How to Become a Wholesale Distributor in 2025

Wholesale distribution is a lucrative business opportunity in a rapidly growing market worth $7.7 trillion—more than double the size of direct-to-consumer (DTC) commerce. Instead of selling directly to the end consumer, you can sell products to other retailers in bulk, and with 80% of all B2B sales projected to happen online by 2025, there's never been a better time to enter this market.

But before choosing a wholesale ecommerce business model, there are lots of things to consider. Who will be selling your products? Can you handle the volume? What will your margins look like? These questions can be overwhelming, especially for younger businesses.

This guide shares how to become a wholesale distributor in eight steps, alongside tips on how to make your business-to-business (B2B) operations run smoothly. <div id="toc" class="marketing-block marketing-block--light marketing-block--padded">

Table of contents

• What is a wholesale distributor?
• How to become a distributor in 10 steps
• Five tips for wholesale distributors
• Factors to consider when becoming a distributor
• Benefits of becoming a distributor
• How to become a wholesale distributor FAQ

What is a wholesale distributor?

A wholesale distributor is a business that creates its own products or buys products from a manufacturer. The distributor acts as the intermediary and resells products to other retailers in bulk and at a lower cost than the recommended retail price (RRP).

How to become a distributor in 10 steps

1. Do market research.
2. Choose a product to sell.
3. Research suppliers.
4. Contact suppliers.
5. Understand distribution policies and requirements.
6. Obtain the necessary licenses.
7. Determine wholesale prices.
8. Build an online wholesale store.
9. Market your distribution business.
10. Provide excellent customer service.

1. Do market research

Much like any business model, a successful wholesale distribution company has a business plan that outlines its target market.

As part of your market research, figure out whether you could handle sourcing products to a large retailer like a department store, or whether you’re looking for more boutique sellers with small businesses. 

Larger retailers often have strict rules around product sales—and who takes the hit if there are losses. This can make working with chain stores and department stores difficult and expensive. 

If you’re just starting out as a wholesale distributor, partnering with smaller retailers may be a better choice. You can learn as you go with less risk than by jumping right in with a large seller.

Similarly, consider which kind of retail stores fit your product best. Would it do best in a more general store, or do you sell a very niche item that would do better in a more specialized store? You need to consider this when reaching out to retailers—and when you brand your wholesale offerings to ensure you’re reaching the right stores.

2. Choose a product to sell

Are your products something other retailers would be interested in selling to their customer base—something they could work into their existing product selections? Is your product line cohesive enough to attract retailers? These are questions you should be asking yourself when considering wholesale distribution. 

Once you’ve chosen your wholesale products, consider what makes them stand out and use that information in your sales pitch when talking to retailers or listing your products on a wholesale marketplace. 

The benefits of your products should be clearly listed on your site and a focus of your sales. Perhaps you use a particular method to make your product, or maybe you source all the materials locally—or somewhere unique and exotic. These are all details that you should tell retailers in your pitch. Let them know what makes your products worth investing in. 

3. Research suppliers

Before getting into wholesale distribution, you'll need reliable suppliers who consistently deliver quality products at competitive prices. Take time to thoroughly research potential manufacturers and suppliers—your business's success depends on them.

Start by looking at their track record in the industry. How long have they been operating? What do other distributors say about working with them? A supplier's reputation can tell you a lot about what to expect in terms of product quality, delivery times, and problem resolution.

Examine their pricing structure and minimum order requirements. Some suppliers might offer great prices but require large minimum orders that could strain your cash flow when you're just starting out. Others might have more flexible terms that work better for new distributors.

It's also worth considering whether your suppliers offer any additional support. Some might provide marketing materials, product training, or even help with storing and shipping products. These extra services can be valuable, especially when you're building relationships with retailers.

4. Contact suppliers

After identifying potential suppliers, it's time to reach out and start building professional relationships.

Prepare a clear introduction about your distribution business before making contact. Include important details like your business model, target market, and the territories you plan to cover. Suppliers want to know that you have a solid plan for selling their products and reaching the right customers.

