After four years of hand-driving its wholesale business, luxury bedding and home furnishings DTC retailer Brooklyn is launching a wholesale website on Shopify.
“The beauty of this is that we’ve been very active in the past,” said Nicholas Lukacs, director of emerging channels in Brooklyn. “It was a very responsive model. Someone comes to the website, sends a message to the app saying they have a hotel, back and forth conversations, and we fulfill this order. The more active we expect to be. I think the mindset we’re moving into is to be more proactive in finding these customers,” Lukacs added.
In turn, more and more DTC brands are turning to mass channels for their next level of growth. Brooklyn joins a growing list of brands, including Dermalogica and Kulani Kunis, who conduct their wholesale business through Shopify’s B-to-B.EditionsThe event took place last summer in 2022. Separately, wholesale marketplace Faire saw a 45 percent increase in the number of merchants using its platform last year. Some of its recent product partners include womenswear brand YMI Jeans, beauty and wellness supplier Skinny Confidential and candy maker Sugarfina. Meanwhile, retailers are launching new B-to-B tools. Walmart launched Walmart business In January, to help small to medium-sized businesses and nonprofits “make business purchases at Walmart faster, easier and more cost-effective.”
While wholesale is not a new idea, companies like Shopify and Faire are trying to make the process more digital. In particular, they are looking to offer brands such as Brooklyn, who have started DTC, with limited resources and especially where they want to sell their products wholesale.
Over the past four years, Brooklyn said it has tried to expand this business stream, particularly with hospitality clients in the B-to-B market, such as boutique hotels such as the Woodstock Way Hotel in Woodstock, Gather Green in Coxsackie and Kinship Landing in Colorado Springs. But Lukacs said it’s a more complicated process because customers don’t have an easy way to buy Brooklyn products or find B-to-B discount and wholesale price lists.
“The gap is always coming in front of them. [wholesale customers]” said Lukacs. And he added, “There are only so many hands we can handle in a day.” Through Shopify, he added, “customers can browse products to add to cart, make transactions as frequently or infrequently as they want, in a way that doesn’t depend on the team.” In turn, Brooklyn expects to grow its wholesale business by 50% compared to last year.
B-to-B marketplace sales will increase 131 percent to $56.5 billion by 2021. Data from DigitalCommerce360 showed.. And they are expected to grow at a comparable pace, reaching $130 billion by 2022, the report added. “Our market research shows the global [B-to-B] And the size of the wholesale market is more than double. [DTC]That means billions in unearned revenue,” Shopify product director Manny Fazeli wrote in an emailed response. Shopify claims to have seen a 300% increase in B-to-B wholesale website marketing revenue and a 60% year-over-year increase in B-to-B wholesale revenue.
“The biggest thing is really just the dollar value potential of this business. When you think about DTC, there are a lot of customers, but the wallet size is small,” Lukacs said. When you think about the B-to-B market, the project size is huge.
According to Earnest Sweat, a venture partner at GreraPoint Ventures, interest among many startups in going wholesale began about five years ago, when conversion metrics for DTC startups began to hit a ceiling combined with rising ad spend. “It got people thinking, we need to do a better job of finding new ways to reach customers,” he said. Lab has previously invested in companies such as Flex and Aerospace Technologies.
Traditionally, brands were forced to use PDF catalogs, spreadsheets and emails for bulk sales, which was inefficient and tedious. Shopify’s enhanced wholesale channel ‘B2B on Shopify’ allows Shopify Plus merchants to sell to other businesses on the same platform they use for their consumer businesses.
“It has become an online-first measure of modern business,” Fazelli wrote. “Merchants are looking to take their brand-forward D2C approach that works for consumers and apply it to their B2B operations by creating seamless shopping experiences.”
Brooklyn’s exposure to mass, Lukacs said, was customer-driven. “We had clients and they had Northern Hotels and they said, we like your bed, we want to buy it… This was four or five years ago. At that point, we were like, wait, maybe there’s a market for hotels, short-term rentals, Airbnb that might want our products, too,” recalls Lukacs.
As Lab sees it, it’s a natural progression for growing brands. I think businesses are smarter – how can we improve profitability? How can we grow?” said Lab. “And if markets like Faire and other marketplaces offer new channels to the community that aren’t exposed to them, why wouldn’t they?
As DTC brands reach maturity, Lukacs says, the smartest DTC brands will transition to omnichannel commerce. “Historically, many of the DTC brands that have come online may not have been successful. Thinking about our future, we think of online as one of our channels, but retail is another important channel. And we consider it. [wholesale] An important channel. I think the smartest DTC brands are starting to think, hey, it’s not just online, how can I be an omnichannel business to get the customer where they are,” he said.
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