Starting a wholesaling venture alone or with partners can be rewarding and profitable. A wholesaler sells goods or raw materials in bulk to manufacturers, industrial and commercial firms and/or retailers. To be a successful wholesaler requires a good head for figures, a knack for problem solving and good organizational skills. Starting a wholesale venture isn’t really that complicated, but like any business, making it successful requires hard work and commitment. Here’s an overview of what it takes.
First step is to determine what product or material one would like to wholesale. If one has experience in a specific industry, this might be a good area to investigate opportunities. Otherwise doing one’s homework is crucial. Read trade magazines and websites to determine what goods are either currently in demand or have short-term potential. This is where good business sense and intuition is important.
With goods or raw material in mind, next is to determine the supply chain model. Most wholesalers either fulfill orders through a drop ship directly from suppliers to customers, or they warehouse the product and arrange for shipping themselves. Drop shipping is the most efficient and cost-effective because no warehouse space is required. In some cases however, products or materials need to be taken in for inspection, grading, assembly or packaging. This is an important decision as it affects expenses and ultimately profits.
Securing suppliers is a key activity in a wholesaling business. Without reliable, quality suppliers, a wholesalers business cannot be successful. The internet is invaluable in sourcing suppliers, but nothing makes up for personal contact and research. Be sure to investigate any potential supplier carefully and take necessary care to ensure they will make a suitable business partner.
Shipping is one of the larger expenses for a wholesaling business and it pays to negotiate favourable rates. In addition to getting estimates from different shippers, one should also investigate packaging and other drivers of shipping costs. Decrease in expense makes the business more competitive and profitable.
To ensure the widest potential customer base, it is important to develop a website. This provides visibility to a worldwide client base and provides customers a resource for investigating offerings. Investigate competitive websites and wholesalers in related industries for requirements. Much of the content – photos, descriptions, and product demonstrations – can often be sourced from suppliers. Also, be sure to the site is designed for good search engine placement as this is a business necessity for wholesalers.