The manufacturer makes the goods, and retailers sell those goods to consumers. In between is a critical link in the supply chain: the wholesaler. That’s the business that helps get those goods to retailers at reasonable prices.
Without wholesale businesses, manufacturers can be cut off from consumers. Many retailers wouldn’t be able to turn a profit if forced to buy large quantities of products. Consumers wouldn’t have access to what they want and need, either online or in brick-and-mortar stores.
The number of products being manufactured keeps growing as consumers demand new stuff on the opposite end. There is corresponding growth in the wholesale sector, rife with opportunity for thirsty entrepreneurs. If you are one of them, you will want to get off to a good start.
Unless you have worked in wholesale before, you’re about to embark on a unique professional journey. Here are three tips to getting started in the world of wholesale business.
1. Identify a Lucrative Niche
Being successful in the wholesale business requires researching consumer trends and identifying a niche with profit potential. It’s impossible to be everything to everyone, so define your business boundaries.
Finding your niche may require research regarding consumer trends. Whatever products you distribute, you will need to forecast their potential for future growth.
As you begin narrowing your product line choices, look for niches within them that will appeal to a wide variety of retailers. For example, there’s a virtually infinite number of products you could sell in women’s wholesale apparel as a brand. So how can you categorize products to appeal to the specific wishes of potential retailers?
Try building a line around a specific value, like products made in the USA, eco-friendly goods, or products not sold on Amazon. The products you choose may encompass one vast niche. Creating niches within your niche may check the box for retailers and set you apart.
Finally, choose products that interest you. After all, you will have to become an expert about them to pitch them successfully to retailers. Product demand comes and goes, so make your niche yours and strive to be the best wholesaler in it.
2. Choose an Entrance Strategy
There’s more than one way to enter the wholesale business sector. Consider which one is best for you financially, creatively, and from a control standpoint.
You can launch your own on your own, building your business from the ground up. If you want to flex your creativity and be in complete control of your destiny, this is the best option. It’s the one that will take most time and work, but it will be completely your creation.
You could seek out existing wholesale businesses looking for new ownership. Much of the groundwork will have been laid, although you will be free to make changes. Just be sure you don’t buy a business with a poor reputation that will persistently haunt your new ownership.
A third option is buying into a wholesale business opportunity, which likely makes you more investor than day-to-day operator. You’ll need to consider the risks of taking an equity stake in someone else’s venture. You won’t have the control inherent in the other two options.
Any of these strategies will get you into the wholesale business. Their differences lie in the business muscles you get to flex in a startup, takeover, or investment. Explore your options and choose wisely.
3. Develop a Head for Business
It’s possible there are ventures you can enter successfully without much initial business savvy. The wholesale business sector, however, is not likely to be one of them. To flourish there, you must have a head for business.
You need at least a working knowledge of accounting, marketing, shipping and receiving, distribution, manufacturing, retail operations, and customer service. Of course, you can hire people with this experience if you have the money. But odds are, you’re going to have to handle multiple roles while you’re building your company.
If you’re starting a wholesale business from scratch, you’ll need to develop a detailed business plan. For sure you’ll require one if you’ll be applying for a loan or pitching investors to get up and running. But even if you already have your startup capital, a plan forces you to think through your business strategy.
If you lack a grasp of the business concepts you need to be at least familiar with, educate yourself. Take a basic accounting class at the local community college. Sign up for online courses and read books about successful wholesale business strategies.
Whether you’re creating a new wholesale business or making an established one yours, don’t jump in without being fully prepared. You must learn how to swim, or else you’ll sink.
The wholesale business sector is the barometer of consumer demand and emerging market trends. This link in the supply chain forces manufacturers to produce better products and drives what retailers put on their shelves. It’s a lucrative and exciting place to be for intrepid entrepreneurs.
If wholesale is the business you want to get into, don’t dawdle, but don’t rush things either. Take the time to find your niche, explore business models, and develop a smart business plan. Then take the first step on what can be an exciting, fulfilling, and lucrative entrepreneurial journey.