Wholesale Distributor: How To Start A Wholesaling Business

Posted by Nick Niesen on October 28th, 2010

Most people want to own a great money making business where other people will do all the work selling his or her products. He or she will just wait for the money to come in and the only thing he or she will do is distribute the goods that other people will sell.

However, not many people know how to start such a business. There are many opportunities like this that many people pass up because they don?t understand how it works or think that it is very expensive.

This business is simply about you supplying goods to other people who will sell them. Wholesalers acts as intermediaries between manufacturers and retailers.

This is called wholesaling.

Wholesaling is a very profitable business, provided that you have a large dealer network behind you.

To start a wholesaling business you should first consider a few things to make your business work. Here are some of the things that you should consider before entering the world of wholesale business:

? Think of a product that most people use. One good product to sell is clothes. Clothes are always in demand. It is a great product to sell because it doesn?t need much maintenance. Also, people always buy clothes. Another example would be coffee, coffee also doesn?t need much maintenance and people always buy it. The key to choosing a product is that you pick one that is always in demand.

? When you are just new to this business it is wise that you should first find dealers that are near to you. This will save you a lot of money on shipping, and other problems such as complete supplier failure.

? Talk to someone you know that have entered wholesale business. He or she can give you pointers that can save you time and money and also know what mistakes they made to avoid making it yourself.

? When looking for a dealer or distributor, make sure that they have legal documents that permit them to resell your products. This can ensure your business?s security.

? You should also rent or buy a warehouse to store all your products. Choose a warehouse that is easily accessible and one that has labor saving approaches to material handling.

? You should establish a competitive credit policy. Most dealers cannot pay you the instant you deliver your products to them. You should offer favorable terms of payment and perhaps a higher credit limit. This offer can be attractive for dealers.

These are just some of the factors that you should consider before starting your wholesale business. There are also strategies that you should apply in order to have a competitive edge against your competitors.

Here are some of the strategies that you should consider:

? Improve all aspects of wholesaling activity. In time, when your business grows you should improve the four major areas of wholesaling, these are; purchasing, warehouse operation sales, and management. In short, in order to improve your wholesale operation you should buy better, sell better and improve operations.

? Buy products in large quantities and repack them in smaller package. This strategy can add convenience and efficiency of your distribution to dealers.

? Always keep in contact with your dealers personally. This strategy will enable you to keep your dealers from abandoning you and find another wholesaler. This is because people like to talk to the boss himself when they have a problem. Do not just leave them voice mails in order to contact you. Visit them from time to time to know how their business is going.

Remember, wholesaling can give you a lot of profit, but it can also mean hard work and dedication to be successful!