Welcome to the first installment of our three-part guide to Understanding Wholesale on Shopify! In this series we’ll cover the various methods and best practices through which one can implement wholesale into their Shopify Store. Follow along as we detail the pros and cons of each solution, and help you discover which will best suit your needs!
The 3 Facets of Wholesale Management
When thinking of wholesale in terms of Shopify, we look at 3 key facets of management: Pricing, Content, and Inventory. In order to run a complete wholesale operation one needs a solution for managing each. Your needs across these areas will largely determine the options you have for running a wholesale business on Shopify. Below is a basic overview of each facet, but don’t worry, we’ll expand upon them across each part of this guide.
Pricing management is the process of ensuring that your wholesale customers see the proper pricing for your products. Wholesale pricing can be structured on various criteria, including: flat discounts, product specific discounts, volume discounts, minimum quantities, or minimum order amount.
Content management is the process of showing the right collections and products to your wholesale customers, while hiding those products and their prices from retail customers.
Inventory management is the last facet, and its necessary for ensuring that your stock quantities stay in sync regardless of the price at which the items were sold. Due to some of the complexities behind pricing and content management, inventory management can quickly become the most vital, and unfortunately, troublesome part of running a wholesale business on Shopify.
Wholesale on Shopify Out-of-the-Box
Wholesale isn’t a feature explicitly touted by Shopify, and rightfully so, as it isn’t exactly supported “out-of-the-box.” Thankfully, with a bit of ingenuity and some clever massaging of Shopify’s stock features, you can bootstrap a basic wholesale operation on Shopify. It won’t be feature complete by any measure, and truth be told, this solution takes liberties with some of the intended uses of Shopify’s features. We wouldn’t go so far as to call it a hack, but we’re admittedly walking a fine line!
Managing your pricing with Shopify out-of-the-box can be done in one of two ways: discount codes or order drafts. The former is a more hands-off approach, while the latter is a fully manual process. Whichever approach you may take, there’s a lot of micro-management needed to keep things running smoothly.
Shopify comes with a widely used feature called discount codes. You likely already use them in your store for promotions and sales, but with some finessing they can be utilized for whole pricing management as well. Shopify discount codes can be configured to give discounts by a flat dollar amount or a percentage. Within those they can be set to apply to a specific product, specific collection, minimum order amount, or customers belonging to a particular group.
If we take the methods for pricing management that we mentioned previously, we can map some of them to the various discount code criteria available:
- Flat Discounts —> Set by $ or % Amount, off all orders
- Product Specific Discounts —> Set by $ or % Amount, off specific products/collections
- Minimum Order Amount —> Set by $ or & Amount, off orders over specified dollar amount
That leaves volume discounts and minimum quantities off the table if you’re hoping to use discount codes to manage pricing in your Shopify store. The limitations of the discount code system reveal themselves when you realize that only a single rule can be set per discount code. It’s not hard to imagine a scenario where you’ll be left managing hundreds of discounts to cater to the various needs of your e-commerce business and its customers. The situation becomes more problematic when you consider the fact that only a single discount code can be applied to any given order. This means your customers could be forced to place multiple orders, with different discount codes for each. That is less than elegant at best, and downright customer-hostile at worst.
Shopify comes with the ability for you, the store owner, to manually create orders. These are called ‘drafts’ and are essentially pre-filled carts or invoices created for your customer. Draft orders are given discreet links which can then be sent to your customers email, allowing them to complete the checkout process as usual. Alternatively, you can manually process the fulfillment and payment separately, which is useful if you work on a ‘net 30’ basis or other such payment plans.
A benefit to using drafts comes from the ability to fully customize the pricing and details of a given order. You can set specific rates for products, collections, customers, shipping, and taxes, in addition to having full control over volume discounts and minimum order amounts. That means that drafts can fully solve the problem of pricing management, but not without its own share of shortcomings.
Since creating a draft is something only available to you and your employees, you’ll be left manually creating each and every wholesale order. This eliminates the ability for your customers to service themselves and shop of their own volition. Requiring yourself or your staff to hand-pick these orders also makes this solution impossible to scale efficiently, making it a less than ideal solution to wholesale pricing management.
If you sell to both retail and wholesale customers then managing content with Shopify out-of-the-box is all but impossible. The only option one has is to exclude your wholesale products from customer-facing collections. This leaves your wholesale customers without the convenience of browsing your shop and its collections, which means having to memorize the exact URLs to the products they seek. Even if you take this approach, your products could still be found in searches made within your shop, or even Google, exposing your wholesale discounts to retail shoppers.
An alternative solution would be running a second wholesale-only Shopify store, which leads to the aforementioned search issue. You’d also have to use a Shopify app to password-protect the shop to ensure retail customers don’t access your products. Either of these methods means you’ll be left duplicating each and every product, one for your retail customers and another for wholesale, which leads us to problems with inventory management.
Inventory management on Shopify out-of-the-box has improved over time, and it’s perfectly suitable when you sell through a single channel, with a single set of products. It actually wouldn’t be a bad way of managing wholesale, given that your pricing management needs aren’t too complex and varied on a customer basis. Unfortunately, few wholesale businesses likely fit that bill, and so we’re left having to accept that Shopify simply doesn’t offer any suitable options for wholesale inventory management.
This may all sound like doom & gloom, but all hope isn’t lost! In part 2 of Wholesale on Shopify, we’ll dive into the world of Shopify Apps, where problems with pricing, content, and inventory management are met with far better solutions.