If you are a micro-retailer or a small manufacturer in this industry, chances are you may have felt overlooked or underestimated at some point simply based on the perceived size of your business. New small businesses are often dismissed, disregarded or viewed skeptically, mainly due to historically high turnover rates for aspiring retail entrepreneurs in adult novelty.
Before online ecommerce platforms like Shopify became available, white-label turnkey sex toy websites were efficient solutions. Many people with little to no experience in adult retail saw big dollar signs and wondered how they could get a piece of the pie. A white-label store was a quick, low-cost option to get up and running fast. Some white-label sites are still cashing in on their early adoption of this model, but many bailed when they realized that achieving ROI required more time and effort than they had anticipated.
After watching new businesses die time and time again, it is not surprising that product suppliers and sales reps focus less time on startups or low-revenue businesses, devoting more time and energy to accounts generating rapid, repeat revenue that positively impacts the bottom line. As a result, new ecommerce businesses today often receive the “I’ll believe it when I see it” treatment from people who are supposedly there to help them.
For instance, along with small ecommerce startups without SEO or influencer budgets, home party business owners are frequently considered low on the wholesale account hierarchy because many have started their businesses as a side hustle. I have watched many passionate home party business owners step away from their businesses because time commitments for their primary jobs and/or their families eventually outweighed their entrepreneurial aspirations. Abandoning a business doesn’t necessarily indicate that someone is thin-skinned or incapable of executing their goals. Receiving a call from a supportive account rep can make all the difference in the follow-through.
Unfortunately, the dismissive mindset towards small and micro-businesses has entrenched itself in our industry’s culture — “culture” being the unspoken rules that drive certain behaviors. It can manifest during trade shows and/or at various stages of relationships with product suppliers.
For newbies, navigating this culture requires decoding the nuanced language of B2B adult retail. However, this is no quick or easy process. This industry is tightknit, but it can also be tight-lipped when it comes to the ins and outs of industry etiquette, best practices and business relationship dynamics. Unfortunately, those who enter adult retail don’t have a handbook to guide them. Many of us learn through first-hand experience, by observing colleagues, befriending an industry veteran or through the classic gossip grapevine. Still, there are times we all want to press “fast forward” during different stages of the learning curve.
I don’t claim to have all the answers — unless the topic is cats — but I have found the tips below to be helpful for my wholesale accounts and my personal experiences while serving as a wholesale account manager. Decoding some of the subtler cues should help new retailers save time with sales reps, alleviate common frustrations on both sides and/or enhance long-term business success for all parties.
Suggestions and insights for new adult retailers:
For those establishing their first business, it is perfectly fine if you’re doing everything at once to get up and running, including acquiring a wholesale account. However, do your best to come with a tax EIN number in hand and/or a resale permit. Tax EIN numbers are free to obtain online. Also, depending on your region, some states do not require a business license.
Be as detailed as you can in your wholesale application. Aside from your EIN, a website domain and at least one business social media channel indicate that you are making active progress. Some vendors prioritize applicants with EIN numbers, a website domain and/or a physical store location, for example.
Identify your target audience. Develop a profile for your target customers to learn their motivations and their pain points. Identifying a core ecommerce audience will be helpful for navigating the product curation process, leverage your business in a very crowded market and serve as an anchor for your long-term business vision. For new brick-andmortar owners who will carry a little bit of everything, organize your store product sections so that you’re equipped with a roadmap by the time your account is set up, if you haven’t done that yet.
Learn the ABCs of Minimum Advertised Price policy and how it supports retailers and a brand’s integrity. Determine if you want to sell non-MAP products. For both physical and digital retailers, non-MAP products can quickly devolve into a race to the bottom with customers looking for the lowest price. This can affect your margins. Always — and I cannot state this enough — mind the MAP if it is required by a brand. Undercutting is typically perceived as a distasteful practice. Authorized sales are sometimes extended to retailers by a manufacturer during a holiday or for a limited time. Violating MAP can get your wholesale account revoked by a supplier.
Once your account is established, commit to meeting your rep halfway. Let them know your preferred method and frequency of communication. Be respectful of and efficient with their time. If you are looking for product suggestions, try to avoid broad inquiries like “What products should I carry?” This is why knowing your audience is helpful for your success and to ensure your sales rep can deliver the best guidance for you.