When you reach out, be specific about what you're looking for: 

• How many units would you potentially order? 
• Which product lines interest you? 
• What kind of support do you need? 

Having these details ready shows suppliers you've done your homework and aren't just making casual inquiries.

Make sure to discuss their onboarding process for new distributors. Many suppliers have specific requirements—like providing your business license, tax documents, or proof of insurance.

5. Understand distribution policies and requirements

You’ll not only need to consider volume, but also any rules or requirements that the retailer has for their wholesale suppliers. 

Pay close attention to their distribution terms and agreements: 

• What are their payment terms? 
• How do they handle shipping and logistics? 
• What's their policy on returns or damaged goods? 

These details can significantly impact your profit margins and operations. Make sure you're comfortable with all aspects of their terms before signing any agreements.

If possible, try to schedule video calls or in-person meetings with potential suppliers. Face-to-face interactions, even virtual ones, can help build strong relationships and give you a better sense of how well you might work together.

6. Obtain the necessary licenses 

Wholesale product distributors need a specialized business license to resell goods to other merchants. A reseller license, which costs $6,500 on average, proves you’re a credible distributor who sells legitimate products. 

You’ll need this type of license in every state where your wholesale business operates. If you’re based in California but serve wholesale customers in Tennessee, for example, you’ll need a reseller’s permit in both states. 

To apply for a wholesale license, find the online application form—usually from your state’s tax or revenue office. You’ll need your employer identification number (EIN) and your business’s sales tax ID. Most applications are approved within a few weeks. 

7. Determine wholesale prices

Wholesale pricing can be a big challenge that confuses many new distributors. As a distributor, you sell quality products at cheaper prices than RRP—but there still needs to be some profit left in the pot to make it a worthwhile business. 

Consider if your margins are good enough to offer a proper discount to someone who purchases wholesale. Retailers want to make money from your products as well, so a 10% discount won’t be enough for them to buy your products. On the other side, you also need to make sure you aren’t undercharging. You don’t want to lose money on your wholesale orders, otherwise the business won’t be sustainable.

Set minimum order quantities for buyers. Consider what businesses you’re targeting and what quantities they would likely want to order. If you serve several types of retailer, you could offer tiered pricing for different company sizes and order volumes. 

Ashland Conveyor, for example, has a different price per unit depending on how many units a retailer buys. Smaller quantities are the most expensive per unit, which incentivizes potential customers to buy more.

Remember: Businesses that buy wholesale usually pay a few weeks after receiving their products, since this gives them enough time to increase sales and pay for the inventory. When establishing a wholesale distribution business, decide how long you’re willing to wait for payment. Net 30 and net 60—as in, 30 or 60 days from the time an invoice is sent to the time payment is required—are the most common payment terms for distributors.

8. Build an online wholesale store

The traditional way to sell wholesale products used to be very complex and manual. Now, merchants on the Shopify Plus plan can sell wholesale from the same ecommerce platform that powers their online storefront—giving B2B the DTC experience. 

The B2B ecommerce platform allows you to:

• Create customer profiles for B2B buyers
• Hide wholesale pricing behind account logins 
• Set minimum order quantities (MOQs) for wholesale products 
• Assign payment terms for B2B orders
• Manage tax exemptions, currencies, and localized wholesale storefronts 

Advertise wholesale distribution on your DTC website and tell potential retailers to reach out to you if they are interested. Brooklinen, for example, has this landing page to describe the benefits of buying their wholesale products, complete with an application form to become a wholesale customer. 

“It’s been great to have the B2B functionality in the Shopify admin, so we can use the functionality we’re familiar with to spin up our B2B site,” says Elizabeth Bell, director of product management at Brooklinen. “We can have a site that looks and feels very similar to our DTC site but have it be focused on business to business.”

The photos you use on your DTC website might not work for B2B. Usually, you’ll want a more plain image on a white background, showing the product exactly the way it will look without anything else in the way.

You can also have pictures showing your products in flat lays or on a model, but an image of the product alone works best as the item’s main image. 

