6 Ways to Know Your Wholesale Target Market
Wholesale marketing can be complicated. Marketers will often throw big words around and tell you about product conception, value proposition, or market segments and revenue models, and it can all be very overwhelming. So where do you start?
Before you begin investing any time and effort into all of the different marketing strategies for your wholesale product business, start with a simple concept—knowing and understanding your ideal target market.
Wholesale Marketing 101: Know Your Ideal Target Market
Niche markets can work quite well for some vendors, but when dealing in large wholesale situations, the last thing anyone wants is to pick an industry with a small target audience.
Most people don't realize that there are several factors to consider when identifying the perfect target audience. Therefore, the six primary factors to consider are listed below. Once you’ve worked through each of them, you should have a far clearer idea of exactly who you will be reaching so that you can be more effective in your sales and marketing efforts.
The Size of the Total Market
You have to begin by being exact in defining your market. Are you going to go by your trade association’s definition? It may be that definition is too broad or too narrow.
For instance, if you sell electronic learning toys, is your market the entire toy industry, specifically electronic toys, or laterally education products?
Who Is Interested in Your Product?
Within your overall market—as you’ve defined it—what is the market segment who will be specifically interested in your product?
Using the example from the previous point, of all the consumers in the market for electronic learning toys, how many are likely to consider your product? If 10% of the market for electronic learning toys is composed of educational institutions, will they be likely to consider your product or more likely to pass it over in favor of an established line?
The Size of the Market Accessible by Your Distribution Channels
How much of the market will you be able to reach through your chosen method of distribution? If the majority of consumers buy from retail stores, how much of that market could you reach through direct mail? If your competition primarily uses a sales force, how much of the market would you be able to market to via telemarketing?
Who Buys Your Competitors' Products?
After you’ve identified your direct competitors, gauge the size of the market segments they reach. Is it profitable enough to support another company? Should you redefine your market to go after one they’ve overlooked?
Who Does Your Company Serve?
How many customers or much production can your company realistically serve? If you can only supply a few hundred customers in a market of millions of consumers, you’ll need to market accordingly. The only thing worse than not enough demand is too much of it.
Who Can You Reach Through Advertising?
With your given marketing strategy, budget, and personnel, how much of the market will you be able to reach? Is it more than you can supply, or is it insufficient to reach your break-even point? How does the information relate to your current strategy?
You see, there are a number of considerations when truly considering your target market. The truth is the number is influenced by the answers to all of the questions you ask here. However, by carefully examining these six factors when identifying your ideal target market, you’ll be much better prepared for success.