As a new business owner, one of the key decisions you’ll face is whether to focus on selling directly to consumers (D2C) or to build relationships with wholesale partners. While direct-to-consumer sales have become a popular choice, wholesale can offer significant advantages, especially when starting out.

Codu, a product-based business founded by Ilya and Marcus, chose to prioritise wholesale early on. Their success highlights how this approach can be an effective alternative—or complement—to direct sales. Here’s what you can learn from their strategy.

Why Codu Opted for Wholesale

When launching Codu, Ilya and Marcus made the decision to focus on wholesale rather than investing heavily in direct-to-consumer marketing. This decision was based on practical considerations: they recognised that their strengths lay in building relationships, not running digital advertising campaigns.

This approach offered several benefits:

1. Access to Existing Customers: Partnering with established retailers allowed Codu to benefit from their footfall and loyal customer base without needing to generate traffic themselves.
2. Lower Marketing Costs: By selling through retailers, Codu avoided the significant expense of running advertising campaigns and maintaining an extensive online presence.
3. Credibility through Partnerships: Stocking their products in well-known shops gave Codu an immediate boost in credibility, helping to establish trust with potential customers.

For new business owners, particularly those with limited resources, wholesale can be an appealing route to market.

The Case for Direct-to-Consumer Sales

Although wholesale was Codu’s initial focus, they’ve recognised the potential of direct-to-consumer sales and are now exploring this channel. D2C has its own advantages:

1. Higher Profit Margins: Selling directly to customers removes the retailer’s cut, allowing businesses to retain more profit per sale.
2. Control Over Branding: Through your own website and marketing channels, you can control how your brand is presented and connect directly with customers.
3. Customer Engagement: Selling directly gives you the chance to build relationships with customers, gather feedback, and create a loyal following.

However, D2C also requires significant investment in marketing, customer service, and infrastructure, which can be challenging for smaller businesses.

Balancing the Two Approaches

For many businesses, a blend of wholesale and D2C works best. To find the right balance for your business, consider the following:

1. Your Strengths: If you’re skilled at networking and pitching to retailers, wholesale might come naturally. If you have experience in digital marketing, D2C could be a better fit.
2. Your Pricing Structure: Wholesale requires sufficient margins to sell at a reduced price and still make a profit. If your product doesn’t allow for this, D2C might be your only option initially.
3. Your Resources: D2C demands time and investment in building and managing a strong online presence. If you’re unable to commit these resources, wholesale may be a more feasible option.

Lessons from Codu’s Experience

Codu’s journey demonstrates the value of playing to your strengths. By prioritising wholesale, they were able to build a sustainable business without relying heavily on costly marketing campaigns. As they expand into D2C, they are doing so with the confidence of an established brand and a solid customer base.

Key Takeaway: There’s no universal answer to the question of how to sell your products. The right approach depends on your skills, your margins, and the resources you have available. Take the time to assess these factors before deciding on your strategy.

Thank You

This post was made possible thanks to the support of Constant Contact. If you’re a small business owner looking for an effective way to manage your email marketing, social media scheduling, and SEO, their platform is an excellent resource to help your business grow.