Maddox Industrial Transformer, for example, shows a photo of their transformer as the main image. Supporting images and videos show different angles of the transformer and how it might be used in a warehouse. 

9. Market your distribution business

Getting your wholesale distribution business in front of the right retailers is key to growth. You need a strong marketing strategy that showcases your products and demonstrates why retailers should choose you as their distributor.

Alongside your website, consider creating detailed product catalogs that retailers can download. Include high-quality product images, detailed descriptions, and wholesale pricing information. Many retailers will want to see this information before they even contact you.

Some other strategies to test are: 

• Partner with complementary businesses: Team up with businesses that sell products that work well with yours but aren't direct competitors. For example, if you distribute kitchen appliances, partner with cookware distributors to share leads and cross-promote each other's products.
• Develop a referral program: Create incentives for your existing retail customers to refer other businesses to you. This could be through discount codes, priority shipping, or special pricing tiers.
• Run email marketing campaigns: Regular email newsletters keep your retail customers informed about new products, special deals, and industry insights. Segment your email list based on customer size and purchasing patterns to send relevant, targeted content.
• Invest in SEO and content marketing. Optimize your wholesale website for search engines by creating content that answers common questions in your industry. 

Getting that first order from a new retailer often requires some extra motivation. Create special offers for first-time buyers, such as:

• Free shipping on their first order
• Lower MOQs for initial purchases
• Sample packs at reduced prices
• Extended payment terms for qualified buyers

10. Provide excellent customer service 

Set up multiple ways for retailers to reach you—such as through email, phone, or a dedicated support portal. Be clear about your business hours and response times, and consider offering priority support for your larger accounts.

If you have a team handling customer service, make sure they understand both your products and the retail business. They should be able to answer questions about minimum orders, shipping times, and product specifications without escalating every inquiry.

While it's important to have standard policies for returns, exchanges, and damage claims, remember that wholesale relationships are built on trust and understanding. Sometimes, being flexible with a valued retail partner can lead to stronger, more profitable long-term relationships.

Five tips for wholesale distributors

Once your wholesale distribution business is up and running, here are five tips to grow it. 

Build a team that can handle volume

Packaging and shipping large orders can be quite the undertaking—and you need to be prepared for it. 

If you’re currently the person who does all the packaging, consider hiring a fulfillment team as your wholesale distribution business grows. You could hire someone to help you package and ship orders. or outsource the entire process to an ecommerce fulfillment service. 

Here are some questions to help you decide whether you need extra help:

• Do you only produce in small quantities? 
• Could you increase production if needed? 
• Do you have the warehouse space to hold increased quantities until they sell? 
• How will you distribute large orders? 

Warehousing is also something to consider as you scale your wholesale distribution business—as you take on more retailers, you’ll need more products and more warehouse space. A third-party logistics (3PL) provider can offer more space when you need it.

Dropshipping is when a retailer sells your products without holding inventory, and you ship them out directly to the end customer. You might offer the retailer a smaller discount in these cases, since you’re handling the logistics, but you may consider offering dropshipping if you feel you can handle the orders. 

Establish relationships with suppliers and retailers 

Once you’ve made the first sale to a new wholesale customer, your work doesn’t stop there. Distributors have a lot more direct contact with the buyer and more follow-ups than with a DTC business.

Follow up with retail businesses to see whether they liked the products, how their customers responded to them, and whether there’s anything else that the customer needs. You could also show them any new products you’ll be offering to get them excited.

It’s much easier to generate sales from existing customers than from new ones. Plus, retailers who have already made an order are also more likely to place large orders. They already trust you and your products—and in most cases, will have gotten positive feedback about them from their own customers. 

Provide self-service options 

Gone are the days of taking orders by phone and email only. Some 83% of B2B buyers now prefer to self-serve their orders online, and wholesalers can triple order frequency by offering this option. 

Set up an online ordering portal so retailers can browse your catalog, place orders, and manage their accounts 24/7 without requiring your help. This is easy with a B2B ecommerce platform like Shopify. 

