If you are an ambitious person looking to start a company and make good profits, testing out the waters in wholesale can be very lucrative.
Having a wholesale business is a decent option when it comes to entrepreneurship because you don’t need to deal with retail sales or retail customers. As a wholesaler, you provide products to other businesses for a profit.
However, it can get overwhelming to think of everything that goes into how to start a wholesale business. To make this initial process easier, take a look below.
Identify the Market
It is absolutely necessary to do thorough research to identify the ideal market for your products.
As a wholesale business owner, you need to find dealers, store owners, and other customers that are able to procure the products from your business.
You will see that as you start creating your brand, you will also need to check out the rivals. Bear in mind that the competition will be fierce and numerous.
Do everything you can to learn as much as possible about them. Figure out the products they carry, the prices, and the quality of services they provide.
If you have a desire to tackle multiple (broader) markets, it’s wise to have your business appear on an international and well-known wholesale marketplace.
There’s no doubt that the interested customers will find you there in your respective niche.
However, you should make this move only when you successfully identify your target market and audience.
Build a Website
If you are strongly considering running a wholesale company, you’ll need to build a good website for your business.
Fortunately, this has become very easy these days thanks to numerous tools that allow users to create websites even if they don’t have the necessary web development (technical) knowledge.
There are AI-based tools, do-it-yourself tools, and some popular platforms that offer drag-and-drop website building.
Once you’re done with the website, you’ll be able to inform other companies that you are willing to do business with them.
With a website, you allow other people to contact you. You won’t have to chase after them.
Your website will also garner attention from people who might be willing to sell your products.
You can also look for good eCommerce platforms where you will get to tap into already-established audiences that might need what you have to offer.
There are numerous platforms of this kind, you simply need to conduct research to find the one that is a good fit for you.
Acquire a Wholesale License and Other Permits
Keep in mind that you can’t start your business and its operations without the right permits. That is why you first need to acquire all the necessary licenses and permits to start operating.
You should know that your state most likely has laws that regulate how a business of your kind can operate.
But you should also check the laws of the regions you plan to ship your products to in the future.
A wholesale license can have different names in different jurisdictions. Some refer to it as a resale license since it allows your business to resell products.
So, make sure to check with your region’s tax authority about the terms and conditions that you need to follow once you acquire a wholesale license.
Check with your state secretary for any other kind of business license or permit that you might need.
Plan out Your Logistics
This is the stage where planning gets serious and specific. It’s simply necessary to figure out the logistics before starting your wholesale business.
This will vary depending on the specifics of your business plan, location, budget, who your customers are, and what you want to provide.
So, figure out the following:
- Choosing manufacturers to do business with – apart from large manufacturers, you can source products from independent small businesses or even import from overseas.
- Renting out warehouse space – as you grow, you will need to take into account how much space you’ll potentially need.
- Choose a shipper – you need an affordable, quick, and reliable company to ship your products.
- Get a lawyer.
- Hire employees.
Set up A Strict Payment Policy with Your Dealers
Having a good policy on payments is a must. It is absolutely necessary to keep strict control over your finances. This also means that you will need to control every payment made to your dealers.
The amount can be very large when compared to the payments made by small retailers. That’s why you need to have a good accountant or use software tools that will allow you to track every transaction and have it in the palm of your hand whenever you need it.
Don’t allow your business to make slip-ups when it comes to finances. This is especially important in the initial stages of your wholesale business journey.
Once you’re done with these steps, you need to look for new and more lucrative ways you can enhance your business operations.
Don’t be complacent with your business goals. This will only make it easier for a rival to come in and get ahead of you quickly.