If you have specialist knowledge in a particular area, then use this to your advantage. If you have experience of working in a particular industry this could be a significant advantage. A large part of what makes a good wholesaler is good salesmanship. If you believe in the products you are selling you are more likely to be a convincing seller.
Speciality wholesalers may have numerous suppliers and buyers, but will specialise in a particular industry or product line. Specific product wholesalers only buy and sell one particular product, for example, shoes. Discount wholesalers supply discounted goods, often because they are refurbished, discontinued or returned. Drop ship wholesalers are businesses which buy and sell goods like any other wholesaler, but without actually handling the goods. Instead, they have it dispatched straight from the supplier to the buyer. Online wholesalers are those businesses which are just based online and don’t have a physical store. This can be a cheaper way to run the business, but limits the amount of stock you can handle.
If you have limited funds at the start, consider beginning with a small online business and build up your knowledge and experience at the same time as building up some cash reserves. Once you have more available liquidity you can begin to expand your operations. Do not to try to expand beyond your finances. Going into debt to start a business adds additional risk to the business and should be avoided.
You need to include information on the products you want to buy and sell as well as your strategy for doing so. Include a summary of the finances and how and when you intend to turn a profit. [2] X Research source You can look at some examples of wholesaler business plans online to get you started. [3] X Research source
Don’t forget to develop a presence on social media as well and link up all your different online elements.
Don’t forget to develop a presence on social media as well and link up all your different online elements.
You may need to obtain further licenses and comply to other regulations that are specific to your state. You can look up all the details for your locality online. [6] X Trustworthy Source U. S. Small Business Administration U. S. government agency focused on supporting small businesses Go to source
The four main groups of suppliers are comprised of manufacturers, independent craftspeople, import sources, and distributors. Distributors are often other wholesalers who buy from a variety of sources and sell on for a profit. [7] X Research source Take time to fully research suppliers and understand how they operate, who they already supply to, and in what sort of quantities.
Other factors to consider include the location of the company. If they are a manufacturer based abroad you are adding an extra layer of potential costs with shipping as well as the extra time goods may take to arrive. Extra costs may be negated by lower purchase prices, but be sure to take all of these factors into careful consideration.
Consider focusing on one product at a time and developing specific promotional campaigns for specific product lines. [10] X Research source If you are selling to other businesses, ensure you are involved in good business-to-business (or B2B) networks and portals. There are numerous forums and registries to which you can sign up and increase your presence in business circles. [11] X Research source
If the buyer purchases 100 units of Product A, the cost is $10 per unit. If the buyer purchases 50 units of Product A, the cost is $12 per unit. If the buyer purchases 10 units of Product A, the cost is $15 per unit.
You take the sale and pass it on to the supplier who then ships the products. This can be a way into a market that requires relatively little initial funding. [13] X Research source Although your costs will be lower, so will the margin on each unit. Do plenty of research and contact suppliers about the prices in order to determine the returns you can generate.
Consider a supplier’s reliability, overall cost (not just unit price), and their willingness to develop a strong partnership with you. Also think about whether this supplier is developing their product line and business practices. If they seem slow or out of date, they may be failing to adapt and develop within their industry. [14] X Research source
If you have a long relationship with a supplier you may be able to get a considerable discount on the costs of your order. If you order over a certain amount a discount could kick in and save you money. Speak with a contact at the supplier to be sure you know about all the possibilities to lower your purchase costs. [15] X Research source