Join a wholesale marketplace

As a wholesale distributor, you don’t have to put all of your eggs in one basket. Much like DTC business owners who might sell through multiple sales channels (like their online store, Facebook, and Instagram Shops), you can drum up new business by listing your products on wholesale marketplaces or attending trade shows.

A wholesale marketplace is an online platform where buyers purchase wholesale items. Popular directories include:

• Faire
• Worldwide Brands
• Alibaba

The downside to wholesale marketplaces is that they take a cut of all sales. To save profits, most distributors use wholesale marketplaces to reach new customers, then convince retailers to place ongoing orders through their own wholesale website.

Create an omnichannel experience

Buyers expect a seamless and intuitive experience when engaging your distributor business. To meet their expectations, unify your sales channels under a single commerce platform. 

Routing inventory, pricing, and customer data into one source of truth will help create better buying experiences. Buyers can place orders and manage their accounts anywhere, whether it’s on your website, at a trade show, or talking directly with a sales representative. 

This unified commerce approach creates a consistent brand experience across all touchpoints. It also allows distributors to be more agile and respond to buyers' needs, improving customer satisfaction and operational efficiency. 

Factors to consider when becoming a distributor

Industry knowledge

Ideally, you should know your industry inside and out. 

Stay on top of market trends, know which products are becoming popular, and know what your competitors offer. Industry knowledge will help you make smarter decisions on what products to stock and how to price them.

Sales skills

You may have great products to distribute, but you’ll need to know how to sell them effectively. Communicate your product value clearly on your website and in promotional materials, and learn to negotiate deals that work for both parties.

Wholesale selling is different from direct-to-consumer sales, as you're dealing with retailers who need to be convinced of both product quality and profit potential.

Logistics 

Your success as a distributor depends on your ability to get products where they need to be, when they need to be there. You may need to invest in warehouse management software or even build partnerships with 3PL providers or shipping companies. 

Consider hiring a logistics expert to help with your fulfillment strategy.

Financial stability 

A distribution business does require a big upfront investment and ongoing capital. 

Initial investment can range from $50,000 to $500,000, depending on the size of your operation. You'll need enough money to purchase inventory in bulk, maintain warehouse space, and cover operating expenses before you start seeing regular income from retail customers.

Work with a financial advisor to create realistic projections and guarantee you have enough cushion to weather the early stages of business growth.

Benefits of becoming a wholesale distributor

If you’re thinking about starting this type of business, here are the biggest advantages of becoming a wholesale distributor:

• Increases your reach: DTC brands have the pressure of finding customers—but when you offer wholesale distribution, retailers can do the hard work for you. It’s their job to promote, market, and sell your products in their stores. 
• Less pressure on customer acquisition: Instead of finding end consumers who might only buy your products once, wholesale customers tend to make repeat bulk orders. You’ll need much fewer customers to make a profitable business out of wholesale distribution. 
• Simplified order fulfillment: Because wholesale customers buy products in bulk, fewer orders leave your warehouse. This makes the logistics process easier than DTC. 

Wholesale distribution challenges

Running a successful wholesale business does have its advantages, but there are some downsides to consider when evaluating this model:

• Shipping can be expensive: Retailers buy wholesale products in bulk, and it’s harder (and expensive) to pick, pack, and ship large orders. 
• Limited control over product display and marketing: Retail distributors can choose how they present wholesale products to their own customers. Keep your brand image consistent by setting a minimum suggested retail price (MSRP) and providing marketing materials such as social media posts and retail signage.
• Lower product margins: Wholesale distributors sell products at a lower price than RRP, leaving small profit margins—between 30% and 50%, on average. Make your wholesale distribution channel more profitable by setting minimum order quantities.

Become a successful distributor with Shopify

The decision to break into wholesale can be incredibly daunting for a business. But it’s a business model worth considering if you want to expand awareness of your own product or focus on lower-quantity, higher-quality orders. 

Follow the steps above to start wholesaling and find your first few customers. From configuring wholesale prices to setting minimum order quantities, you can do it all with B2B on Shopify.