13 Oct
Table of content
Introduction
Firstly, to start a Wholesale Business is overwhelming. Seeking guidance throughout the process is recommended to almost everyone who wants to start a wholesale business and perform well.
Adding to that, a fundamental understanding of the supply chain is necessary to be in the wholesale business. You also need to know how to network or negotiate.
Therefore, starting and running a wholesale business is full of ups and downs and you face countless problems each day. Although, with the help of correct resources and guidance you can overcome each one of those problems.
Let’s go through this guide to start a wholesale business in 2023.
How to start a Wholesale Business
1. Choosing a profitable Product to start a wholesale business
Choosing a product is the first step to start your wholesale business. Ideas for wholesale business products include; Textile, Agrochemical, Grains and Seeds, Organic Food products, Jewelry, wholesale business for medicine, etc.
If you are confused which product to choose, check this list of 30 most profitable wholesale business ideas suggested by List Trader.
Moreover, dealing with a product that you have prior knowledge or experience with is highly recommended. It should also have good demand in the market in order to earn the expected profit.
Furthermore, researching about the product and its demand is necessary. You can do online research about the product.
Next, you can check the ratings and reviews on ecommerce websites such as Amazon, Flipkart and Alibaba. This will allow you to see what customers are buying and what they are saying about the products that you’ve chosen to sell.
2. Register your Wholesale Business
On the other hand, registering your wholesale business and having all the necessary documents to operate it is a vital step. You shouldn’t move forward with any other process unless you have your business registered.
Moreover, there are many types of business and also many ways to register for one. Registration processes’ are different for different countries and even states.
Also, there are many benefits of registering your business. It gives a legal face to your business by letting you have all the necessary documents, letting you pay the taxes and also permit you to claim tax credit input.
Most importantly, governments of most countries across the globe present various beneficial schemes and plans for the businesses’ registered in their region to thrive.
3. Make a Plan and allocate Funds to your wholesale business
Jotting down a wholesale business plan comes next.
A plan should be thoroughly revised and should include backup plans too. Start by doing a SWOT analysis product, business and market followed by a PESTLE analysis. This kind of analysis will give you a different perspective about your business and let you have information to form a plan. Making a mind map or a flow chart for everything will also help you get clarity.
Your plan will include various elements such as product details, pricing, competitor analysis, business policies, etc.
Remember. A perfect plan is the one that keeps changing and aligning with the circumstances in order to make profit.
The plan will roughly indicate how much funding you would need to kickstart and sustain the business for an expected period of time. You can raise funding by pitching your wholesale product and business model to creditors.
Today, banks too have various schemes for businesses and start-ups. Banks offer loans for business to use as capital. Manage and use these funds wisely for operations, warehousing, purchases and marketing needs.
4. Identify the Market & your wholesale Target Audience
You will need to research the market intensively. Also you will need to study the target customers.
Making a customer persona for your ideal customers would be a great start. This will help you align your marketing efforts and pitch to your ideal customers.
Find retailers, other wholesalers and individuals who would purchase the products from you.
Focus on building a brand. This will help you gain a competitive advantage in the marketplace.
5. Get a suitable office and warehouse location
A wholesale business is synonymous to having a bulk of a variety of physical goods. These goods need a storage place.
A warehouse becomes mandatory as you cannot keep these bulk of goods at your home or office.
You also need an office space where you will be planning your business. Getting more space can be costly, hence you can have your office at your warehouse itself.
This would save you a lot of money.
6. Make deals with suppliers and set strict payment policies
Contact manufacturers who are willing to have you as a wholesaler for their products. You will have to meet the sales targets for many manufacturers.
Hence, you need to think carefully before making a decision.
Contact a company’s distributors if the company is not willing to directly appoint you as its wholesaler. In this case, distributors will sell these goods to you for a slightly higher price because their margin will be involved. Hence, there will be a division in profit margins and you need to expect a slightly lower profit margin for yourself in this case.
Have strict control over your finances that no one else can overrule. Have control over your dealers as the transactions involved could be huge in wholesale compared to retail.
Do proper research on the supplier, and keep requesting good deals from your suppliers to stay ahead in the game.
7. Set up your website and other ecommerce platforms
Make a website and be present on various ecommerce platforms and social media, mainly B2B platforms like LinkedIn.
Setting up a website has become very easy using CMS tools like WordPress and Wix, and on hosts like Hostinger or Godaddy.
Through a website you can:
- Showcase your products.
- Contact suppliers to tell them that you want to do business with them.
- Quote a buying price for suppliers and selling price for retailers on a website.
- Have credibility by showcasing your products and experience.
- Take your buyers through a seamless customer experience.
