently Asked Questions 

How do I find stockists?

There are many ways that you can find stockists suitable for your brand, but all roads lead to research! Start by looking into local stockists to dip your feet into the world of wholesale business. Then, showcase your products at trade shows and link with successful stockists on social media to form relationships. 

How do you pitch a product to a retailer?

Once you feel familiar with your target market and have established your brand, you can reach out to retailers through their preferred method, usually a telephone call. It is advised to write your goals down to ensure you include all the details you need about your brand, your aims with the retailer and what you can provide them. 

What is a stockist business?

A stockist business is a dealer that orders supplies of certain products and brands to stock them and sell them through specific retailers to generate profit for them and the brand that owns the products.