Being a Wholesaler
While some Fair Trade companies are able to do both retailing and wholesaling, it is actually hard to start that way. Usually you will want to choose whether to do wholesale or retail, and there are fundamental benefits and challenges of being one or the other.
As a wholesaler, your client-base changes drastically from retailers. While many wholesalers also do retail, this is not the “meat” of their business. Wholesalers have to source the fair trade products that retailers then make available to the public. They work directly with artisan or farmer groups, or buy from other fair trade wholesalers. It is very common for the wholesaler to invest in building a relationship with the artisans, and take on expenses of traveling, communication, education, technical assistance, etc.
If you decide to become a wholesaler, you will not interact with too many end-consumers. You will, however, have to take on the responsibility of educating retailers about the benefits of carrying Fair Trade products. You must also help them sell these products by providing information on the artisans, pictures, compelling posters, special tags, etc.
Who do you buy from?
As a wholesaler, your best bet is to buy directly from producers or farmers. Moreover, you must make an effort to build a responsible relationship with the artisans or farmers. You will be expected to help them achieve sustainable development, pay them a fair price for their work, help them design marketable products, and help them rise above poverty. Need help finding producer groups? The Fair Trade Federation and the World Fair Trade Organization can help you find artisan groups. TransFair USA can help you find farmers.
You also have the choice to buy from other wholesalers who have sustainable business practices. When looking for wholesalers to do business with, a good way of knowing if they are an ethical company is to see if they belong to the Fair Trade Federation, are certified by TransFair USA, or have other ways to prove their commitment to Fair Trade. It is a good idea to expand beyond the producer groups you already work with by doing business with wholesalers that deal with different products from different parts of the world.
You will sell to different retailers and potentially some wholesalers. The first and more obvious retailer you will sell to are Fair Trade stores. Many of these are independently owned, and are scattered all over North America. One might think that you will find most of these stores in the North East and the West Coast, but in reality every State or Province in North America has numerous Fair Trade retailers making a difference.
Apart from Fair Trade stores, you can be successful at selling Fair Trade products to museum and zoo gift shops. This is because many of the people that visit museums and zoos are conscious, educated and well-traveled people. This increased the chance of them being motivated to purchase a sustainable product. Sometimes the museum or zoo will manage its own gift show. However, other times a company that owns numerous gift shops will manage it. The hardest part is finding who is in charge of buying, but once that is over you can educate the buyer about sustainable products.
Another group of stores that can sell Fair Trade products are the general gift shops and world shops. They tend to go for unique products, and offering something that is handmade, fair trade and functional is very attractive to them. You might need to put a little more effort into educating them about fair trade and its benefits, but they are loyal customers.
Coops and “green” businesses will also tend to buy fair trade. This is because fair trade aligns with their mentality of offering products that are healthy for the people and the planet. You can also be successful at selling to non-profit organizations, since they are value-drive organizations and will understand the importance of doing good in this world.
Finally, Fair Trade has reached enough popularity where you can introduce it to mainstream markets. Large book sellers, home decor stores and gift corporations, among other companies, are trying to improve their image. “Fair Trade”, “green” and “organic” may be buzzwords, but that is only because large companies are trying to stay competitive and change their business practices to be more ethical. They just need a little bit of help, and as a wholesaler you can introduce them to the world of Fair Trade. A compromise must be reached, when working with large corporations, where they will need to be flexible enough to work with fair trade companies, and the fair trade wholesaler has to have respect and patience to work with a company that deals in the “global free economy”.
Wholesalers have numerous challenges. The first that you will encounter will be trying to keep a steady supply of products. Many of the farmers or producers you will work with will have to overcome challenges of their own, which can lead to products arriving late, defective or not at all. You will need to work closely with the producer/farmer to help them overcome their hardships, and helping them become efficient (all while maintaining a safe working environment and all the other benefits of Fair Trade). The producer or farmer will, however, try to understand you, since the partnership goes both ways. In the end, when you get enough experience, this process becomes smoother and you are able to keep a good supply of your products so you don’t let retailers down.
Another challenge is trying to educate your customers (the retailers) about Fair Trade. They must understand why sometimes products are more expensive, why they will benefit from having a responsible image, and why they must understand that sometimes there will be hiccups in the shipping process (because of the inventory challenges). You will have to have a website with detailed information about your practices, fair trade in general and your artisans. You can also convey this information with posters, special tags on your products, and other marketing materials.
At the same time, you need to help your customers sell the products. By providing posters you can help the retailers educate their customers, add legitimacy to the product, and create an overall image of ethical products. You can also provide your customers with pictures of artisans so they can put on their website or catalog.
You will also sometimes go through rough stages when working with your partner artisans. They need help to understand the fashion trends of North America (if they are making crafts), or the quality expectations for produce and crafts, among other key issues surrounding the products. When it comes to helping them become efficient, or helping them create more marketable products, they will sometimes feel uneasy. This is because they feel like you are changing their cultural heritage or messing with artisanal farming methods. This is more of a communication issue, as well as a cultural shock, that you will have to resolve through dialogue. Your artisans and your business depend on creating products that will sell, and your artisans or farmers will have to modify some of their working methods, and you will have to let them keep some of their traditions, in order to work well. This will be something that will go back and forth, bur Fair Trade creates a platform where both parties respect each other and listen to each other.
The last challenge we will talk about here is financing. Many fair trade businesses are self-financed. Nevertheless, there are options. This is better explained in this Fair Trade Federation Financing Page.