How to Start a Wholesale Business
Starting a wholesale business may be daunting at first but if you have sufficient knowledge of the industry then everything will come easy. Read this article and discover some of the things you should know about before you start your own wholesale business.
Wholesaling in a nutshell is the business of supplying merchandise to retailers and distributors who in turn sell said merchandise to their customers.
A wholesaler therefore acts as a bridge between the manufacturer and the retailer. The wholesale distribution industry isn’t known to many because the public is more familiar with the retailers and their sales channels (convenience stores, boutiques, supermarkets, bookstores etc). Some say that the retail industry is a veritable Warfield. If this is so, then retail shops and boutiques can be likened to foot soldiers and wholesalers as the logistics arm that provides their artillery.
- If you are interested in starting your own wholesale distribution business, here is a step-by-step guide may help you
- Select the type of goods that you want to pass on to distributors and retailers. The foolproof way is to choose a product that you are already familiar with. If you are fond of clothes, then choose clothes. If you are a voracious reader then sell wholesale books etcetera. This way, your expertise on the field will not go to waste. Also, do have the business smarts to see to it that you test the sample product first before you purchase them in bulk.
Most likely, you will be dealing with foreign suppliers and communication may be a problem. Make sure that you have all the details clarified before you enter into an arrangement. Make sure that you have everything in paper. Don’t skimp on legal fees. Have a lawyer look into your contract to guarantee that everything is in order. A contract is there for a reason and that is to protect your interest.
- Get your business some warehouse space. Naturally, you will need a place to store your merchandise. In choosing a warehouse facility, make sure the area is secure and will satisfy your storage needs. Get a place that is cost effective. Compute for the warehouse cost in terms of square footage.
- You need to get a clear picture of your product flow. Develop a system that will enable you to track the progress of your merchandise from the manufacturer all the way down to the retailers. An effective way to accomplish this is by creating a number system for your products. Make sure you conduct periodic inventory checks.
- Develop a system of storing your products the quickest way and with the least amount of damage. Ideally, fast moving products must be placed near the front of the warehouse for easy access while products that are only in demand seasonally should be placed near the back.
- The key to succeeding in this industry is by developing a strong and solid distribution channel or network. Establish yourself as a competitive customer by offering your retailers something that they don’t get from your peers in the trade. For example, easy payment terms or higher credit limit and so on.
The business of wholesaling is a very lucrative business and there is always room for one more in the industry. To be successful in this business, or in any business for that matter, you need to gather as much information about the industry as you can. Remember, knowledge is the key to success. Trite but true.
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