Suggestions and insights for new adult retailers selecting a wholesale supplier:
Apply for a wholesale account with multiple distributors. Having options is a good thing, especially for drop ship ecommerce models. The amount of time it takes to process your application and establish a point of contact can set the tone for the long-term business relationship. First impressions are often telling of how invested a vendor is in small business support. Two weeks or less is a reasonable amount of time to receive a response on your application or to hear from your sales rep.
Attend a trade show. Notice reactions when someone reads the criteria on your badge. Take note of those who acknowledge you, value your business, and ask questions about your story. Spend five minutes in the booth. You’ll know what I mean.
Ask what each vendor’s drop ship fees are. These are separate from actual shipping costs. A drop ship fee of $2-2.50 is average but some may make exceptions and reduce the rate for consistent high volume accounts. Great! Note that both distributors and manufacturers may implement wholesale order minimums.
Create a test drop ship order and a test bulk wholesale order. How long are their processing times? Most distributors process and ship drop ship orders within one or two business days. Note that a quick turnaround won’t always happen on a Monday when they are catching up from weekend orders. On average, a large stock wholesale order should take no longer than three to four business days to leave the warehouse — though this does not apply during major holiday seasons. Some will say that anything over two days is too long.
Take note of wholesale prices across multiple distributors and vendors. One may list the wholesale price of a product at $10 while another may list the same item at $8. So when you receive a “20% discount” on the $10 price, it’s not a “discount.” It’s a padded price that becomes equivalent to the standard wholesale price once it has been “discounted.” Regarding distributor dynamics, each wholesale supplier operates differently. While individual reputations for service and efficiency are more or less the same year after year, there are times when things shift for better or worse depending on how staff and management evolve over time.
Qualifying or denying B2B account leads shouldn’t be centered solely around the immediate needs of a distributor’s or manufacturer’s business, yet that is what it is often reduced to. It would behoove vendors to leverage targeted small business support to help new micro-businesses, most of which are traditionally under-served.
Regardless of former business failure rates, there is no justification for the inferior treatment and discrimination that many micro-business owners have experienced before they get their businesses to a profitable point.
This is not to say that wholesale suppliers operate with zero integrity. Sales reps are typically the hardest working people in the business. Sales rep life means there is virtually no such thing as being fully caught up before today ends and tomorrow begins. They deserve grace because they are often overloaded with balancing so many priorities that there is no time to communicate with new businesses, as much as they may intend to. Between servicing existing accounts and putting out figurative fires on a day-to-day basis, it can be near impossible to think about anything beyond the current moment. A normal day in the life as a sales rep is demanding, to say the least — and now that travel is starting to pick up again, communication is even more difficult for the road warriors.
The word “inclusive” is a hot buzzword in this industry when it comes to consumer marketing. Let’s not leave it out of our vocabulary when we are referring to new retailers and small manufacturers who are putting in the work. Despite time limitations, there are different ways to validate new business owners who are braving the industry alone:
At shows, big spenders get a lot of love with invites to private suite parties, dinners and events. Small biz owners who made the expensive trek to attend a trade show with the hopes of buying products deserve to shoot golf balls out of cannons and race go-karts in space, too. Calling all sponsors! Time to host a small business mixer for newbies. If someone is invested in attending a show, they are likely invested in the short- and long-term growth of their business. Small spenders today could evolve into key accounts in the future. A memorable experience can determine whom they choose to order from. Dollars aside, how about that “inclusivity”?
Spend time with people you don’t know during lunches and networking events. Befriend unfamiliar faces who may exhibit timid body language while occupying a table. Break the clique tradition. And try to avoid the cringey “badge glance.” It’s time to drop that like phthalates. It is a hefty ask for reps to balance serving existing accounts while also going deep into helping new micro-businesses. Perhaps it’s time to explore the idea of employing at least one B2B sales rep who provides specialized, tailored service for new and/or small adult retail businesses.
“There is no way that will ever be profitable for a distributor or product supplier,” some may think. Yet between more access to small business capital, accessible resources for entrepreneurs, consumer demand for more sexual wellness products, the Great Resignation of 2021 and post-pandemic resiliency, we will likely see more people take the leap into entrepreneurship. Adult retail is no exception, and establishing profitable relationships with those new entrepreneurs will be important.
Changing the culture of any organization or industry must trickle down from the top. That applies to management and mindset. For now, the best place to start may be simply shifting perspective from “When will their business die?” to “When will their business take off and thrive — and how can we help make that happen?”
Industry Etiquette Tips for Adult Retail Newbies by Casey Murphy originally appeared in XBIZ