- You can mention product information such as minimum purchase quantity.
- Offer “Add to Cart” and “Checkout”. You can integrate delivery services after checkout.
- Let suppliers and retailers contact you directly.
- Use digital marketing tools to reach out to more retailers.
8. Create and understand your policies
Refer and understand the policies of various suppliers, wholesalers and retailers. This will help you create your own policies and check for loop holes in others policies that you can potentially cover in yours.
Policies include return policies, shipping policies, privacy policies required for websites, etc. Also check their post-sales service and support policies.
Deal only with suppliers, the policies of whom you understand and comply with or you could end up with an unnecessary inventory that you cannot sell.
Remember. Idle Inventory is a waste of money.
9. Get Bidding & List Exchange Software
There are a variety of software that will help your business in different aspects such as inventory management, List Exchange and Price Bidding, etc.
List Trader one of the best Bidding and List exchange platform is a streamlined SaaS software where you will get everything you need to run a profitable wholesale business on your finger tips.
List Trader has every feature on one single dashboard. It has a central repository of lists provided by manufacturer, suppliers and retailers and an AI system that lets you match with the perfect supplier and retailer that fits your needs.
Also, view analytics related to your business and ship your orders in one click.
Thousands of businesses generate millions of dollars on List Trader every month.
10. Hire a productive team
You will need a productive and efficient staff to do daily activities. The staff should also be trustworthy to ensure that your inventory doesn’t get lost, misplaced or pilfered.
Spend sufficient amounts on operations, managing finances, cash flow and marketing. Contact a reputed and affordable HR service who will help you hire the right people.
11. Focus and spend appropriate funds on B2B marketing
The wholesaling business model is primarily a B2B business model. This means you are a business selling goods or services to another business.
Therefore you need to primarily focus on B2B platform marketing such as LinkedIn marketing.
B2B marketing can also be done on other platforms such as Google Ads, Facebook Ads and Instagram Promotions through the “Detailed Targeting” process. This will bring results but not as much as B2B marketing platforms.
Also, reaching out to retailers on social media and their personal websites has gotten easy now.
12. Set up your transit process to start a wholesale business
Because you will be dealing with wholesale goods, the amount of goods that you will be transiting to your customers would be in bulk.
Hence it is suggested to try to find a transit partner who is ready to settle for prices less than what online delivery partners are charging.
If not, then there are a lot of third party integrations that allow you to transit goods in bulk. These online partners may charge more but offer delivery options, credibility and optional insurance.
Transit process could be different for local delivery, inter-state delivery and international delivery and the charges may vary depending on which course you choose.
Packaging is another important process. Packing goods in bulk to deliver them safely is a difficult task. Some goods are already packed by the manufacturer with their brand names on it and some goods are sold loose. A primary packaging (or shelter) is required for any kind of good to keep it safe from damage in the warehouse.
Conclusion
These fundamental steps cover necessary steps to start your wholesale business. You may need to alter these steps a bit to align them to your business and your way of doing business.
All these steps are important and can be perceived and practiced in much more detail as required by you.
The above mentioned steps will prove to be effective and ensure that your wholesale business gets a good kick start and starts generating profit soon.
FAQs (Frequently Asked Questions)
Q1. Is it profitable to start a wholesale business?
Ans. Yes. Wholesale business is highly profitable, if you choose a wholesale product that is always in demand by the target consumers. There should also be a lot of easy-to-approach target customers in the market.
Q2. If I start a wholesale business, how much profit will it make?
Ans. The profit for any wholesale business depends on a variety of factors. One of the main factors is the demand of the product in the market. The easiest way to find out about the demand in the market is by doing basic online research about the product and the market.
Q3. Which type of wholesale business is best?
Ans. There are a lot of successful products in the market that are perfect to start with. For instance: Textile, agrochemical, organic food, etc.
List Trader presents a list of 30 most profitable wholesale businesses to start in 2023.
Q4. What is a Wholesale Business Franchise?
Ans. A wholesale business franchise is a business where independent wholesalers can receive the rights to a bigger wholesale brand’s business name, logo, network, credibility and support to operate at a single location/warehouse.
A franchiser is the owner of the bigger wholesale company who has the right to sell the franchise license and rights to the one demanding the franchise.
A franchise can be operated by an individual or a group known as the franchisee. These are known as the third party owners and the operator of the wholesale business location or warehouse.
Recent Posts
- Digital Export Trends for 2023January 9, 2023
- How to Improve Supply Chain communication?January 9, 2023
Order Management vs Order FulfillmentDecember 28, 2022- Importance of Supply Chain ManagementDecember 28, 2022
- Vendor Onboarding ChecklistDecember 28, 2022
