The Cost of Not Focusing on Reorders in Your Wholesale Strategy

Most brands selling through wholesale channels spend a lot of time chasing new retail accounts. And it makes sense, new customers mean more reach, more visibility, and more revenue… right?

Not exactly.

While opening new wholesale accounts is essential, failing to focus on retention, and more specifically, repeat orders can quietly erode your profitability, operational efficiency, and brand equity. In fact, one-and-done retailers are one of the most expensive problems in wholesale.

In this post, we’ll break down the hidden costs of not prioritizing reorders and what your brand can do about it.

Higher Cost of Customer Acquisition

It’s well known in direct-to-consumer sales: acquiring a new customer is at least 5x more than retaining an existing one. And guess what? The same holds true in wholesale.

Think about all of the travel, trade shows, sales rep commissions, and subscription software for outreach tools. These all have significant costs associated with them and these costs add up quickly. If a retailer places one order and disappears, all those acquisition costs produce negative ROI.

So what should you do about this? Measure your Customer Acquisition Cost (CAC) against your Customer Lifetime Value (CLTV). If you're not generating reorders, your CLTV stays dangerously low. Be vigilant about tracking all of your costs and what channels your customers are coming from so you can determine what channels are the most fruitful. 

Unpredictable Revenue and Cash Flow

Without consistent reorders, your sales graph becomes a rollercoaster of spikes and dips. Without consistency, it becomes hard to forecast demand, set production schedules, and manage cash flow. Even a 5% fluctuation in retail ordering can result in a 30% variability to your production schedules and raw materials purchasing.

This means that you could end up either overproducing (and discounting inventory down the line) or underproducing (and missing out on sales). Either scenario is not ideal and not a way to build a successful business.

Consistent reorders help create recurring revenue, giving your business the stability to scale in a safe and meaningful way. 

Operational Inefficiency

Brands that constantly onboard new retailers face a number of challenges, including: 

• Spending more time spent on customer support

• More back-and-forth on payment terms, onboarding, and education

• An increase in error rates in first-time orders

All of these have a cost associated with them and create an experience that introduces friction in the buying process. And up to 50% of retailers still depend on non-integrated methods like email and Excel for onboarding, leading to inefficiencies and increased risk of errors.

In contrast, reorders from existing customers tend to be: 

• Easier to process

• Less prone to mistakes

• Less demanding on your internal team

This translates to repeat customers making your operations leaner, your team more productive and your company more profitable. 

Missed Upsell and Cross-Sell Opportunities

Retailers who already stock your products:

• Know your brand 

• Have customer feedback and validation 

• Are more open to trying new items

This means that if you’re not nurturing those relationships, you’re going to miss out on selling them additional products when you launch more SKU’s, upselling them on similar, higher-margin products and collecting feedback from them to improve your offerings. There’s arguably nothing more important than customer feedback and if you aren’t able to develop and nurture relationships, you aren’t in a position to get real insight from customers.

A strong reorder strategy not only keeps you in the loop and top of mind when your customers are ready to expand, but it gives you a direct line of communication to a “warm” set of retailers. 

Damage to Brand Perception

If your products are only ever ordered once by a retailer, it raises a number of questions that could cast a doubt on your product. These questions include: 

• Did the product not sell?

• Was the ordering process too painful?

• Were they not making enough money to continue doing business with your brand?

Over time, low reorder rates signal poor product-market fit, even if that's not the case. Other retailers might notice and hesitate to carry your brand.

Lost Shelf Space and Visibility

Retailers have limited space. So if your products don’t move and fail to get reordered, they’ll be replaced by something that does. And with more brands competing for shelf-space than ever, it’s more important to nurture your relationships with the goal of getting reorders, fast. In fact, in the past 5 years, retailers cut unique products by nearly 9%.

When a retailer reorders your product, it’s a positive sign that your products are: 

• Selling through

• Resonating with customers

• Worth a permanent spot on the shelf

Without this validation, you’re constantly at risk of being cycled out by the retailer. 

Incomplete Sales Data

Aside from the fact that a reorder puts money in your pocket, a reorder also gives you insight into: 

• Which SKUs are selling the best and worth building your brand around 

• Which customers are brand champions and should be treated as “VIP’s” 

• If your product messaging and packaging is working the way that you intended it to

Without reorders, your brand's data is incomplete and misleading. You can't optimize effectively without understanding repeat purchasing patterns.

So, What Should You Do?

To fix the “one-and-done” problem and encourage more reorders, try these proven strategies:

• Automated reorder reminders based on inventory turnover cycles or previous order history (this is something that Vanik specializes in)

• Set minimum order incentives (e.g., free shipping or early access for larger reorders)
  Dedicated wholesale portals that make it easy to browse and order

• Craft onboarding playbooks that set retailers up for success from day one; this could include best practices, educational guides on your product and customer testimonials from your VIP customers that provide selling tips to new customers.

Reorders Are the Backbone of Wholesale Success

Initial orders get you in the door, but repeat orders keep the lights on. If you’re not proactively focusing on reorders, you’re leaving serious money, and opportunity squarely on the table.

By investing in long-term retailer relationships and making the reorder process seamless, you’ll not only increase your profitability but also build a brand that retailers trust and love to work with.

Vanik is built to help brands selling through wholesale channels automate and streamline their reorder reminders.. We send appropriately timed notifications to your retailers based on their previous order history and allow them to place an order in as few as two clicks. If you’d like to learn more, set-up time with us here.